Dive Brief:

• Dos Toros, the trendy burrito chain with locations in New York City and Chicago, is trying its hand at online retail, according to Digiday. The restaurant will sell three bottled hot sauces,  packaged with the help of a five-person marketing team, through their website and in-stores for $8 per bottle.

• The company will use e-commerce and POS system Shopify to also offer gift packs of the Smokey, Verde and Habanero sauces — called “hot boxes” — for $24. 

• Co-owner Leo Kremer hopes online sales, with their low barrier to entry, will boost brand awareness against bigger competitors in the Mexican quick-service segment. “We can learn about how much demand there is and where it’s coming from geographically, then focus on retail partners in those markets where our hot sauce is most popular,” he told Digiday.

Dive Insight:

From the get-go, Dos Toros has promoted its made-in-house ingredients, especially guacamole, and people-first ethos. Homemade hot sauce has already set them apart, but bringing these products online could give it a new path to growth. 

As chains big and small jostle for presence on high-traffic delivery platforms, digital retail can also provide another way to connect with customers outside the restaurant. Making its website an ordering touchpoint allows the company easily test the e-commerce waters, as Kremer tells Digiday, and avoid the complex web of grocery distribution.

In brick-and-mortar retail, successful forays into CPG tend to come from more established restaurant brands like Starbucks, or those with existing industry ties that can easily navigate distribution and placement. Partnering with companies ingrained in grocery can make that easier. Auntie Anne’s and Cinnabon sell baking kits in stores, and the latter also sells co-branded Keurig cups. Taco Bell makes taco kits with Kraft, and in October launched hot-sauce flavored chips at select 7-Eleven locations.

Those big-name relationships might be impossible to snag for a small company like Dos Toros. But on their own website, the company can control the flow of information, supply and shipping, all while remaining the only point-of-contact for the customer.

If done right, online retail could be a straightforward, low-risk way for Dos Toros to stand out in a crowded marketplace, where giants Chipotle and Taco Bell reign supreme and chains like Del Taco and Moe’s Southwest Grill continue to grow. Since opening its first store in 2009, Dos Toros has expanded to 19 stores in two cities, with plans to infiltrate Washington, Boston and Houston. As a private company, the brothers won’t disclose precise sales figures, but per the Wall Street Journal sales jumped 50% in 2016 to $30 million.