It’s time to set the record straight as
the line
between restaurants and food retailers is growing ever thinner. Forced food
customer migration does not mean consumers are blurring the lines. According to
the latest Grocerant ScoreCards conducted by the team at Tacoma, WA based Foodservice Solutions® 94.2% of shoppers
would rather eat out at a restaurant than cook a meal at home from scratch.
Today, as
the fight for America's food dollars intensifies consumers are buying fresh
prepared Ready-2-Eat and Heat-N-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.
There is no worry about choice
overload in the grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food
sector. Consumers have embraced their new choices, continue to look for new
meal and meal component options, showing no signs of returning to the old ways
of cooking from scratch. This fight is taking place in what is called the grocerant niche. The battle for Share of Stomach is just beginning
disrupt every legacy sector of retail service.
Battle for Share of Stomach
Regular readers of this blog know that the Restaurant Industry
Is Not Known for Trying to Be Fastest to Market with an Ideation, Food, or Tech
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 to feed
one meal at a time in the restaurant while protecting and edifying the brand.
So, 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 dining independents
to a national chain of "Red Roof" Italian, then to
delivery -only outlets and now take-N-bake is garnering market share in the pizza sector. (Home
Made Pizza Company and Papa Murphy's are further examples of
taking and bake pizza operators.) The fact is now is the time to evolve or
simply fade away as consumer relevant food touchpoints have changed.
Trends in the Food Industry Point to an Increase in
Non-Traditional Meal Occasions both on the go and at home according to Steven
Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. At the intersection of the
consumer, freshly prepared food, and technology we find 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. 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 foodservice
for the past four years has been the Convenience store sector. The C-store sector's
growth in large part has been driven by freshly prepared food. Non-traditional
avenues of distribution are growing, gobbling market share while establishing
new patterns of consumption, price points, and customer loyalty.
The Shopper Is in Control 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 an identity that has helped 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.
Product, Packaging, Placement, Portability, and Price are the
FIVE P’s for food marketing today according to Johnson. 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, 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
Foodservice Solutions®, with extensive experience as a multi-unit restaurant operator,
consultant, brand/product positioning expert, and Keynote Speaker. Find him at:
LinkedIn or Foodservice Solutions® Home Page
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