Making Money with Meal Kits Partnerships

Regular readers of this blog know that Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions® called 2018 the year of foodservice partnerships. He also believes that there is plenty of room for growth in the meal kit sector moving forward given the proper partnerships.

Recently the CEO of Marley Spoon told Reuters he expects the Berlin based meal kit company to be profitable by the end of next year. Fabian Siegel said the company hopes to raise about $53 million when its stock starts trading July 2 on the Australian Securities Exchange.

Today Australia represents approximately 37% of Marley Spoon's revenue, according to TechCrunch, with the U.S. and Europe slightly behind that level. Siegel told TechCrunch the company has broken even in Australia and expects to hit profitability there in the second half of this year.

Marley Spoon is quite optimistic about its prospects through the upcoming IPO. It's been focused on innovations, including a Thanksgiving dinner partnership with Martha Stewart.  Regular readers of this blog know the team at Foodservice Solutions® was first to call this partnerships a success  Martha & Marley Spoon and Dinnerly, is a less-expensive meal kit option with fewer ingredients a set of differentiation points that are still relevant..

Partnerships are the new electricity driving retail foodservice success today according to Johnson. According to Johnson, “Brand relevance is in part driven with innovation in new food products in combination with new avenues of distribution all of which are the platform for the new electricity.”

Johnson stated “that in my minds-eye the new electricity must be very efficient for the supply and includes such things as fresh foods, grocerant consultants, urban farming (produce, seafood, etc.), autonomous delivery, voice and visceral mobile ordering, Geo-based hand held marketing. This program has all of that.

Foodservice retailers to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing fresh food that is portable, fresh, with differentiation that is familiar not different.  That will require brands to embrace new fresh food partnerships more now than ever before according to Johnson. Let’s look at the meal kit sector as an example.

Blue Apron and Costco, have formed a partnership and both teamed with Airbnb, pop-ups and various advertising channels  to acquire and retain customers and boost its bottom line.  HelloFresh recently acquired Green Chef, an organic meal-kit company, and placed meal kits inside then formed a partnership with 600 Ahold Delhaize stores, to drive sales.

A 2017 Packaged Facts report noted the meal-kit market had hit $5 billion in sales, and Food Business News reported it could achieve $35 billion by 2025, so there's a lot to gain if retention, marketing and delivery problems can be overcome.

The team at Foodservice Solutions® believes that partnerships specifically non-traditional partnerships will drive incremental growth within all sectors of retail foodservice.  What is your new electricity? Do you need Outside-Eye’s to drive inside sales?

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit www.Facebook.com/StevenJohnson www.Linkedin.com/in/grocerant/  or www.twitter.com/grocerant

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McDonald’s Marketing Consumer Interactive & Participatory Relevance

Success does leave clues and McDonalds has left clues for many chains to follow.  Once again McDonald’s is doing all the right things with its marketing initiatives as it created 'Frylus' to Help Guests Take Selfies according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.   

Selfies continue to drive customer buy-in, elevate social media mentions, and garner customer relevance according to Johnson.  McDonald’s say’s “The Fylus will keep your phone clean when you take a selfie.”  This is straight forward authentic messaging.

Last year we saw the Frork. Now, it’s The Frylus. In honor of National Selfie Day, as McDonald’s unveiled yet another fry-themed concoction to garner a bit of hummer and drive sales. Frylus is meant to celebrate the chain’s new 100 percent fresh beef Quarter Pounders, as well as the upcoming national event, 100,000 Frylus contraptions (plus phone stand), meant to keep your phone clean while eating, are being given away at 2,000-plus stores on June 21 with the purchase of a Quarter Pounder.  Do you want to see where you can get a Frylus well just click here.  McDonald’s collaborated with Instagram celebrity Kirby Jenner on the promotion.

Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Fast Food Restaurants Need Two Tier Pricing, Products, for Possibilities

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® stated “Fast Food restaurants are still aspirational for many consumers around the globe.  Political upheaval continues to linger with employment instability is increasing the mind-set of consumers in most developed countries.” 

Today, many fast food branded restaurants are leveraging Two Tier Pricing to first garner trial and secondly build brand loyalty.  They offer entry level branded products like McDonalds dollar menu that allow existing customers trial and existing customers trade up either with LTO’s or specials on branded menu items.

Recently the Euromonitor put it this way.  “Fast food is changing, and not just in the category's dominant US market. Amidst fierce competition, fast food brands have been forced to differentiate themselves with broader menus, better food and higher-end outlet designs. In developed markets this has led to the popularity of the fast casual segment, but in emerging markets (most of which show a strong preference for full-service dining) it has helped fast food gain traction as a modern, lower-cost alternative to more traditional foodservice formats …

Bringing in new customers, clearly the branding opportunities inherent in the fast food business model have allowed these chains to appeal to developing market consumers' taste for exciting new dining experiences. Take South Africa-based chicken fast food brand Nando's, for example, has relied on strong branding, exciting flavors and a unique dining experience to set it apart from other chicken fast food chains, a fact that helped exceptional growth.

Similarly, UK bakery products fast food brands EAT and Pret a Manger each have found success with a positioning of convenient, high-quality food, a modern grocerant atmosphere with a platform for ‘fast’ service.

I’m sure you have all noticed that McDonald’s new focus on fresh meat, especially, has helped the brands compete with more traditional fast food concepts, and this kind of above-and-beyond competitive positioning will continue to integral to the success of any new fast food concept.  ….

Consumers have left clues and the universal commonalities in Ready-2-Eat and Heat-N-Eat fresh prepared food are fueling retail success around the globe.  Success does leave clues are you implementing the right clues to drive top line sales and bottom line profits for tomorrow?

Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or for positioning assistance call 253-759-7869 or for more visit  www.Facebook.com/StevenJohnson www.Linkedin.com/in/grocerant  or www.twitter.com/grocerant

Applebee’s Next Step AI App

Just how fast is fast food? How long do you in line waiting to order then getting through the drive-thru?  In our time starved world Applebee’s Grill & Bar just might become the most convenient restaurant to shop for dinner, order diner or eat dinner according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

So just imagine arriving at a restaurant for dinner and the food you ordered while driving there is waiting for you at your table and not in a bag filled with plastic containers. That is exactly what Applebee’s Grill & Bar is trying to do. 

Dine Brands owner of IHOP and Applebee’s is developing and testing an app that in theory allows diners to show up at a busy restaurant and be immediately seated in addition to having their food served upon their arrival and their final check delivered via the app.

Stephen Joyce, the new CEO of Dine Brands stated “It’s like converting casual dining to fast food,” You just might think of it as an ‘HOV lane for tech users would all but eliminate frustrating wait times associated with being seated, having an order taken and a bill delivered and paid” according to Applebee’s.

The fast is as it turns out diners spend more money when they order from one of those kiosks or from an app or table-top device, according to industry experts. In addition Erik Thoresen, principal at food service restaurant firm, Technomic believes that “Many of the casual dining brands are looking to take a page out of the fast food playbook”.” That leads us to ask just what is fast food today.

Where is your customer eating dinner tonight?  Do you have a path-to-purchase that meets the need-set of the on the go consumer asking what’s for Dinner?  Selling fresh food path is about retailing in new and non-traditional locations and new and non-traditional manner? Do you have the new electricity to garner top line sales and bottom line profits tomorrow? The consumer path-to-purchase is evolving is your brand and business model evolving?

Are you trapped doing what you have always done and doing it the same way?  Where is your new electricity coming from?  Interested in learning how www.FoodserviceSolutions.us can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Nestlé and Starbucks is a Partnership Creating New Electricity

Success does leave clues and when two global leaders combine forces for a common goal odds are very good that success will follow.  In the case of Nestle’ and Starbucks partnership there is a new platform positioned to move both brands from good to great industry positioning according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The partnership between Starbucks and Nestlé is a $7bn licensing deal that brings two of the coffee industry’s biggest companies together to create an alliance that will edify both firms’ bottom line according to Johnson. According to Johnson, “Brand relevance is in part driven with innovation in new food products in combination with new avenues of distribution all of which are the platform for the new electricity.”

Johnson stated “that in my minds-eye the new electricity must be very efficient for the supply and includes such things as new distribution, grocerant consultants, urban farming, marketing. This program has all of that.

Foodservice retailers to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing fresh food that is portable, fresh, with differentiation that is familiar not different.  That will require brands to embrace new fresh food partnerships more now than ever before according to Johnson.

In this case for Nestlé, the deal offers an opportunity to move seriously into the US coffee market, where its footprint has up until now been weak. It also gives it a better opportunity to compete with rivals, including JAB, a private equity company that is now the second biggest retail coffee business in the world after deals to buy Kenco, Douwe Egberts and Keurig, as well as coffee chains including Peet’s and Espresso House.

At first glance it might seem strange that Starbucks would want, or need, Nestlé’s help to sell coffee. It is already the biggest coffee shop chain in the world with a brand equity that you would think would make selling in retail easy. The fact is, Starbucks’ traffic growth has been slowing amid competition from fast-food chains such as McDonald’s pushing more aggressively into the market and more premium (and often independent) coffee shops.

Starbucks now  needs to focus its attention on returning its core retail store business to growth. And while retail is a major opportunity, building up this side of the business on its own would have been a distraction and taken a lot of investment in both time and money according to many published reports.

The Nestle / Starbucks deal is a classic licensing arrangement, in that extremely large amounts of money are changing hands for apparently no tangible assets. Nestlé will pay Starbucks just over £5bn to enable it to exclusively sell the Starbucks brand of coffee beans, capsules and ground coffee products around the world. That money is, without question, the greatest benefit of brand equity. It’s 100% marginal income and comes without any expectation that Starbucks will provide any form of product to aid Nestlé in its business.

Now remember that Starbucks will then receive a fixed proportion of Nestlé’s sales of Starbucks coffee in the form of quarterly licensing income. While no-one but the top brass will know the final levy, it is almost certainly going to be 3% of retail price. So, for every £8 bag of Starbucks coffee that Tesco sells next year, 100% of it will come from Nestlé but 24p from each sale will go to Starbucks.

Too many marketers scoff at licensing as a bad branding move for their brand. Get a grip in an evolving onmichannel retail world I defy them to turn down millions in pure profit every year. Where is your new electricity?  Could outside-eye’s help you find the right fit to help you drive top line sales and bottom line profits? 

So just what is your New Electricity? Success does leave clues www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us

Walmart is Winning the Long Game

Last week when Kroger announced that it will close all 14 of its Kroger banner stores in Raleigh-Durham, North Carolina it reminded the team at Tacoma, WA based Foodservice Solutions® that three years ago we were the first food consultants to predict that Walmart would be the leader of the grocery sectors “middle’. 

While being stuck in the middle of any retail sector did not use to be a good thing as times change so does our thinking.  Being the leader of the ‘middle’ of the grocery sector just may be the safest place to be according to Steven Johnson the Grocerant Guru®.  Walmart’s rollout of rotisserie chicken proved that their current ability to succeed within the Grocerant niche may still be five years away. 

Kroger has another banner in Raleigh-Durham Harris Teeter that does well with grocerant niche Ready-2-Eat and Heat-N-Eat fresh food positioning in the mind-set of the consumer. Yet, we question if they can maintain that customer mind-set with their current product mix offerings.

Harris Teeter much like Mariano’s a Kroger banner in the Chicago area mind-set customer relevance, sales, and profitability can prove to be a mixed bag. Kroger has several markets that they have two competing banners.  If Raleigh-Durham is a clue it just might be that brands and banners that compete against themselves just migh be a strategy that worked best in the 1980’s or 1990’s rather than today.

WinCo, Aldi, and Lidl are all building new stores, evolving their solo brands to best compete in the retail foodservice world and have proven that the three of them have lower price points than Walmart, fewer ‘out of stocked’ items than Walmart, and service that rivals or beats Walmart. It is for that reason we once again say Walmart is now the leader of the ‘middle’ of the grocery sector.  Today that is a good thing. 

After all just think about it what does that mean for Albertson, Giant Foods, Kroger and Publix which one of them can win against Whole Foods, Wegmans, or Central Market? The foodservice sector is evolving faster than ever.  Customer migration back and forth from restaurants, grocery stores, c-stores, drug stores, and dollar stores has never been so intense. 

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit www.FoodserviceSolutions.us for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.

New Non-traditional Food Retailers exploit OmniChannel Options to Drive Sales

Legacy food manufactures and many legacy retailers are at a cross-roads trying to sell a branded product that has out live it’s shelf-life, lost customer relevance, looks more like yesterday than tomorrow according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

 Gone are the days that national syndicated food research studies from Nielsen, NPD Group, or Technomic provided restaurants, grocery stores, and C-stores all the valued information a company needs to understand the competition while identifying a clear path for its own direction for differentiated growth.

 Today successful fresh food retailers focused on consumer’s desires, wants, and need-set have the ability to exploit the Onmichannel retail world to build top line sales and bottom line profits. Foodservice Solutions® has identified, quantified, and qualified new relevant metric’s that are relevant to consumers as regular readers of this blog know. Consumers continue to migrate from legacy CPG foods and food preparations process to grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food according to Johnson.

 Regular readers of this blog also know that Foodservice Solutions® FIVE P’s of Food Marketing have become must have tools in Food Marketer’s tool kits. too garner the best menu mix offerings neighborhood by neighborhood and or city by city depending.  While we developed those tools 9 years ago there are some consults just not holding webinars on Delivery, food portability and how to best integrate a branded solutions.  One word of caution if they are this late to the game there insights might look more like yesterday’s insights than tomorrow’s.

Technology today can empower marketer’s ability to leverage the halo of the brand neighborhood by neighborhood or city by city.  Yes, it’s more work but the results can drive top line sales and bottom line profits all the while edifying your brand, franchisees, and most important your customers. 

Is your brand ready to grow outside of your four walls? Brand relevance has never been as important as it is today. Is your brand relevant everywhere? Could Outside-eyes drive your top-line sales and bottom-line profits?  We think so.   

Since 1991 Foodservice Solutions® a Tacoma, WA based retail foodservice consultancy has been the global leader in the Grocerant niche. For product or brand positioning assistance contact Steven Johnson at:grocerant@q.com or the Grocerant LinkedIn page or on Facebook at Steven Johnson, BING / GOOGLE: Steven Johnson Grocerants or Grocerant on Twitter