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

Lunch boxes, desserts, coffee s drive convenience stores Sales

Mix and match grocerant niche meal components continue to drive incremental top line sales and bottom line profits for retail around the world according to Grocerant Guru® Steven Johnson of Tacoma, WA based Foodservice Solutions®.

In South Korea sales of boxed lunches, desserts and coffee at local convenience stores have increased as more South Koreans seek cost effective meals and snacks in the face of rising consumer prices.  BGF Retail Co., the operator of South Korea's largest convenience store chain, CU, said revenue from boxed lunches sold at its outlets surpassed that of instant cup noodles for the first time last year.

Consider this growth just three years ago, sales of lunch boxes at CU were less than half of those for instant cup noodles. Now sales of lunch boxes in the January-April period advanced 19.5 percent on-year, while sales of instant cup noodles rose a solid 13.3 percent during the cited period, BGF Retail said.

Sales of desserts also jumped at 7-Eleven in the first four months of this year, nearly doubling from the same period a year ago, its operator, Korea Seven Co., stated. Grocerant niche sales figures in South Korea have been on a constant rise, growing 102.2 percent in 2016 and 135.4 percent in 2017, Korea Seven said.

If you are still skeptical of the power of the Grocerant niche consider this GS Retail Co., operator of another major convenience store chain, GS25, said sales of brewed coffee at its outlets skyrocketed 268.9 percent on-year in 2017. Its brewed coffee is priced between 1,200 won (US$1.11) and 2,200 won, less than half the average price at local coffee chains.

That grocerant growth comes as South Korea's consumer price index climbed only 1.6 percent in April from a year earlier, accelerating from the previous month's 1.3 percent on-year gain, according to government data. It was the largest increase since October, when the comparable figure was 1.8 percent. So if you are looking for incremental growth it just may be time to consider asking Foodservice Solutions® Grocerant Guru® for some insights.

For international corporate presentations, educational forums, or keynotes contact: Steve@FoodserviceSolutions.us  the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. Visit: www.FoodserviceSolutions.us for more information

Restaurant Customer Counts stifled by: The 65 Inch HDTV Syndrome

Today as the line between restaurants and food retailers is growing ever thinner. The fight for America's food dollars continues to intensify as consumers find fresh prepared Ready-2-Eat food options at a wide and growing array of retail outlets across almost every retail channel including clothing retailers, convenience stores, chain drug store, chain restaurants, grocery stores, club stores, vending, food trucks and even more non-food retailers like dollar stores. It has become the new electricity driving customer frequency according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

While manufacturers, retailers and restaurants worry about choice overload, consumers have embraced their new choices and show no signs of returning to the old ways. This has resulted in consistent sales declines at legacy food manufactures and Johnson sees no end in sight as grocerant growth continues to expand around the globe. This fight is taking place in what is called the grocerant.

While Johnson and the team at Foodservice Solutions® identified The 65 Inch HDTV Syndrome and presented the findings at MUFSO back in 2012. The restaurant industry is not an industry known for trying to be first as in fastest to market with an ideation, food or technology advance. In the United States the larger the chain in almost all cases the more slowly they are to adopt something than a smaller chain or independent restaurants will. Chain restaurants goal is simple feed one meal at a time in the restaurant while protecting and edifying the brand. It’s 2018 and food delivery which Johnson touted in his MUFSO presentation in 2012 is just now being taken as a serious brand extension.

Historically chain restaurant leaders have denied the credibility of start-up competitors as non-relevant. The pizza sector is a great example; evolving from family dinning independents to national chain of "Red Roof" Italian, then to delivery only outlets and now take-N-bake is garnering market share in the legacy pizza sector.

Trends in the Food Industry Point to an Increase in Non-Traditional Meal Occasions

At the intersection of the consumer, fresh prepared food and technology we fine that consumer eating behavior is evolving and is now beyond the control of traditional food marketers. Evolving culture and lifestyle, demographics along with the new uncertain economy are all putting pressure on the American food consumer:

Demands of work, economic shrinkage, demands of raising a family, commuting, social interaction, kid's after-school activities, all contribute to a food marketplace where convenience vies with price over legacy brands. Recent advances in food packaging and new points of non-traditional food distribution have empowered consumer choice, and Americans are embracing these choices even as legacy marketers cringe. Who's after restaurant food dollars… simply put… everyone.

Why should a restaurateur you care if Walgreens is selling fresh prepared Ready-2-Eat and Heat-N-Eat fresh prepared ‘better-for-you’ meal components? Why should you care if Whole Foods, Trader Joe's, Safeway and Wegmans are selling Ready-2-Eat and or Heat-N-Eat fresh pizza? Why should you care if Coinstar is selling Seattle Best Coffee at 1,000 locations for $1.00?

You should care because they are selling it, and you are not! The fastest growing sector of retail food service for the past four years has been the Convenience store sector. The C-store sectors growth in large part has been driven by fresh prepared food. Non-traditional avenues of distribution are growing, gobbling market share while establishing new patterns of consumption, price points and customer loyalty. The grocerant niche meals, meal components are the new electricity driving food industry growth and customer adoption.

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, urban clothing, grocerant consultants, urban farming (produce, seafood, etc.), autonomous delivery, cashier-less retail, cash-less payments, digital hand held marketing.

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 retail food brands and manufactures to embrace new fresh food partnerships more now than ever before according to Johnson.

The team at Tacoma WA, based Foodservice Solutions® see expanded retail disruption driven by the 65 Inch HDTV Syndrome. Don’t let you’re retail brand be stifled for another 6 years. Look out-side your four walls.  Outside eyes can provide top line growth and bottom line profits.

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.

Grocerant Fresh Prepared Food with Portability: Is What’s for Dinner

When asking What’s for dinner there is a very good chance you are looking for fresh prepared multi-flavor, multi-ethnic Grocerant meal components that you can bundle into a customized family meal. Heat-N-Eat and Ready-2--Eat fresh prepared food with portability is driving retail food success in 2018.

Where are you shopping for you food today is not the same place your mother was nor is the meal prepared the same way it was back in the day according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In the US more and more multi-generational families are gathering for meals together.  Thus the demand for more divergent flavors continues to permeate the dinner table. Grocerant mix and match bundled meal component offerings allow for increased family integration, understanding and acceptance in less time without a required cook from scratch skill set according to Johnson.

Back in the 1940's cooking from scratch was the normal. The average home cooked meal took 150 minutes to prepare. Everyone sat down at the table and enjoyed it or not but they all ate the same thing. Today's "home cooked meal" takes on average less than 30 minutes to prepared. In most cases at least two different entrées are served.

The average time spent inside a McDonalds in the 2,000 was 11 minutes. Today 65+ percent of all McDonald's food is sold via the drive-thru. U.S. fast-food chains are increasingly remodeling restaurants in an effort to garner additional drive-thru customers inside and increase sales, simple because the drive-thru can't hold all the cars.

Consumers Want Easy to Prepare Meals

The grocerant niche continues to grow with companies like Central Market, Whole Foods, Wegmans and 7-Eleven entering the fresh prepared better for you space. Meal time is now becoming a time of convenient meal participation, with differentiation and individualization for the entire family. Safeway with its lifestyle stores are heading in the right direction however the stores are so large consumers are forced to spend more time in them than they want.

More often than not the multi-generational family today is multi-ethnic as well. Creating a demand for more varied flavors and additional cooking skill set that is simply not there. Grocery stores, Convenience Stores, Restaurants and Chain Drug Stores are all selling Ready-2-Eat and Heat-N-Eat fresh prepared food. Is your focus family dinning? Are you selling meals or meal components for Take-Out, delivery or Take-Away?

Lacking the skill set to prepared fresh prepared multi-ethnic meal components at home coupled with the time it takes to prepared a home cooked meal it is clear the buying habits of consumers will continue to evolve. Bundling mix and match meal components into a meal is one key driver within the grocerant niche according to Johnson.

Given that most American family are comprised of multi-cultural background. The fight for share of stomach will only intensify. How is you’re r brand prepared sell fresh prepared food to this new set of consumers in search of full flavored meal-components?

Since 1991 Foodservice Solutions® a Tacoma, WA based retail foodservice consultancy has been the global leader in the Grocerant niche. 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.  Visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant/ or twitter.com/grocerant for more.

Pizza Hut’s Customers helping Brew up Success

Grocerant niche mix and meal bundling continues to drive customer adoption and Pizza Hut is seeing first hand just how it works according to Grocerant Guru® Steven Johnson of Tacoma, WA based Foodservice Solutions®

Regular readers of this blog know all of Yum brands concepts are ‘looking for that elusive new electricity to drive incremental sales and profits.  In the case of Pizza Hut one of the new points of electricity just might be its beer delivery test in Phoenix, Pizza Hut said it is expanding the program to 100 locations in Arizona and California.

Pizza is now offering delivery of two packs and six packs of beer, ranging in price from between $3 and $4.50 for two packs and $5.99 and $10.99 for six packs. Six beer options are available: Budweiser, Bud Light, Blue Moon, Coors Light, Miller High Life and Shock Top.

Starting this month, Pizza Huts beer delivery has also been added at more Arizona locations including restaurants in Tucson, Glendale, Prescott, and Winslow. Pizza Hut’s California, beer delivery is now available at participating restaurants in Los Angeles, Bakersfield, Fresno, Riverside, Sacramento, Santa Barbara and Santa Clara, the company said. In Southern California, restaurants in Anaheim, Huntington Beach and Redding will be adding beer delivery later this month.

Pizza Hut said free delivery will be offered in some Arizona markets when customers purchase select six-packs of beer.  Increasing consumer check average is often a risky thing to do how Johnson believes that in this case delivery of beer is seen as a extra value added service and he believes that will not derail this program.

Pizza Hut has indicated that it intends to expand the beer delivery program quickly in 2018.  Roughly 1,700 of Pizza Hut’s nearly 7,500 domestic locations already have liquor licenses. Pizza Hut operates over 16,700 restaurants in more than 100 countries. 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, urban clothing, grocerant consultants, urban farming (produce, seafood, etc.), autonomous delivery, cashier-less retail, cash-less payments, digital 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.

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.