Mark Zuckerberg’s Lesson For Foodservice Executives?

In a recent Time profile by Lev Grossman December 15^th wrote of the social media juggernaut and Zuckerberg “Zuckerberg’s not-so-subtle message to Facebook employees: Don’t end up like Sun Microsystems”

“Facebook CEO Mark Zuckerberg has put a pretty hefty reminder for Facebook employees to keep striving for relevancy right outside the front door. An aging Sun Microsystems sign, on the back side of the Facebook sign, is a well-placed message to them.”

“Because of the limits of space and time, a lot of Silicon Valley companies don’t build new headquarters; they just take over the discarded offices of older firms, like hermit crabs. Facebook’s headquarters used to belong to Sun Microsystems, a onetime power-house of innovation that collapsed and was acquired by Oracle in 2009. When Facebook moved in, Zuckerberg made over the whole place, but he didn’t change the sign out front, he just turned it around and put Facebook on the other side. The old sign remains as a reminder of what happens when you take your eye off the ball.  Have your taken your eye off the ball?

Have you taken your Eye off the Ball?  What is Driving Restaurant Customer Migration?

Outside eyes can provide a clear answer. Excuses and justifications need to be put aside restaurant customer migration is Driven by the 65 Inch HDTV Syndrome Foodservice Solutions® Grocerant Guru™ Steven Johnson found:

Yes, 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.)

Non-Traditional Meal Occasions on the Rise

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.

Millennials Driving 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 is 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.

Foodservice Solutions® 5 P’s of Food Marketing Drive Success

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, stifling the brand while diminishing consumer relevance. The consumer is dynamic not static. Brands must be dynamic, evolving with the consumer. Four more 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.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy.  

www.FoodserviceSolutions.us  of Tacoma WA is the global leader in the Grocerant niche Contact: Steve@FoodserviceSolutions.us for a Grocerant Niche or Menu Scorecard