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 outlets across almost every channel:
convenience stores, chain drug stores, restaurants, grocery stores, club
stores, vending and even more non-food retailers like dollar stores. 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 fight is taking place in what is called the grocerant niche.
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.
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 pizza sector. (Note: Home
Made Pizza Company and Papa
Murphy's are further examples of take and bake
pizza operators.)
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 you care if Walgreens is selling
fresh prepared ready-2-eat and made-2-order sandwiches? 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
Shopper is in Control Spurring New Retail Food Formats
Trader Joe's and Whole Foods have created
ready-2-eat and heat-N-eat fresh prepared food items with qualitative
differentiation as an entity with identity that has help propel them into
ready-2-eat fresh prepared food leadership. In fact recent research shows that
both Trader Joe's and Whole Foods are each known for high quality (restaurant
quality) ready-2-eat and heat-N-eat foods with distinctive offerings. More
important each is leading with innovative products and package size that create
value and have positioned each chain as a food shopping destination for
meal components customized and personalized for immediate consumption or mix
and matched for a meal time at home. In short they are stealing your customers.
Walgreens
fresh prepared food is restaurant quality and priced less than
Panera Bread or Corner Bakery Cafe. Both Panera
Bread and Corner Bakery Café thrive in urban locations.
Walgreens is now growing price, quality and speed of service advantages over
legacy retailers. Legacy restaurant chains must reconsider the speed at which
they evolve and adapt or non-traditional outlets will capture profits margins
as well.
Traditional views of meals and mealtime can
pretty much be discarded. Legacy retailers waiting for the "next big
thing" to copy simply might be out of luck this time. Legacy food
retailers may not like to be first movers very much but it may prove that
waiting too long will not work this time.
Product,
Packaging, Placement, Portability and Price
The retail food world is evolving at an
ever increasing pace filled with innovation in food, portion size, points of
distribution, and quality fresh prepared meal solutions. The price, value,
service equilibrium is resetting in retail foodservice. In order to edify the
brand and reinforce consumer relevance restaurateurs must leverage Foodservice
Solutions® 5P's of food marketing.
Many legacy food retailers continue to
practice brand protectionism, stifle the brand while diminishing consumer
relevance. The consumer is dynamic not static. Brands must be dynamic, evolving
with the consumer. Four more years of watching other retail sectors thrive
should be long enough. Success in the restaurant world is no longer simply
about what happens within your 4 walls.
Steven
Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions®, with
extensive experience as a multi-unit restaurant operator, consultant, brand /
product positioning expert and public speaking. Facebook.com/Steven
Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant
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