Foodservice Customer Migration Gaining Momentum

Foodservice Solutions® Grocerant Guru® believes that “food quality never takes a step backwards” in the minds-eye of the consumer. In fact it is the consumer that is driving the tremendous growth within the grocerant niche where consumers are seeking Ready-2-Eat and Heat-N-Eat fresh prepared food. 

Our Grocerant Guru® recently stated “fresh prepared food trumps, local food products, and local food trumps organic food in the minds-eye of the consumer.  So, Where are consumers migrating from or too?  There have been many claims made that spending on food away from home in Restaurants is now greater than that at home, i.e. through Supermarkets and Alternative Formats such as Supercenters and Warehouse Clubs the fact is that simply is not true. 

The Bureau of Labor Statistics, U.S. Department of Labor expenditure research data found that “Food At Home spending is 42% greater than that of Food Away from Home, and - as of 2014 - accounted for 59% of all spending on Food.”

In addition between 2007 and 2014, Food At Home expenditures grew by 15%....versus only +5% for Food Away From Home.  This has obviously been due to the belt-tightening produced by the Great Recession.  What is important where are the customers migrating from and where are they going. 

First they are migrating from traditional grocery store sector and the restaurant sector.  Within the restaurant sector the full-service dinning niche, casual dining niche have seen the most customer migration. Price and time have been key drivers of the migration according to Foodservice Solution® team. Consumers buy food from every outlet they can find, don't be fooled into thinking they only eat at your for or buy from your restaurant or retail outlet.  Today, there is a battle for share of stomach.

On the grocery sector the key drives have been the unwillingness to adapt to the new customer shopping focus “meals” specifically Ready-2-Eat and Heat-N-Eat fresh prepared food according to Steven Johnson, our Grocerant Guru®.   Johnson points out that “most traditional grocery stores jumped on the HMR bandwagon in the 1980’s only to miss the opportunity because they focused on costs and did not understanding the customer and/or foodservice. Grocers fail to understand the opportunity for day-part meal opportunity solutions because they aren't really in the meals business, have never been and don’t want to be in the meal business.”

On the other hand warehouse club stores the ilk of Costco have jumped on the Ready-2-Eat and Heat-N-Eat fresh prepared food niche and have garnered customers while increasing traffic.  Online retailers today have new business models that bypass the grocery store altogether companies the ilk of Platted, HelloFresh, Duane Reade, and AmazonFresh.  

These new and evolving business models are driving customer adoption and creating increased customer migration from restaurant and traditional grocery stores.  What each is new company seems to understand is that today consumers like Eating-Out while Eating-In according to Johnson.

Convenience stores have been the retailer which has been the most aggressive expanding fresh food offerings, locations, and increasing brand messaging. C-stores have re-invented themselves putting increased pressure on restaurants, grocery stores.  They have successfully garnered new customers contributing to a growth in foodservice customer migration.

When looking at the restaurant sector it is very important to note that within the Chain restaurant sector sales for Take-Out, Take-Away, fresh food for immediate consumption, 57.8% of all chain food sold!  That’s a big number!   That number includes QSR drive-thru and take out sales as well.  No matter it is a very large number. There can be no doubt that Eating-Out while Eating-In is a very big force in retail foodservice today. 

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities. The Grocerant niche is about convenient meal participation, differentiation and individualization  visit: www.FoodserviceSolutions.us or Email: Steve@FoodserviceSolutions.us