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.
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.
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. Both
Panera Bread and Corner bakery 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.
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 leverage Foodservice
Solutions® 5P’s of food marketing: Product, Packaging, Placement,
Portability and Price.
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.
www.FoodserviceSolutions.us since 1991 is a global retail food consultancy based in Tacoma, WA has
been the global leader in the Grocerant Niche, Mix and Match Meal Component
Bundling Ideations. Follow us at: http://www.linkedin.com/in/grocerant, twitter.com/grocerant
or Facebook Steven Johnson Contact: Steve@FoodserviceSolutions.us
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