How furniture giant Ikea is driving unexpected growth by ramping up its food division.
A year after the first Ikea store opened in Sweden in 1958, founder Ingvar Kamprad installed an amenity that would be recognizable to current-day shoppers worldwide, from Tempe, Arizona, to Wuxi, China: a sit-down restaurant with a small menu featuring wholesome Scandinavian staples. And for the next 50-plus years, Ikea management continued to think about its food operation pretty much the same way Kamprad did. “We’ve always called the meatballs ‘the best sofa-seller,’ ” says Gerd Diewald, who runs Ikea’s food operations in the U.S. “Because it’s hard to do business with hungry customers. When you feed them, they stay longer, they can talk about their [potential] purchases, and they make a decision without leaving the store. That was the thinking right at the beginning.”
But sometimes a company can find its next growth engine in surprising places, if it just looks at its business creatively enough. Over the past several years, Ikea’s food division—which also includes the Swedish Food Market (where you can buy everything from jars of herring to make-at-home versions of the restaurant menu)—has proved to be much more than just a tool to move more Vittsjö TV stands. By focusing on this formerly unloved division, and locking into prevailing trends around ethically sourced ingredients and healthier options, Ikea has turned food into one of its fastest-growing segments. The company is now considering the next phase of this unexpected revenue generator, and it might even expand into stand-alone cafés in city centers.
This story is from the May 2017 edition of Fast Company.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the May 2017 edition of Fast Company.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Where the Clean Energy Jobs Are
A data-driven guide to the skills you need and the opportunities you'll find
CAN WWE PIN THE WORLD?
AS IT MAKES ITS $5 BILLION NETFLIX DEBUT AND PREPARES FOR A GLOBAL AUDIENCE, WWE IS STILL WRESTLING WITH THE TOXIC LEGACY OF ITS COMPLICATED FOUNDER.
RADICAL VISION
POLICE DEPARTMENTS ACROSS THE COUNTRY ARE EMBRACING AI-ENHANCED SURVEILLANCE IN THE NAME OF STOPPING CRIME. HERE'S HOW ONE SECURITY FIRM IS LEADING THE EFFORT AND PROFITING OFF OUR FEARS
Brands That Matter
Our annual look at standout brands encompasses 130 honorees in nine categories, including the inaugural CMOs of the Year. Here's how 12 of those brands and three top CMOs stake out the intersection of business and culture.
The Future According to Google
Google DeepMind, the tech giant's internal AI research lab, isn't just racing to beat OpenAI to market. Under Nobel laureate CEO Demis Hassabis, it's the \"engine room\" of the entire company.
EYE OF THE BEHOLDER
SEPHORA HAS GROWN SO POWERFUL THAT IT CONTROLS WHICH BRANDS LIVE OR DIE IN THE $30 BILLION HIGH-END COSMETICS INDUSTRY. IN THIS BEAUTY CONTEST, SEPHORA ALWAYS WEARS THE CROWN.
CULTURE WARS
Brands on the Run Why Harley-Davidson, Caterpillar, and other masculine\" brands are caving to anti-DEI crusader Robby Starbuck
WORK LIFE
Law Roach, image architect and educator, answers our career questionnaire.
The AI Gadget Debacle
Here's why you shouldn't expect any mind-blowing AI-powered gifts anytime soon.
Why the future workplace will feel more like a hotel
REVEALS WHY THIS IS IMPORTANT TO CORPORATE STRATEGY AND EMPLOYEE ENGAGEMENT