McDonald’s Quality Differentiation Will Win Breakfast Battle

The battle for consumers in 2014 is not a battle over breakfast but a battle over share of stomach. While breakfast is the current focal point, QSR leaders all must be mindful of the expanding success of fresh prepared food in both grocery stores and convenience store sectors. 

Taco Bells facile TV advertising can’t hide the fact that McDonald’s average sales volume per store is $1 million higher than the average for Taco Bell.  Simply put the reported $50 million dollar advertising campaign Taco Bell launched cannot be sustained. Then what?  The campaign may drive trial, for Taco Bell but will not diminish the brand value of the Egg McMuffin or McGriddle both unique category leaders copied by many, mastered by few.

McDonald’s is expected to have completed the rollout of new “high density kitchen tables” increasing throughput by mid July 2014. Once the “high density kitchens tables” are in place look for McDonald’s to begin serving many breakfast items all day long.  Once again stifling Taco Bell and creating additional points of distribution for breakfast items that Grocery Deli’s and Convenience stores are not equipped to deal with in fresh prepared food. 

Remember breakfast is a hot category, Americans made 12.5 billion restaurant visits for breakfast last year, making the morning meal the only daypart showing traffic growth for the third consecutive year, according to NPD Group. In-addition with beef prices on the rise, breakfast offered all day long creates a platform for increased consumer choice creating both calorie and pricing flexibility.

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche since 1991

Trader Joe’s Great Brand Positioning Drives Sales

When the United States Census Bureau first released numbers that showed in the United States, that of citizens that are 18 years old or older a full 50% are single, no one at Trader Joe’s was surprised. Trader Joe’s does it homework, understands consumers and what they want.  Trader Joe’s had researched consumer and did not want to sell 14 chicken breasts or 14 pork chops to a single person.  They knew single consumers of which 50% are they did not want 14 chicken breast!

Trader Joe’s was first considered a quirky unique store with personality but not much of a threat to legacy food retailers by industry insiders and grocery trade magazines. Trader Joe’s today has turned into a juggernaut. Food industry researcher Package Facts say’s that Trader Joe’s sales per square foot are $1,723  Whole Foods comes in at $973 per square foot compared to and industry average of $521. 

Leading the industry in sales per square foot at $ 1,723 is remarkable considering that they have only around 400 units and are not-quite a national chain yet either. Trader Joe’s success comes from solid brand positioning and is done without loyalty cards or TV Advertising.  Regular readers of this blog know we think loyalty cards are nothing more than a crutch for poor brand positioning.

When Foodservice Solutions® team conducted a recent survey they found that in-store shoppers were evenly divided between single and married shoppers at Trader Joe’s.  Additionally we found that the in-store shoppers were equally divided by age those over 50 and under 50 years of age. The one universal commonality no one was looking for 14 Pork Chops.

Trader Joe’s like it sister company Aldi stocks the store mostly with private label (Trader Joe’s) branded product.  Only about 5% of the products in-store are branded products from other companies. One trend that is clear is consumer like Trader Joe’s small packed servings size of both Ready-2-Eat and Heat-N-Eat food.

Consumers when questioned think that Trader Joe’s labeled products are Branded Products. Consumers do not consider them private label products. With sales over two times the industry average per store clearly as a brand Trader Joe’s is a success clue.

Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization contact us via Email us at: grocerant@q.com or visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Are Restaurant Customers Migrating to 7 Eleven?

7 Eleven is given retail chicken companies an old fashion licking.  As KFC struggles to find a way to rekindle it’s brand magic and garner back even a little  market share, Popeye’s and 7 Eleven do not have that problem.  Over the course of the past five years 7 Eleven has aggressively tested, launched, and found success with both Ready-2-Eat or Heat-N-Eat food.

It looks as if 7 Elevens has found a new winning grocerant niche Ready-2-Eat product with its new Chicken Dippers. Chicken Dippers are100% White Meat Pieces perfect for most any day-part from lunch, dinner, or snack.  With over 50,675+ global retail outlets 7 Eleven customers have embraced its Ready-2-Eat chicken from its Chicken Breast Tenders, Chicken Wings, and now Chicken Dippers.

7 Eleven “Chicken Dippers are pieces of 100-percent, high-quality white-meat chicken with no fillers that are lightly breaded in a tasty coating and served with a choice of Ancho Chipotle, Ranch or Honey Mustard dipping sauce. A cup-holder in the specially designed Dippers packaging helps keeps the sauce from spilling. Six "dippers" and sauce are value-priced at $1.99 at participating 7-Eleven^® stores.”

In the United States  Chicken Dippers are part of 7-Eleven's proprietary hot-to-go foods currently available in more than 5,200 of 7-Eleven's 7,800 U.S. stores. They are heated in Turbo Chef ovens, just like the company's whole and slice pizza, chicken tenders, chicken wings, mozzarella sticks and mini tacos.

Kelly Buckley, 7-Eleven vice president of Fresh Food Innovation "The Chicken Dippers proved so popular during limited-time in-store tests that store operators asked to keep them at the conclusion of the trial period," We asked are restaurant customers migrating to 7 Eleven?

"Millennials don't observe a three-meal-a-day schedule, but rather consume a mix of meals, snacks and mini-meals throughout the day as does the generation behind them," Buckley said. "They are busy as kids, and life has gotten no less hectic for them as adults. Kids, teens and 20-somethings are the biggest snackers.  Our menu has been evolving to include higher quality, value-priced smaller portions, mini-sizes and snacks that appeal not only to Millennials, but also kids and women as well." Chicken is viewed as a “better for you” product by both Teen and Millennials. 

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche since 1991

Aldi Differentiation with a Twist.

At Aldi high quality for less time and money works garnering customers daily.  Publix, Safeway, Marsh, Fairway, and Smith Supermarkets once the mainstay of the American Grocery store shoppers are finding one relatively new competitor that may change how and where consumers shop for groceries. Aldi is the company, currently with 1,300+ grocery stores in 32 states announced plans to open 650 new units over the next five years.

Aldi brand model has consumer relevance with a heavy focus on Freshness, Food Quality, and Price.  In fact Aldi is forcing legacy grocery stores to rethink their outdated model. Aldi is creating the undercurrents of change within the industry.  These changes are the most dramatic since the 1940’s according to leading industry analysts.

Industry research firm Packaged Facts found that "Today the threat is spread out among all retail channels, including drugstores, dollar stores, limited assortment chains, and — the elephant in the room — e-commerce."  Foodservice Solutions® Grocerant Guru™ believes that “Aldi may just be the elephant in the room that all U.S. grocery stores should fear.”

Foodservice Solutions® asked Why Aldi here is what we found:

1.       Streamline Shopping Experience Aldi keeps prices low by offering a fewer branded items, in fact they carry just 5% of the inventory of a traditional grocery store requiring less space, creating a platform a “quick-trip” in and out.

2.       Private Label Food Aldi’s “house brand” food products are rated by consumers as meeting national brands or exceeding them in both taste and quality.

3.       “Delight Index” Market Force Information a leading industry research firm places Aldi high on its “Delight Index” with companies the ilk of Trader Joes, and Whole Foods.

While consumers are shopping for Ready-2-Eat and Heat-N-Eat fresh prepared food across multiple channels Aldi has found a way edify the consumer shopping experience, save time, money and add freshness into its service.  Aldi understands that differentiation does not mean different in food retail, it means familiar, but with a twist.  Aldi has the right twist for continued success.

Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization contact us via Email us at: grocerant@q.com or visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Food Battle over Share of Stomach

Chain restaurants are now battling for sales with Grocery stores, C-stores, Liquor stores, and Drug stores. Legacy food retailers risk being marginalized by new concepts with smaller footprints, lower cost of goods and faster service.  Food retailers must understand the new dynamics in the industry and react properly in order to accelerate growth.  The focus is on the Grocerant niche.

Here is what we understand; consumer discontinuity in food retailing began in 2005 and continues. New points of distribution are growing, with retail outlets becoming smaller in size.  Nielsen in a new report finds “The underlying trend of shoppers moving away from larger to smaller stores continues. …Historically, traditional convenience stores were used for immediate or ‘distress’ purchasing, however,”  Today the change is accelerating driven in large part by major supermarkets around the world investing heavily transforming C-stores with contemporized relevance.

“The future has already arrived; it’s just not evenly distributed.” A quote made famous by William Gibson sure comes to mind don’t you think.  Fresh prepared “better for you” food and food options that are Ready-2-Eat or Heat-N-Eat continue driving the grocerant niches rapid success.

In the United States successful convenience store operators the likes of Sheetz, Rutter’s, and Wawa once notable regional players are now getting squeezed a bit by both 50,000+ unit 7 Eleven entering the fresh food meal niche and 1,700+ unit Casey’s General Stores who continues to drive sales and frequency with fresh prepared food. 

Many legacy restaurant companies the ilk of Darden and Brinker will undergo additional scrutiny in order to find a repositioned niche that will sustain them over time.  Legacy grocery stores that are seemingly stuck in the middle will simply fade away.

Wal-Mart’s supply chain advantage and industry reach will provide advantages, but won’t be enough to hold off Aldi or WinCo.  The added points of fresh prepared food distribution in the retail channel offered by Walgreens and Rite Aid will renew the local neighborhoods focus and rekindle community sprit garnering share of stomach from all other sectors.

William Gibson quote: “The future has already arrived; it’s just not evenly distributed.” How many of you are prepared for 2010.  If you have been waiting to see what’s next?  If so you might have just missed the bus.

Interested in learning how the 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization contact us via Email us at: grocerant@q.com or visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Retail Foodservice in Search of Millennials

Food retailers are search for new customers with 90 Million plus consumers between the age of 18 and 36 milling around outside U.S. restaurants it is by far and away the most sought after group of customers. These consumers are called Millennials and are in search of food discovery, value, and a social experience.  They are resetting the price, value, service equilibrium for restaurant operators.

Are Millennials important for restaurants? In” A 2010 report from Oracle, that focused on the banking sector, estimated that Millennials’ purchasing power will reach $2.45 trillion next year and $3.38 trillion—more than that of the Baby Boomer generation—by 2018. Longer-term, Millennials seem like too big a demographic for restaurants to ignore.” The answer is very important. Now back to the formula.

The old formula was: Price + Quality + Service + Portability = Value .  That formula has evolved with Millennials today Foodservice Solutions® Grocerant Guru has reevaluated, calculated and evolved the formula with Millennials and here is the new formula:  Price + Quality + Social + Portability = Value.

Retailers seeking additional incremental value from Millennials must be Constantly Changing Menu items enabling Millennials to Discover Seasonal Relevance, Authentic Sustainability with Creditability.

In a recent study of 2,000 Millennial-aged U.S. consumers titled “Understanding Millennials” conducted by the Hartman Group found:

1.   55 percent prefer communal tables at restaurants.
2. 68 percent ask friends before selecting a restaurant.
3. 87 percent will splurge on a nice meal even when money is tight.
4. 40 percent will order something different every time they visit a restaurant.
5. Millennials eat out the most frequently at lunch
6. They tend to eat four smaller meals a day at non-traditional times.
7.  30 percent eat foods that are certified organic (as compared to 21 percent of Gen X-ers and 15 percent of Boomers).
8. They prefer whole foods over processed food.
9. They will spend more on ethically sourced meats and farm-to-table experiences.
10.  80 percent want to know more about how their food is grown.
11. Food companies among Millennials’ top 10 most-trusted brands: Whole Foods, Trader Joe’s, Ben & Jerry’s, In-N-Out Burger.
12. When shopping in grocery stores, Millennial foodies spend more on premium ingredients and are more likely to opt for small-batch handcrafted beers and artisanal cheeses than the big brand names.
13. Custom food options, such as the 87,000 possible drink combinations that can be had at a single Starbucks unit, are seen as a need, not a luxury. 
14. It’s just not about nutrition for Millennials. They view food as entertainment and self-expression. 
15. Most important when choosing food in general, the top-scoring attribute was “A good value for the money,” at 36 percent. Good value was also the top-scored when respondent were asked what is more important when choosing food from a restaurant. Thirty-nine percent said value mattered most. 

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche since 1991

Albertsons, Safeway, Publix and Tesco are Perplexed while Take-Out finds Success.

Legacy grocery retailers around the world are finding it harder and harder to compete with new non-traditional fresh food retailers the ilk of Eataly, Eatzi’s,  Pret à Manger, Greggs, Eat, McDonalds, Popeye’s each selling Ready-2-Eat and or Heat-N-Eat fresh prepared food fast.

Mothers today still want to enjoy a family meal.  The problem according to Foodservice Solutions® Grocerant Guru “They do not have the time to cook nor do they have the required skill-set to prepare the multi-cultural highly specific flavor profiles meals that their families have grown accustom. Meal assembly is the standard today not cooking from scratch.” Grocery stores long term cannot compete with that.   

If you can’t Beat’em Join’em.  Publix developed a restaurant concept call Crispers (salad focus).  They have since sold it but is continues to grow and do well.  Now Great Britain’s Tesco is so concerned that is losing business to “takeaway trade in London” that it is about to launch a new concept to compete.

Restaurant, Deli, or Grocerant the new Tesco concept is reported to be a format that will position Tesco to directly compete with the likes of Pret à Manger, Eat and Greggs. The Grocerant format called "Tesco Express food to go" will focus on the urban London market. With a heavy focus on Ready-2-Eat during the mid-day-part, and Heat-N-Eat for the PM day-part Tesco is targeting time starved consumers.

Tesco has been refurbishing its grocery stores introducing "food to go" areas selling takeaway fare such as salads, artisan sandwiches and roast chicken much like Publix has done but Tesco is striving for much stronger consistency in quality, service, and freshness in it’s in-store fresh prepared food offerings.

Food consumers are migrating to new non-traditional outlets seeking Ready-2-Eat and Heat-N-Eat fresh prepared food.  Do you know where your current customers are getting their next meal or meal component? How are you selling food today? Are you selling food like you did 5 years ago or 5 years from now? Are your courting yesterday’s customers or tomorrows customers. 

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a Grocerant Niche leveraging integration strategy.