Back
in the day the old adage was ‘follow the smart money’ and you will find
success. Foodservice Solutions® team has been inundated with queries from chain
restaurant operators and technology companies on the undercurrents and sea
change in consumer acceptance, adoption of non-traditional fresh food outlets,
and the role of technology-marketing-messaging.
In
an Omni-channel cross-channel retail world simply doing what you have always
done and doing it the same way does not work. Why are they calling us? Simple we sold, placed the first 7 restaurant
national accounts for On-line ordering in 1991 and continue working with
innovating companies and products.
Today,
the ‘smart money’ is focused on consumers and fresh prepared Ready-2-Eat and
Heat-N-Eat Grocerant Niche food. Once again Foodservice Solutions® is at the center
of the action having identified, quantified, and qualified the fastest growing
sector of all retail foodservice the Grocerant Niche filled with Ready-2-Eat and Heat-N-Eat fresh
prepared food. So just what is ‘Smart Money’ today?
Here
is how Taylor Soper of GeekWire
explains smart money today: “Back in 2011, when Scott Stanford and Shervin Pishevar led separate
investments in Uber’s $37 million Series B round back in 2011, fellow investors
and other friends scoffed .“Why are you guys investing in a limo company?”
the naysayers asked… Today Uber is now operating in 128 cities
and valued at $18 billion, Stanford and Pishevar went on to start
a venture capital firm called Sherpa Ventures.
One of their first big bets was a $28 million Series B round that Sherpa led in
a San Francisco-based food delivery startup called Munchery.”
Munchery
makes the meals themselves and delivers them within in one hour. There is an ever increasing number of ‘smart
money’ venture-backed startups the ilk of
Munchery, which is now at $40
million raised; Caviar, $15 million raised; Spoonrocket,
$13.5 million raised all are similar to Uber and Lyft in that they’re
using technology to improve a service that restaurants have not used or
refuse to try. Regular readers of this
blog know we highlighted our 20-20 that’s 20 technology companies plus in the
last year and 20 non-traditional fresh food retailers alone. The fresh food
marketplace is evolving fast.
Now $28 Million would build how many Papa Murphy’s? How many Chipotle’s? How may Smashburger’s? In an Omni-channel cross-channel retail world
the questions becomes: Why build a restaurant? Why hire, train, and maintain a
staff when technology can edify the experience for less and do it faster?
Note:
(Its simple consumers like restaurants they are not going away. However don’t
get me wrong they will diminish in numbers, volume per unit, and value. They
will look much different in the future,
they will smaller but they be here.)
Technology Once a Friend of Restaurants Now a
Foe
Sherpa
Ventures co-founder Scott Stanford said “When you introduce something like
Uber or Munchery, you change the paradigm with not only how that service
or product is consumed, but how it is provided,”…. “If you can change the
underlying economics of that delivery platform or that value chain, it puts you
in a really interesting position from a financial perspective.”
When
Red Lobster opens a new restaurant in 2014 they do it very much the same way
they did 46 years ago? Sure an up-dated
menu, décor, and messaging but the business model has not been updated. Red
Lobster and maybe your company’s business model might just look more like
yesterday’s business model than tomorrow’s business model. Legacy hedge funds
are buying into companies the ilk of Bennigans, Sbarro, and Taco Del Mar all
are here. Are these companies the past, present, or future of Food Retail?
Soper went on to say “Similar to how Uber and
Lyft let consumers hail a ride by pushing a few buttons on their smartphones,
Munchery and others are doing the same for food delivery. It’s part of a
growing trend of companies that, thanks to smartphone technology, are
providing efficient and innovative on-demand services. “Consumer
expectation has changed as a result of greater connectivity,” Stanford said.
“When you think about what the Internet did to media and changed consumer
expectation and requirements, the same thing is happening to commerce.”
Foodservice Solutions® Grocerant
Guru™ believes that companies the
ilk of Lish, Peached, Spoonrocket, and Munchery will not only survive they with
thrive for they provide “authenticity in being local, personal, while providing
fast service.” There is a new retail food
business model unfolding today that model is mobile; it is creating
disequilibrium for restaurateurs and reorganization or bankruptcy for
others.
Consumer adoption of mobile and non-traditional
retail food platforms has created discontinuity for Chevy’s Fresh Mex, Buffets, Round Table Pizza, Fuddruckers and Red Lobster
to name but a few.
The
Informational Superhighway is fast becoming a Mobile Neighborhood
Lish CEO Aakhil Fardeen stated: “Customers care
about having a variety of the highest quality food, timely delivery, and a
delightful ordering experience at an affordable price,” “Chefs also get really
excited about the opportunity that Lish offers them. It gives them an avenue to
make extra money — about two or three times what a restaurant job pays them per
hour. They love the ability to get direct customer exposure, develop a
following, and ultimately to build their brand in the community.”
Are restaurants dead no, they are however
becoming very expensive to own and operate. Red Lobster is but one example. Yesterday’s
business model is not the future of the restaurant business. Opening the same
restaurant brand the same way you did 40 years ago does not work. Companies the ilk of Starbucks
that have evolved from coffee house to food merchant have consumer relevance
and have successfully evolved with technology as well.
The food space is exciting it is dynamic not
static. The food sector is a market that
is huge and too large to be consider just one market place for sure. The ‘smart
money’ is today focusing on technology to bring customized, personalized, fresh
prepared food to you for less. There are companies targeting the high-end,
middle, low-end markets, each offering staples the ilk of Burgers, Pizza,
Mexican, Sushi, Thai, Chinese, and Italian
to name but a few.
This is becoming a land grab for share of
stomach without the cost of the land.
Think about it Americans spend $151 on food each week. With
technology today consumers never have to leave home, or work and can eat with
or without cooking, or doing the dishes. Does your restaurant have ‘braggability’? Without braggability why would anyone come to
your restaurant? Do you know how to create ‘braggability? We Do.
From
Hand Held Food to Hand Held Food Ordering
“The takeout and delivery market today is
estimated to between $70-to-$100 billion today, and a small fraction of these
orders happen online today even fewer on mobile devise. ‘Smart Money’ is considering how frequently
people purchase food and how technology can improve the way people get food,
you start realizing why entrepreneurs and investors are simply funneling
money into the Grocerant Niche opportunity.
In our Omni-channel retail world there can and
will be many winners particularly in the food space. The competitive force driving change
/adoption today is the consumer. The
retailers that succeed with have a blended balance of efficient technology, fresh
flavorful food, and the ability to deliver that food to your office or home in
minutes, not hours or days and an integrated brand marketing messaging with
relevance.
Restaurant
Customer Migration Can Be Stopped
Starbucks
and Chipotle each do three things better than almost any other company they
continue to evolve with smaller units, faster service, maintain authenticity. Has your company completed one of Foodservice
Solutions® Grocerant Niche Assessments or a Grocerant Scorecard?
Are
you trapped doing what you have always done and doing it the same way? Interested
in learning how Foodservice Solutions 5P’s of Food Marketing 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.
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