Foodservice Sales a Battle for Share-of-Stomach

Foodservice Solutions® Grocerant Guru® Steven Johnson coined the term Grocerant after his first visit to Eatzi’s back in 1996.  Johnson and was published in both FoodService Director and Nation’s Restaurant News in August  the same year in an opinion article called, Call Them Grocerants.

Since 1996 Foodservice Solutions® primary focus has been assisting others drive top line sales and bottom line profits with the Grocerant Niche filled Ready-2-Eat and Heat-N-Eat fresh prepared food and what a journey it has been. 

The Grocerant Niche is all about Ready-2-Eat and Heat-N-Eat fresh prepared food that is deemed ‘better-for-you’ by consumers.  It’s about the consumer migration away from traditional restaurant meals eaten out, away from CPG pantry stocking from legacy grocery stores, and away from high priced milk and bread from convenience stores too fresh food fast for takeout, takeaway, to-go, and drive-thru’s meals to go or delivered or in many cases today a simple meal kit. 

Foodservice retail today is about Share of Stomach.  The question becomes who is winning the battle of What’s for Dinner?  While foodservice trade media, the ilk of Progressive Grocer, Supermarket News, Nation’s Restaurant News, Convenience Store News and the National Restaurant Association all stepped up their focus on the grocerant niche each tries to define it as their own.  They are all wrong the grocerant niche is customer-centric. 

It’s the about the consumer and foodservice retailers battle for share of stomach. Defining it for your category only limits your ability to understand the customer, meal periods, the ‘new meal’, and accept that there are new avenues of fresh food distribution.

The team at suspects that all of the attention, accolade, and success that our own Grocerant Guru® has had helping industry titans and start-ups find success with in the grocerant niche has caused quite a stir. In fact daily readership of our blogs posted to our social media accounts has hit a new record of 26,250 views per day,   thank you.  

The team at Tacoma, WA based Foodservice Solutions® thanks all of you for assisting us become the global leader in the grocerant niche and maintain that leadership.  Why, all of the attention now? Increased customer migration, evolving consumer consumption patterns, and increased access to Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food. 

Evolving meal occasions day-parts, channels, and snacking have help evolve the battle for Share of Stomach. The Grocerant niche is here to stay. Consumer migration from legacy points of fresh food distribution too new points of fresh food distribution that highlight take-out, take-away, and on-the-go consumption will continue to drive change in the retail foodservice landscape. 

Today the grocerant niche is fast becoming a disruptive force driven by ongoing customer migration according to our Grocerant Guru®. It’s was 2015 that we saw Americans spending more eating out than on groceries for the very first time.  That reallocation of spending has created by what Foodservice Solutions® team has coined Eating-Out while Eating-In.

Success does leave clues and since 1991 www.FoodserviceSolutions.us  has picked up important customer relevant clues and exceled helping others drive top line sales and bottom line profits leveraging insights from those clues. You too can drive incremental top line sale and bottom line profits.  Visit: www.GrocerantGuru.com or Email: Steve@FoodserviceSolutions.us for information on how you can edify sales at your operation. 

Amazon Courts Millennials

Edifying your foodservice brand with the most technology savvy set of consumers ever, Millennials is the goal of every foodservice retailer.  Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® believes that Amazon is five steps ahead of everyone other retailer on the planet.

As Amazon debuts a “New Pickup Service for Need-It-Now Items it seems that it makes Fast Food Restaurants looking like a covered wagon.  Why? The new service will have your order is ready within two minutes at five locations at the first five locations that they roll them out at.  Yes, within TWO MINUTES.

Simply put Amazon is establishing new standards for delivery when it comes to meeting Millennials immediate demand, wanting what they want when they want it.  Instant Pickup, a free service offering Prime and Prime Student members a selection of daily essentials available for pickup in two minutes or less at five of Amazon's fully staffed pickup locations in Los Angeles; Atlanta; Berkeley, Calif.; Columbus, Ohio; and College Park, Md. 

Foodservice retailers does I ask you does your speed of service look more like a covered wagon than fresh fast food? Within the next twelve months will you service look more like 1999 or 2019 more like yesterday or tomorrow?

Here is why I ask Amazon’s Instant Pickup will include snacks, drinks and electronics, as well as some of Amazon's most popular devices. Remember the term ‘big data’ Amazon knows just what those Millennial college students what and when they want it.  This Instant PickUp is a big data driven ideation that will garner Millennials buy-In while edifying a branded relationship with Amazon that may last forever.

An Amazon spokesperson stated "As shopping behaviors continue to evolve, customers consistently tell us that they want items even faster. Whether it's a snack on-the-go, replacing a lost phone charger in the middle of a hectic day or adding Alexa to your life with an Echo, Instant Pickup saves Prime members time.”

Currently Amazon operates 22 staffed pickup locations on or near college campuses across the country. All Amazon customers can ship their orders to a pickup location, and Prime members receive Free Same-Day and One-Day delivery. So when was the last time you reviewed you operating standards?  Outside eyes can drive top line sales and bottom line profits. 

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

What’s For Dinner? Odds Are Handheld Food for Immediate Consumption

What is the cost of your loyalty program according to Steven Johnson Grocerant Guru® at Tacoma WA based Foodservice Solutions® it just might be time to evaluate if you are winning customers or buying them. 

With food cost deflation at hand and consumers still recovering from the great recession there is a battle for share of stomach underway. Today current research indicates that Portability and Price are key drivers of customer traffic in path to purchase according to Foodservice Solution® team. 

Back in the day Technomic edified Foodservice Solutions® 5 P’s of Food Marketing  the undercurrents of change and success within the food industry were forever changed.  That changed can traced back directly too Foodservice Solutions® 5 P’s of Ready-2-Eat and Heat-N-Eat fresh prepared food marketing.

Increasingly the role of price and portability are being used with greater emphasis than ever before according to Foodservice Solutions® team. The clear result can be found in customer migration from legacy chain foodservice retailer to new non-traditional food retailers the ilk of Ikea. 

The FIVE P’s of Food Marketing were first introduced back in 1994. Since then they have been implemented, and integrated by foodservice companies including Full Service Restaurants, Chain Drug Stores, Grocery Stores, QSR’s, and C-Store clients.  The 5 P’s are:

After repeated successful retail food industry adoption of Foodservice Solutions® 5 P’s of Fresh Food Marketing, Technomic conducted qualitative and quantitative research then compiled the following infographic highlighting the importance and consumer relevance that portability play’s today.  The Technomic infographic is entitled Pertinence of Portability:

McDonald’s 2 for $2.50, Burger Kings 5 for $4 or Wendy’s 4 for $4 are targeting the 50% of consumers over the age of 18 that are single.  These are meals and priced to be pantry busters.  The simple fact is a single person cannot cook a hamburger at home for a $1.00.  Why would anyone cook from scratch and spend more money while earning less than they did before the great recession?

Food commodity deflation continues as a back drop, fast food retailers see an opportunity to drive solid customer counts increases in 2017 regaining customers lost to grocery stores and C-stores the past 8 years. You have all heard the old adage time is money.  Handheld food for immediate consumption is driving top line growth and bottom line profits while garnering market share in 2016 because time is money.

Visit: www.FoodserviceSolutions.us  if you are interested in learning how Foodservice Solutions FIVE P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization or you can learn more at Facebook.com/Steven Johnson, Linkedin.com/in/grocerant/ or twitter.com/grocerant

Jack in the Box On Trend, On Technology, On Time

Success does leave clues and time and time again industry leading companies share success clues with us.  In the case of Jack in the Box evolving with the customer is something they have done very well and according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® Jack in the Box’s ability to integrated technology with consumer relevance is one clue to their success. 

In a recent study conducted by Morgan Stanley found “The portion of restaurants’ sales coming from delivery could top 40% by 2020, roughly a sevenfold increase from current levels”.  Jack in the Box understands the consumer as well as any retailer in the food space thus they announced this week that they would expand food delivery with DoorDash using  Marble, the maker of autonomous ground-delivery robots”.

Yes, Robot delivery , it will be an on-demand delivery platform operating in more than 500 cities nationwide for DoorDash that will begin testing deliveries under a pilot program in the San Francisco Bay Area. Under the pilot program, DoorDash will be using Marble’s robots to deliver customer orders in select neighborhoods.

“We’re thrilled to be partnering with DoorDash as we continue to build towards the city of the future, a city in which on-demand delivery is accessible to everyone,” says Marble CEO Matt Delaney. “DoorDash has a strong reputation for top-tier restaurant partnerships and innovative logistics technology. We’re excited to have our robots work with them to expand options for delivery and reduce urban congestion across communities to create a more enjoyable neighborhood experience.”

To celebrate the Marble-DoorDash partnership and initial pilot program, the companies partnered with restaurant chain Jack in the Box in early August to test out a delivery in the North Beach neighborhood and showcase the partnership. This delivery demo expands upon the ongoing relationship between Jack in the Box and DoorDash, which recently increased Jack in the Box’s delivery options to more than 830 restaurants across 229 US cities. 

The Morgan Stanley report found “demand for off-premise transactions is surging most sharply for coffee and burger chains.  Almost half the respondent base (45%) had ordered delivery in the prior six months, and 85% had visited restaurants. In addition 43% of delivery patrons opted for at-home or at-office service instead of going to a restaurant, up from 38% in 2016.

Jack in the Box understands that the customer is dynamic not static and to maintain customer relevance they need to evolve with the consumer.  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 the clue you need to propel your continued success.

Firehouse Subs Evolving with Consumers

The consumers is dynamic not static and Tacoma, WA based Foodservice Solutions® Grocerant Guru® Steven Johnson as regular readers of this blog know chain restaurants muse be dynamic as well.  In the case of Firehouse Subs it is clear the chains leadership has the pulse of the consumer right.

When Firehouse Subs noticed a shift in customer traffic patterns they took a close look they found that the “Dine-in incidents declined as take-out business steadily rose”.  Don Fox, Firehouse’s CEO knew that was a problem.  In Firehouse’s DNA is its steamed meats and cheeses and just try wrapping those sandwiches in paper or foil, however, and the differentiator suddenly cuts the other way: The bread is soggy. Moisture builds up the food quality goes down.

Don Fox, Firehouse’s CEO stated “It’s just that it wasn’t as good as what we were serving in the dining room. In the dining room we don’t package the food at all,” … “We serve the food plated in a basket. Great visual appearance. Every sandwich made and heated to order. That’s the ideal serving condition.”

Once the problem was defined the team at Firehouse Subs focused on how to  bridge the to-go food quality gap. It took a lot of work to identify, quantify and qualify the problem and create a new system wide packaging lineup.

The new packaging It consists of three bagasse containers, which are “100 percent compostable eco-friendly material made from the fiber mass of sugarcane. There’s one for Firehouse’s new smaller subs, one for medium sandwiches, and a container ideal for large orders. The containers are also microwaveable and heat tolerant up to 212 degrees, designed to handle hot food, grease, and be cut resistant.”

Fox stated “From a green perspective, it’s an environmentalist’s dream. But the key benefit is it’s just excellent for the presentation of our product,” … “Far, far superior to anything we’ve done in recent years. We really feel we’re in the best position we’ve ever been to deliver an experience for our take-out customers that’s now on par with our dine-in experience.”

It must be noted that to execute and implement the change it too a year. Fox says Firehouse had to find a manufacturer who could produce the vast quantity his growing chain needed. It required tooling at the plants and ramp-up time.

“The manufacturing capacity out in the packaging universe was fairly limited,” Fox says. “… The logistical challenges were a little different because the cube size for shipping was a lot different than the wraps. It does add cost to the PNL but we feel it’s well worth the investment on the PNL to improve the guest experience on the off-premise consumption.”

Success does leave clues and identifying, quantifying, and qualifying a problem is step two.  Step one is our success clue of the day the customer is dynamic not static paying attention to the consumer first. 

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 Facebook.com/Steven Johnson, Linkedin.com/in/grocerant/ or twitter.com/grocerant

Should Legacy Grocery Stores be Selling Meal Kits?

What business are legacy grocery stores in?  Are they in the ‘fill the pantry’ business?  Are they in the produce business? Are they in the fresh meat and seafood business? Are they bakeries? Are they in the grocerant niche fresh prepared food business?  We were asked last week if legacy grocery stores should be in the Meal Kit business.  So here is the team at Tacoma, WA based Foodservice Solutions® thinking.

The simple and universal answer from the team at Foodservice Solutions® was yes they should be in the meal kit business.  After all the meal kit business today represents only $1.5 billion in food sales while the legacy grocery store business is close to $800 billion in sales today.  Our good friend Bill Bishop Chief Architect at Brick Meets Click says $1.5 billion in the grocery world is like a minnow in the ocean. 

Kroger’s Main and Vine brand began experimenting with meal kits when it opened and continues to experiment, with pricing, packaging, and portion size.  At as we write this it is our belief that that particular teat brand store continues to do so.  From what they have learned they are now testing meal kits in four Cincinnati legacy Kroger units.

When we went a took a look we may have had more questions than answers.  Like does copycat positioning work better than differentiation with a twist?  We think Kroger believes that copycat positioning is best as their meal kits in the Cincinnati test are just like Home Chef,  Plated, HelloFresh, and other filled with premeasured ingredients, cooking instructions.

Our team at Foodservice Solutions® thinks Kroger could have done much better than copycat positioning.  Having conducted over 8,111 Grocerant ScoreCards our team understands with value attributes resonate with consumers in meal kits, and most all fresh prepared Ready-2-Eat and Heat-n-Eat food. 

While grocery stores can sell meal kits for less, cheaper is not always the best option according to our own Grocerant Guru®, Steven Johnson just because they do not have to pay for packaging and delivering products.  The problem is our Grocerant ScoreCards point out Price is not the issue.  

Food industry research icon and our friend Bonnie Riggs notes that a meal made from a kit costs $10 per person, while a meal from a grocery store cost of an average $ 4.  Thinking about grocery stores what business are they in? Meal Solutions, Menu Solutions, Cooking instructions, or are they in the copycat food business?

Retail food customers today can obtain fresh prepared meals, meal components, cook from scratch ingredients all of which can be mixed and match then bundled into a perfect customized family meal without going to a grocery store.  Consumers can by the fresh prepared components from Pinkies Liquor stores, furniture stores IKEA, clothing stores Ralph Lauren, club stores like Costco, Dollar store, Walgreens, and even restaurants the ilk of Corner Bakery, and Boston Market. Why buy from a copycat grocery store?  Not to worry the team at Foodservice Solutions® knows why a meal kit would sell if done right. Call us.

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Are Grocery Stores Big Money’s Big Mistake

Did big money do what it has always done that is drink out of the cup of compliancy? Today food consumers are eating out at restaurants less they are also cooking from scratch less at home than ever before.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® consumers are migrating to Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meal components at an accelerated rate.

According to commercial real-estate firm CoStar Group “Commercial square footage of retail food space per capita last year set a record, with 4.15 square feet of food retail per person.” That is nearly 30 times the amount of space allocated to groceries at major chains in 1950.

The simple fact is consumers are buying meals and food for takeout today at companies the ilk of IKEA, Eveytable, EatFitGo, Snap Kitchen, Boston Market, Wawa, Sheetz, and Dollar General.  Never before in America has so much retail square footage been devoted to selling food simply put there is just too much.

A massive build-out by retailers has left the country piled up with grocery shelves as consumers are shifting from big weekly shopping trips to more snacking and to-go meals. The mismatch has flattened retail sales and leaves the industry vulnerable to a wave of closures that some executives, bankers and industry experts think is coming soon.

While shopper loyalty to conventional grocery store chains lifted same-store sales for food retailers by at least 3% annually since 2013, that metric was flat in 2016 and is projected to remain static this year as competition grows, according to FactSet. “There’s only so much food we can buy,” said Suzanne Mulvee, director of research for CoStar.

European fresh food grocery retailers Aldi and Lidl are vying for U.S. market share, investing over $4.5 Billion combined in the US market over the next three years according to the team at Foodservice Solutions®. That will increase the retail footprint while elevating competition for share of stomach in all retail channels.

Change is in the air it is reported that Kroger, the nation’s largest traditional supermarket chain by stores and sales, is reducing its new-store openings this year to 55 from 100, a nearly billion-dollar drop in capital expenditures, and its chief financial officer, Michael Schlotman. All the while non-traditional meal and meal component grocerant niche retailers the ilk of Snap Kitchen, EatFitGo, Everytable just keep opening new units and expanding their reach.

Wal-Mart Stores has no other move but reposition to the middle of the grocery price range according to the team at Foodservice Solutions® as it plans additional cuts at will build 55 supercenters and smaller-format stores in its 2018 fiscal year, down from the 132 it opened in the 12-month period ending in January.

With drug stores ability to drive incremental food sales one has to question if the corner grocery store will become a drug store, as today food, beverages and other consumables account for about a third of transactions at drug stores nationwide.

Many legacy chain restaurants will continue to close units as will legacy grocery store chains and according to the team at Foodservice Solutions®.  Consumers will continue to migrate to new non-traditional points of fresh food distribution.  Is your company evolving fast enough?  Are you putting money into food retail that looks more like yesterday than tomorrow?

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