What some restaurants missed the evolving consumer
Retail foodservice continues evolving with a strong focus on the consumer. At the intersection of the consumer, technology and retail food sales we find the grocerant niche creating and expanding points of quality food distribution. It’s at that intersection that Foodservice Solutions® Grocerant Guru identified one universal commonality driving consumers buying pattern changes. Johnson calls it “The 65 Inch HDTV Syndrome.
The grocerant niche is the result of the blurring line between restaurants, grocery stores, convenience stores, and drug stores all selling fresh prepared, portable, convenient meal solutions. Targeted at the time-starved consumer with Ready-2-Eat or Heat-N-Eat fresh prepared food components that are perceived “better for you”, and portioned for one or two. Consumers like the Convenient Meal Participation, Differentiation, Individualization / Family Customization that these retailers offer.
Restaurateurs need to be particularly mindful of developments within grocerant niche for they are driving the change within the price, value, service equilibrium in retail foodservice.
Others missed evolving marketing trends
It is at the intersection of the consumer, technology and The 5 P’s of Food Marketing: Product, Packaging, Placement, Portability, and Price that retail food sales competition is expanding. Driving ever greater Mix and Match bundled meal options and new points of distribution for consumers. Consumers love the on-the-go options in fact Zaget’s 2013 NYC Restaurant Survey found that in New York at-home meals surpassed dining out for the first time in 30 years.
Looking back, during the late Home Meal Replacement frenzy grocery stores, C-stores and restaurants all studied with excitement the successful developments of Phil Romano’s Eatzi’s. Eatzi’s is Where Phil turned the page from restaurateur to foodservice retailer and food merchant. Phil’s experiment was a smashing success. It was and remains consumer interactive, participatory with visceral authenticity recording sales of 17 Million a year at the original store. Now in NYC Eatley is Eatzi’s on steroids doing close to 60 Million a year in sales.
Legacy Home Meal Replacement focus quickly faded away in the Restaurant side of business. However in the Grocery, C-store and Drug Store sector it continued to be studied, tested, and implemented. Today the grocerant niche is the strategic path of choice for non-traditional food retailers, targeted at restaurant customers, profitable and expanding at an ever increasing pace.
Some simply discounted competitors
Wawa was once considered a convenience store now they view themselves as a restaurant with a focus of serving Fast Casual Food- - To Go. At Wawa customers are now finding What’s for Breakfast, What’s for Lunch and now what’s for Dinner. Sheetz once a convenience store now calls themselves a restaurant that sells gas. Sheetz Made To Order food is a hit with customers. Sheetz is successful contemporizing legacy C-store products with differentiation, customization and personalization. Consumer like the variety, 24 hour menu serving all day parts - all day long - a wide range of consumer meal and snacking needs. Sounds and acts like a restaurant doing all the right things.
Rutter’s is another convenience store in transition. Rutter’s understands the unique balance between palate, price, pleasure and the consumer’s drive for qualitative distinctive differentiated new messaging and Rutter’s is meeting that need set. The food value proposition equilibrium for the consumer today balances; better for you, flavor, and traditional products all blended into something with a twist. In industry speak, differentiated does not mean different to the consumer it means familiar. Rutter’s is an example of brand identity extending beyond consumer expectations within the traditional conveniences store sector. Too the consumer Rutter’s is a direct valued competitor within the QSR space.
Food Quality Never Takes a Step Back. The grocerant niche is driving new competitive points for food distribution which are a step above consumer expectation in most cases. Food quality never takes a step back, these evolving new points of fresh food will continue to improve over time increasing industry competitiveness. Dunkin Donuts, McDonalds, and Starbucks, here comes The C-store sector. When you look at the menu items offered by these legacy conveniences store operators it is clear to see that the grocerant niche is a platform that is creating equilibrium. In other words they are not discouraged or intimated by competition from any sector.
Warning when Non traditional retailers garner your customers something is not right
They understand that the grocerant niche is a result of the blurring of the line between restaurants, grocery stores, convenience stores, and drug stores all selling fresh prepared, portable convenient meal solutions. Targeted at the time-starved consumer with Ready-2-Eat or Heat-N-Eat fresh prepared food components that are “better for you”, portable and portioned for one or two. All of these operators want a larger share of the retail food market. They want to take share from the restaurants.
During Transformational period’s legacy industries are at times forced to expand at a pace unseen in decades. The grocerant niche is contributing too redefining the retail foodservice experience. The Ready-2-Eat & Heat-N-Eat fresh and prepared food niche is expanding rapidly within the grocery sector. Whole Foods is no longer Whole Paycheck but Whole Fresh Food Fast and consumers find that is “better for you”.
Whole Foods is driving customer frequency while building loyalty with Fresh prepared ready-2-eat and heat-N-eat better for you food. Whole Foods focus is on convenient meal participation, better for you differentiation, and individualization.
Safeway’s has integrated Mix and Match Meal Bundling marketing into daily and weekly iphone app’s and legacy print flyers. With a focus on Fresh Prepared Food, Safeway is leveraging The 5 P’s of Food Marketing: Product, Packaging, Placement, Portability and Price establishing contemporized consumer relevance. In what was once restaurant food space alone grocery stores, C-stores and Drug stores are now garnering consumer attention.
With powerful well Financed companies the ilk of Walgreens entering the fresh food space that is something no food retailer should dismiss as not my competitor. Walgreens with over 78 Billion in sales they can try and try again. Walgreens might just be the next Next Biggest Competitor in the retail food space.
It must be noted that Walgreen’s all but exited retail food service when they sold their last Wag’s restaurant. We all must remember at one time Walgreens was a tier one fresh food retail operator / restaurant. Ready-2-Eat and Heat-N-Eat fresh food runs deep in the legacy of Walgreens.
Walgreens Fresh with Duane Reade have 7,500+ retail outlets. Who is selling what in your back yard? With Walgreens entering the fresh food area again with meats, wraps, soups "and other on-the-go meal options, as well as convenient alternatives for tonight's family meal, it is clear that the future of fresh food retail leadership may be up in the air.
Consumers evolve they do not go backwards
Food Retailing Never Take a Step Backward. Consumers are dynamic not static always looking to save both time and money. The grocerant niche is propelling new quality points of fresh food distribution and competitors that are well financed. Today a home cooked meal is in large part assembled from fresh prepared meal components not cooked from scratch. Is your restaurant selling into that channel?
Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more on Steven Johnson and Foodservice Solutions® visit http://www.linkedin.com/in/grocerant or twitter.com/grocerant