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McKinsey Hard Distribution Strategy Implementation Business Model

Distribution strategy

#Fast food chain #Food & Beverage #Fast-Casual Restaurant #Retail
ProHub Comment

This is a comprehensive implementation case requiring candidates to develop a multi-channel distribution strategy for a loss-making fast-casual chain. The case tests strategic thinking, financial analysis, and operational understanding across four distinct distribution channels (own stores, proprietary app, third-party delivery, and retail partnerships). The math exercise reveals the cannibalization dynamics and profitability impact of each channel.

Estimated Time 15 minutes
Difficulty Hard
Source PeterK
50 / 100
A popular fast-casual salad chain Fresh Bites has gained a loyal following for its healthy and customizable salads. The chain has been rapidly expanding and today exceeds 90 restaurants across the U.S. Fresh Bites generates $240M in revenue but is currently losing money with $100M in net losses (2022). The company’s CEO has engaged your team to help them upgrade their distribution strategy in order to propel their sales, increase economies of scale, and thus improve their economics. How would you help the client improve their distribution given such a fierce competition in the healthy fast-casual restaurant industry?

Clarifying Information

  1. Fresh Bites sells mostly through their retail stores, but doesn’t franchise
  2. The vast majority of fast-food and fast-casual restaurant chains added and/or boosted a delivery option to support their sales during the pandemic
  3. Digital channels (e.g. app, site, delivery apps) gain traction. For example, they generated 52% of Starbuck’s (2021) and 62% of sweetgreen’s (2022) U.S. sales
  4. Fresh Bites doesn’t consider vending machines as an option due to the short shelf-life of their offerings
  5. Panera Bread, Starbucks, Krispy Kreme, Taco Bell and other restaurant chains sell their products through grocery stores like Walmart, Wholefoods, and Target