Wednesday, November 30, 2016

Foodservice Solutions the Grocerant Niche is Driving Profitability

Back in the day, the mid-1980’s Home-meal Replacement / Solutions (RMS) was the talk of the retail foodservice industry. Many research companies and retailers dismissed RMS as it morphed from a sideshow to the main stage (Top of Mind) for consumer’s seeking convenience. Foodservice Solutions® Grocerant Guru® Steven Johnson did not dismiss RMS rather he define the evolution as the Grocerant niche. 

In fact Steven Johnson first warned restaurant industry in 1991 about the undercurrents change within the consumer mind-set.  Then in 1996 Johnson penned an Op-Ed article titled: Call Them Grocerants in August in both FoodService Director and Nation’s Restaurant News which highlighted undercurrents of food industry evolving consumer migration patterns.

What many legacy grocers failed to understand was the opportunity for fresh prepared food as a day-part meal opportunity / solution.  Most grocery retailers do not believe they are in the meals business. More important most grocery retailers did not want to be in the fresh prepared meal business then or now.  They wanted to be in ‘fill customers pantry’ business. The fill the pantry business has long since vanished as have many legacy grocery chains.

Grocery retailer’s mind-set in the 1980’s was Home Meal Replacement specifically in store fresh prepared food cost too much to produce, threw their labor out of line, created scheduling problems, and had too much wasted food. That same mind-set holds true today for many legacy grocery retailers today. Walk around most grocery stores today and you can see that they continue to try and make fresh prepared food into a CPG product.

Maybe that’s why most legacy grocery stores continue to struggle driving profitability with grocerant Ready-2-Eat and Heat-N-Eat fresh prepared food. Just look how Kroger stumbled with their new concept Main and Vine. Winn Dixie on the other hand opened a new customer focus fresh food focused new concept store to find incremental success and increased customer relevance. 

Legacy grocery retailers simply did not want to deal with fresh prepared food back in the day nor do they today. I guess that is why they cut corners, mass produced product that they call fresh, packaged it like it was a CPG brand, and let it sit on display or under heat lamps way to long. In short they blew it then and most are making the same mistake today. 

The pantry business is rapidly diminishing according to Foodservice Solutions® Grocerant Guru®. While category managers can quickly tell grocery retailers what is selling inside their stores, how to price it, and where to position it. Category managers have no idea where the customers went. Nor can they explain how start-up mail-order meal-kits companies in three years have annual sale of $1 billion a year. That is pantry disruptive growth, and a concern for legacy retailers.

In an era of consumer transparency category management tactics have fallen out of favor with consumers. Or as our Grocerant Guru® put’s it “the consumer is not stupid, they have figured out what retailers are doing and dislike any company trying to trick / fool customers into buying a product in the era of transparence legacy retailers utilizing such tactics will face customer rebellion.” Fresh prepared Ready-2-Eat and Heat-N-Eat food has the ‘hallo’ of ‘better for you’ from the consumer perspective and continues gaining momentum.

Consumers are dynamic not static, the Grocerant niche continues to grow around the world and our Grocerant Guru® has been leading the drive for top line sales and bottom line profits within the grocerant niche since 1991. 

Food manufactures are searching for new, fresh food opportunity and that is something Foodservice Solutions® continues to excel at. Foodservice Solutions® Grocerant Guru® as regular readers of this blog know has repeatedly stated that “consumers never take step back in food quality or freshness”. The food retail industry today is no longer at a crossroad. The consumer has moved. It’s simply a question within the legacy grocery retailers if they want to move forward with consumer or not.

Back in the day it used to be restaurant chefs were the industry tastemakers and retail eventually playing copy-cat caught up with the trends. Today many tastemakers come from Grocerant niche retailers. Yes, the times they are a changing. 

Driven by increased demand and customer migration from cook from scratch to Ready-2-Eat and Heat-N-Eat fresh prepared food everyone from Soccer Mom’s to Senior Citizens are putting pressure on retailers for fresh prepared food. All retailers are in a fierce battle to garner a larger share of stomach and the battle for customers is taking place within the grocerant nice Ready-2-Eat and Heat-N-Eat fresh prepared food space.

Grocery stores are now playing catch-up with the fast expanding Convenience store sector that is focusing on Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food. Companies the ilk of Wawa, Sheetz, and Rutter’s Farm Stores all are finding success with fresh prepared food. Overall convenience stores are doing a better job within the grocerant niche than legacy grocery stores according to our Grocerant Guru®.

Seemingly trapped in footprint malaise traditional grocery retailers are closing stores, capitulating market share. Success does leave clues and legacy food retailers must adopt a new view, and new business model, the Grocerant model. Foodservice Solutions® can help any retailer looking to drive top line sales and bottom line profits within the Grocerant sector. specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities for your product or your brand. Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche since 1991 Contact:

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