Retail Food Paradigm Is Evolving Fast

Are you watching Restaurant Start-Up, The Food Network or other Food Reality Shows? If not they are driving more viewers to their shows than ever all watching new 65 inch HDTV’s.   One show after another new Food programing continues to prove successful for CNN, CNBC and Cable channels all. What is even clearer is that consumers do not want to cook!

They love to watch Food cooking on TV, learning about food on TV; but most people do not know how to cook beyond the basics.  In fact research shows most do not want to cook and do not want to clean a kitchen. Have you noticed new retailers the ilk of Hello Fresh and Plated?  They are driving change in how consumers buy fresh food.

Tesco a global force in food retail has research, refined, revised its expansion plans to include restaurants in existing British stores. If a food retailer today wants to be successful 10 years from now they will have to sell food differently.  When Tesco bought up-market fast food restaurant Giraffe, it signaled they want to maintain and grow share of stomach over share of retail grocery.

Foodservice Solutions® Grocerant Guru™ says “Consumers today assemble meals they do not cook from scratch.”  They are migrating to convenience stores the ilk of Wawa, Sheetz, Rutter’s and 7 Eleven to same both time and money. Tesco has stores around the world and it is not just in the U.S. that this is happening but everywhere and Tesco knows it.

With consumers buying fewer and fewer food ingredients the need for large format grocery stores of the 70’s, 80’s and 90’s has pasted. Whole Foods only builds 30,000 Sq. stores today and most of the space is allotted to ready-2-eat fresh prepared food. Earlier this year we talked about General Mills testing direct meal delivery leveraging their brand Betty Crocker. How are you selling food today? How will you be selling it 10 years from now?

www.FoodserviceSolutions.us  specializes in global outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Contact: Steve@FoodserviceSolutions.us for a Grocerant Scorecard, Program Assessment or Vertically Integrated Marketing Program leveraging the 5 P’s of Food Marketing.

Does Red Lobster Have a Second Act?

Recycling executives from brand to brand and without a change in strategy may not be the success solution Red Lobster needs in 2014. What was once a successful strategy during the 1980’s and 1990’s recycling executive simply does not work in 2014 in most cases. Stacking food on the plate is a ploy not a tactic or strategy. 

Look around you noticed that Kodak is nearly out of business. Growing up in the 1960’s and ‘70’s, every family had a Kodak Camera and I still have one of mine. Those yellow boxes were everywhere and getting your very own Kodachrome camera was seemingly a rite of passage, heck, Paul Simon even wrote a song about it.

As digital cameras gained popularity, Kodak stuck to what they believed. They sneered at digital’s quality, righteous in their knowledge that Americans would NEVER give up shiny pictures for their photo albums.

Today, cell phone cameras take most of the pictures and they are rarely printed. Kodak will shut the doors, correct in their assertion that professionally developed pictures look better than low-resolution versions uploaded to Facebook.

Being dead and correct is not a great strategy.  Today chain restaurants are either growing or dying much the same as Kodak. Simply look at restaurants that filed bankruptcy of late: Claim Jumper, Mr. Pita, Friendly’s, Chevys, Sbarro, Perkins.  They are not all dead but they have been far from right. Red Lobster needs a second act not another chance.

These are statements frequently heard from legacy restaurant operators. Like Kodak, crystal clear that what has always worked will continue to work.

• Our executives have 30 years of experience and know how to run the business.
• We never use coupons, nor do we deliver.
• We don’t allow our brand to wander, we protect our brand.
• We don’t use online ordering, I-pad ordering or voice screen ordering.
• We don’t advertise on Google, Twitter or Facebook.
• We don’t open for breakfast.
• We like the umbrella approach each store different personality but under one umbrella.
• Video menus and video signage is visceral gimmickry.
• We don’t measure ingredients, we create daily specials and simply show employees how to make it
• We can’t raise our menu prices.

How did a dominant brand and sector leader like Kodak, in a rock-solid consumer staple lose everything? Simple, they determined the market, the direction of that market and took the steps to conquer it.  If that sounds like your restaurant, retail food sector or niche leader, you better keep reading.

There is little about today’s market, the consumer or food marketing / promotions that was predictable 3 years ago. In the next three years the rate of change will continue to increase. So let’s look at the above list:

Reliability and a comfortable working relationship is correctly a key to success.  However, if you find your team is blaming the economy, minimum wages increases, cost of health care and rising food cost for disappointing results. Do not forget that many restaurants companies are growing both the top and bottom line, number of units and garnering market share.  Did Red Lobster say any of that?  If so it might be time for Outside Eyes. 

We always/never use coupons – coupons and promotions are very complicated today. Add the online aggregators the ilk of Livingsocial and Groupon and how can you know what works. Here is the point, what you measure you manage. All advertising must have an objective that is clear and measurable to insure a proper marketing ROI. Is stacking food on the plate a tactic that will drive sales or is it a positioning ploy of the 1990’s? Will Hello Fresh or Plated take share from Red Lobster?

We don’t deliver – face it, convenience is a driving reason why foodservice is popular. If you do not want to deliver, consider outsourcing.  Delivery is not about you. That’s right it is about the consumer. Does Red Lobster have a strategy for dealing with Munchery?  Foodservice Solutions® does.

We protect the value of our brand and its integrity for the consumer, our shareholders and stakeholders.  We know the consumer is dynamic not static, but our customer’s comeback because we have a brand promise and they trust in us to keep that promise. Sounds a lot like Kodak, don’t you think?

We don’t use online ordering our food does not “carry” well.  Think about this if you don’t have a way to connect your menu to computers and mobile devices, your competition will woo your customers. Consumers are time starved, and hooked on technology, make it easy.

Five years ago Google or Facebook – as above, set up a Facebook page, it costs nothing. Have someone help if you need it and then monitor your page 5 minutes a day.  Today there is so much more. Is Red Lobster ready?

We don’t open for breakfast – you pay rent 24/7, find ways to increase the utilization of your “factory”. Considering catering or school lunch program, contract out your kitchen.  Don’t become the next Kodak of chain restaurants. In two years will Red Lobster more restaurants open or fewer?

Different store brands / personalities under one large corporation and all expected to operate utilizing a uniform set of metrics.  Worked well in the 70’s, 80’s but you have the answer.  Let me know just how well that works out.

Visceral gimmickry does not replace high quality food and great service ever.  Who defines quality service? You your brand promise or the consumer?

We don’t measure ingredients; my employees know how much to use – why have menu prices, let customer pay whatever they want. If you don’t care what your product costs, you CAN’T make money.
We can’t raise our menu prices – tell that to the gas station owner on the corner, or the farmer growing your food. Costs are up, you must raise your menu prices or you will not exist. That one we understand is underway.

Kodak management, smart and hard working as they were, did not see the world changing, fortunately you do. Realize that change is good and necessary. Act now to challenge your assumption, create new revenue streams and increase profits.  Success does leave clues, Disney movies leave you with a smile, being dead and correct is not a great strategy.  Does Red Lobster have a second act? We think so if actions reflect consumer relevance of today not yesterday.

Are you trapped doing what you have always done and doing it the same way?  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.

Is ‘Smart Money’ Betting Big that Restaurants Aren’t Needed ?

Back in the day the old adage was ‘follow the smart money’ and you will find success. Foodservice Solutions® team has been inundated with queries from chain restaurant operators and technology companies on the undercurrents and sea change in consumer acceptance, adoption of non-traditional fresh food outlets, and the role of technology-marketing-messaging.

In an Omni-channel cross-channel retail world simply doing what you have always done and doing it the same way does not work. Why are they calling us?  Simple we sold, placed the first 7 restaurant national accounts for On-line ordering in 1991 and continue working with innovating companies and products.

Today, the ‘smart money’ is focused on consumers and fresh prepared Ready-2-Eat and Heat-N-Eat Grocerant Niche food.  Once again Foodservice Solutions® is at the center of the action having identified, quantified, and qualified the fastest growing sector of all retail foodservice the Grocerant Niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food. So just what is ‘Smart Money’ today?

Here is how Taylor Soper of GeekWire explains smart money today: “Back in 2011, when Scott Stanford and Shervin Pishevar led separate investments in Uber’s $37 million Series B round back in 2011, fellow investors and other friends scoffed .“Why are you guys investing in a limo company?” the naysayers asked… Today Uber is now operating in 128 cities and valued at $18 billion, Stanford and Pishevar went on to start a venture capital firm called Sherpa Ventures. One of their first big bets was a $28 million Series B round that Sherpa led in a San Francisco-based food delivery startup called Munchery.”

Munchery makes the meals themselves and delivers them within in one hour.  There is an ever increasing number of ‘smart money’ venture-backed startups the ilk of  Munchery,  which is now at $40 million raised; Caviar, $15 million raised; Spoonrocket, $13.5 million raised all are similar to Uber and Lyft in that they’re using technology to improve a service that restaurants have not used or refuse to try.  Regular readers of this blog know we highlighted our 20-20 that’s 20 technology companies plus in the last year and 20 non-traditional fresh food retailers alone. The fresh food marketplace is evolving fast.

Now $28 Million would build how many Papa Murphy’s? How many Chipotle’s? How may Smashburger’s? In an Omni-channel cross-channel retail world the questions becomes: Why build a restaurant? Why hire, train, and maintain a staff when technology can edify the experience for less and do it faster?

Note: (Its simple consumers like restaurants they are not going away. However don’t get me wrong they will diminish in numbers, volume per unit, and value. They will look much different in the future,  they will smaller but they be here.) 

Technology Once a Friend of Restaurants Now a Foe

Sherpa Ventures co-founder Scott Stanford said “When you introduce something like Uber or Munchery, you change the paradigm with not only how that service or product is consumed, but how it is provided,”…. “If you can change the underlying economics of that delivery platform or that value chain, it puts you in a really interesting position from a financial perspective.”

When Red Lobster opens a new restaurant in 2014 they do it very much the same way they did 46 years ago?  Sure an up-dated menu, décor, and messaging but the business model has not been updated. Red Lobster and maybe your company’s business model might just look more like yesterday’s business model than tomorrow’s business model. Legacy hedge funds are buying into companies the ilk of Bennigans, Sbarro, and Taco Del Mar all are here. Are these companies the past, present, or future of Food Retail?

Soper went on to say “Similar to how Uber and Lyft let consumers hail a ride by pushing a few buttons on their smartphones, Munchery and others are doing the same for food delivery. It’s part of a growing trend of companies that, thanks to smartphone technology, are providing efficient and innovative on-demand services. “Consumer expectation has changed as a result of greater connectivity,” Stanford said. “When you think about what the Internet did to media and changed consumer expectation and requirements, the same thing is happening to commerce.” 

Foodservice Solutions® Grocerant Guru™ believes that companies the ilk of Lish, Peached, Spoonrocket, and Munchery will not only survive they with thrive for they provide “authenticity in being local, personal, while providing fast service.”  There is a new retail food business model unfolding today that model is mobile; it is creating disequilibrium for restaurateurs and reorganization or bankruptcy for others.

Consumer adoption of mobile and non-traditional retail food platforms has created discontinuity for Chevy’s Fresh Mex, Buffets, Round Table Pizza, Fuddruckers and Red Lobster to name but a few.

The Informational Superhighway is fast becoming a Mobile Neighborhood

Lish CEO Aakhil Fardeen stated: “Customers care about having a variety of the highest quality food, timely delivery, and a delightful ordering experience at an affordable price,” “Chefs also get really excited about the opportunity that Lish offers them. It gives them an avenue to make extra money — about two or three times what a restaurant job pays them per hour. They love the ability to get direct customer exposure, develop a following, and ultimately to build their brand in the community.”

Are restaurants dead no, they are however becoming very expensive to own and operate. Red Lobster is but one example. Yesterday’s business model is not the future of the restaurant business. Opening the same restaurant brand the same way you did 40 years ago does not work.  Companies the ilk of Starbucks that have evolved from coffee house to food merchant have consumer relevance and have successfully evolved with technology as well.

The food space is exciting it is dynamic not static.  The food sector is a market that is huge and too large to be consider just one market place for sure. The ‘smart money’ is today focusing on technology to bring customized, personalized, fresh prepared food to you for less. There are companies targeting the high-end, middle, low-end markets, each offering staples the ilk of Burgers, Pizza, Mexican, Sushi, Thai, Chinese, and Italian  to name but a few. 

This is becoming a land grab for share of stomach without the cost of the land.  Think about it Americans spend $151 on food each week.  With technology today consumers never have to leave home, or work and can eat with or without cooking, or doing the dishes. Does your restaurant have ‘braggability’? Without braggability why would anyone come to your restaurant? Do you know how to create ‘braggability? We Do.

From Hand Held Food to Hand Held Food Ordering

“The takeout and delivery market today is estimated to between $70-to-$100 billion today, and a small fraction of these orders happen online today even fewer on mobile devise.  ‘Smart Money’ is considering how frequently people purchase food and how technology can improve the way people get food, you start realizing why entrepreneurs and investors are simply funneling money into the Grocerant Niche opportunity.

In our Omni-channel retail world there can and will be many winners particularly in the food space.  The competitive force driving change /adoption today is the consumer.  The retailers that succeed with have a blended balance of efficient technology, fresh flavorful food, and the ability to deliver that food to your office or home in minutes, not hours or days and an integrated brand marketing messaging with relevance.

Restaurant Customer Migration Can Be Stopped

Starbucks and Chipotle each do three things better than almost any other company they continue to evolve with smaller units, faster service, maintain authenticity.  Has your company completed one of Foodservice Solutions® Grocerant Niche Assessments or a Grocerant Scorecard?

Are you trapped doing what you have always done and doing it the same way?  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.

Grocery stores, C-stores, and Restaurants All Benefit

From Canada to Mexico retailers are readjusting their product mix in order to court younger customers, maintain market share, and increase sales productivity.  Walmart’s express format C-store works.  It may have been late to the game but Ready-2-Eat and Heat-N-Eat fresh prepared food drives sales.

In Canada Loblaw has been seeing customers embrace fresh food, specifically on perishables and foodservice prepared food across all Loblaw’s store formats. In turn they are expanding Ready-2-Eat and Heat-N-Eat fresh prepared food all outlets including its discount brands. Grocerant Niche fresh prepared food drives retail food sales success today according to Foodservice Solutions® GrocerantGuru™.

In the Convenience Store News 2014 Foodservice Study theyfound:

1.       Fully 81 percent of the c-store operators predict an increase in their foodservice sales.

2.       Fully 63.5 percent of all respondents anticipating that their foodservice profits will grow in 2014 compared to 2013.

3.       Three-quarters of c-stores opt for proprietary programs vs. branded.

4.       Foodservice promotions, via coupons, social media, loyalty programs and more, increased industrywide by a third over the past year.

5.       Nearly two-thirds of responding operators said they offer customer seating in-store alongside their foodservice selection, and approximately one-quarter provide outdoor seating.

6.       Take-home, heat-and-eat dinner solutions are offered by 30.5 percent of retailers.

7.       The lunch daypart is still bringing in the largest share of foodservice sales for c-stores (30.3 percent), but the breakfast daypart is not far behind (26.4 percent).

Technomic found restaurateurs need to pay attention to Ready-2-Eat and Heat-N-Eat fresh prepared food as well. More important it’s the much sought after Millennial customer driving adoption of grocerant niche products.  Restaurants in a tight battle for share of stomach must court this group or risk excluding a generation of customers. In Mexico Oxxo's the  fast growing C-store  retailer opened a net 348 new stores in Q2, to reach 1,189 with same store sales continuing to post positive results. A Technomic infographic reflecting Millennial purchase preferences can be see below. 

Success does leave clues many can be found within your Grocerant Niche Scorecard. The Ready-2-Eat and Heat-N-Eat fresh prepared food space is getting crowed.  Is your company prepared to extend your brand to Millennials? Do you understand the undercurrents of change in the retail food space today? Call Foodservice Solutions® to get your Grocerant Scorecard at: 1-253-759-7869.

Are you trapped doing what you have always done and doing it the same way?  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.

Dollar Stores Want to Sell Fresh Food For Less than Your Grocer

Consumer’s ongoing battle for time and money can be viewed in retail within the Dollar store sector.  Take Dollar General for example with 11,120 locations in the US alone in 2013 they had more stores than Walmart, Kroger, Target combined.  America is shopping at Dollar General. 

The Dollar store sector began selling milk, eggs, with success and now has begun to test Ready-2-Eat and Heat-N-Eat food with great success. Foodservice Solutions® Grocerant Guru™ is not surprised stating “consumers have been flocking to the dollar sector for years and that sectors growth record alone indicates they are selling what the customers want.  Today consumers want Ready-2-Eat and Heat-N-Eat fresh food why would dollar stores not sell it?”  

The fact that 50% of United States residents over the age of 18 are single has been a driving factor in this sectors successful positioning according to Steven Johnson the Grocerant Guru. Manufactures including legacy giants the ilk of General Mills and start-ups like vegan mayo maker Hampton Creek see the numbers are targeting products to sell within the dollar store sector.  General Mills Vice President Shawn O’Grady said recently “Here, we market our products in smaller package sizes—perfect for one- and two-person households—which include many of the 55-year-old-plus consumers,” 

Fresh Food manufactures have taken notice and have been calling Foodservice Solutions® Grocerant Guru™ for product positioning, pricing and messaging assistance.  We are convinced that around the country the introduction of new Ready-2-Eat and Heat-N-Eat fresh food offering will soon contribute to the continued success of the dollar store sector.

Are a legacy food manufacture trapped doing what you have always done and doing it the same way? Is it time that you look at Ready-2-Eat and Heat-N-Eat fresh prepared food? 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?  Call 253-759-7869 for your Grocerant Scorecard or Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

IFMA it’s time Technomic’s Ron Paul receive a Golden Plate Award.

Ron Paul standing tall in Retail Foodservice for nearly five decades and continues to be the speaker of choice for many national and international food industry conferences. If success leaves clues Ron Paul Founder, CEO, and President of Technomic has left many for all of us to follow.  Technomic continues to provide information services, consulting, tutelage too retail food manufactures, chain restaurants, food marketing companies, equipment manufactures, and Grocerant Niche companies. Congratulations Ron!  

When it comes to understanding the big picture, Ron is the best.  From food industry manufactures too defining every niche in the restaurant industry.  Ron understands the relationships and the how to assist each focus on the consumer.  His contributions have contributed to the success of more companies than I can count.

Ron Paul is an industry supplier of Fact Based information that has help drive QSR sales alone from 2 billion when he started to over 125 billion today. IFMA, it’s time Technomic’s  Ron Paul receive a Golden Plate Award for Supplier of the Year.

While Ron and Technomic were early to focus on the Home Meal Replacement niche industry focus shifted so did Technomic’s focus . However with his tutelage, encouragement and prompting I dug in and thus evolved the Grocerant Niche, my practice. Success does leave clues and if being a gentleman, a professional and are not enough Ron Paul is a friend to many in our industry and that is a clue to his success.

Since 1991 retail food consultancy www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche for more on Foodservice Solutions® Email: Steve@FoodserviceSolutions.us

 http://www.linkedin.com/in/grocerant, twitter.com/grocerant 

Fresh To Order “Fine Food Fast”

In our Omni-channel retail world one young company is doing many things right.  That company is Fresh To Order.  Their slogan is “Fine Food Fast”.  With most stores located in the Southeastern United States they strive to serve the freshest, finest, food in the Southeast.  We think they the halo of better fresher food, fast service in light attractive setting will propel them from the south through-out the United States.

Fresh To Order or F2O for short is tapping into the customer focused ‘better for you’ Ready-2-Eat and Heat-N-Eat fresh prepared food Grocerant Niche success sweeping the country and growing around the world.  They have utilize all but focused on two of Foodservice Solutions® 5 P’s of Food Marketing Price and Portability to drive additional contemporized relevance

F2O believes that customers will notice with “all their senses the freshness and quality of every ingredient that they put into our products from our lettuces and vegetables to our proteins and sauces, soups, teas and coffees. They taste and look different and better because they are. Sure it costs us more, but we trust that our guests will notice that we are a different and fresher alternative in dining; this in turn makes our investment in our products worthwhile”.

Giving their messaging added contemporary relevance is the fact that from the beginning they integrated both Online Ordering and Catering programs into the marketing messaging.  F2O understands that consumers today are dynamic not static, they want to buy, consume and enjoy their meals when and where they choose.

‘Fine Food Fast’ can be found in all items including their new bison burger. Jesse Gideon, Fresh To Order’s COO and corporate chef. “Our burgers go beyond what you would typically expect, from both a nutritional profile and the bold flavor combinations.”

The F2O bison burger is made with ground bison, dried cherries, and a few trade secrets, and served with baby field greens, horseradish aioli, and caramelized onions, the burger clocks in at less than 600 calories. It comes with a fresh salad and toppings for only $10.90. That’s bold, flavorful and priced perfectly for ‘fine food fast’.

Are you trapped doing what you have always done and doing it the same way.  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? via Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information