Overall restaurant customer migration is driven by the 65 Inch HDTV Syndrome according to Foodservice Solutions® Grocerant Guru Steven Johnson found that 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 and Heat-N-Eat fresh food options at a wide and growing array of outlets across almost every channel; including convenience stores, chain drug stores, restaurants, Liquor stores, grocery stores, club stores, vending and even more non-food retailers the ilk of Ikea.
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.
Foodservice Solutions® Grocerant Guru® noted in 1991 that 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.)
Trends in the Food Industry Point to an Increase in Non-Traditional Meal OccasionsOur own Grocerant Guru® found that 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 and that means every retailer.
You better start paying attention. Why should you care if Walgreens is selling fresh prepared Ready-2-Eat and Heat-N-Eat fresh food? 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?
It’s quite simple. 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 are Driving Change Spurring 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 Grocerant niche 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.
Even more important both Whole Foods and Trader Joe’s are leading with innovative products and package size that create value and have positioned each chain as a food shopping destination for meal FIVEcomponents 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 according recent consumer studies 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.
More bad news is on the way for legacy foodservice operators. 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® FIVE P’s are Driving Sales Success
Millennials continue to drive change as 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 your brand and reinforce consumer relevance restauranteurs and other legacy foodservice operators should be integrating Foodservice Solutions® FIVE P’s of Food Marketing.
Today, many 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 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 four walls.
Steven Johnson is the Grocerant Guru® at Tacoma, WA based www.FoodserviceSolutions.us with extensive experience as a multi-unit operator, marketing brand/product positioning expert, and Grocerant Niche development. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. For more visit http://www.linkedin.com/in/grocerant or twitter.com/grocerant Steve@FoodserviceSolutions.us