Today 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 for a larger share of the customers
stomach.
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 Pappa
Murphy's are further examples of take and bake pizza
operators.)
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.
Consumers Like Today’s
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 www.FoodserviceSolution.us , 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 Contact:
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