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.
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.
The 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 Grocerant niche fresh prepared food. Non-traditional avenues of distribution are growing, gobbling, and garnering market share while establishing new patterns of consumption, price points and customer loyalty.
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. Both Panera Bread and Corner Bakery 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.
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 leverage Foodservice Solutions® 5P’s of food marketing: Product, Packaging, Placement, Portability and Price.
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.FoodserviceSolutions.us , with extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking. Call 253-759-7869 or Email: Steve@FoodserviceSolutions.us Follow us at: Linkedin.com/in/grocerant or twitter.com/grocerant