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 i s restaurant
quality and priced less than Panera Bread or Corner Bakery CAFE. Both Panera Bread and Corner Bakery CAFE 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 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 ortwitter.com/grocerant
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