In 2023 Your Consumer Behavior Changed You Need to Change as Well

 

Consumers are dynamic not static and you must evolve as fast as your consumers or your food retail company will lose customer relevance according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

If you are not focused at the intersection consumers, evolving food path to purchase, you are most likely missing out.  This year regular readers of this blog know that consumers are cutting back and changing their purchase priorities as economic pressures increase.

It is at the intersection the combination of rising prices, increased costs of living and ongoing social discontent prompted by the never-ending threats of the tri-demic (flu, COVID-19, RSV) has resulted in financial problems for many consumers. The consumer price index hit 9% in June, a level unseen since the early 1980s, an era before such industry sectors as fast casual and before chains like Chipotle Mexican Grill were even a dream. Gas prices over the summer hit an average of $5 a gallon, a record. The level of inflation influenced consumer behavior and challenged operators, almost none of whom had experienced an operating environment quite like it.

Restaurants raised menu prices at record levels and, even as inflation eased into November, were still raising prices at an 8.5% clip. Yet, with their own costs for food, paper and wages up in the double digits, their margins still thinned.

As a result, consumers are growing thriftier and changing their behavior, according to NielsenIQ. Here are industry insights NielsenIQ identified as five key trends that may well last into 2023:

1.       Change in priorities — Consumers are adjusting their spending habits and lifestyle behaviors in response to increased pressure on household budgets and ongoing concerns regarding a recession. Additionally, pandemic-prompted social disruption has pushed consumers to make mental and physical health their top priorities. Financial security is another important factor, which results in more restricted spending.

2.       Reduced discretionary spending — At the start of 2022, consumers surveyed by NielsenIQ planned to cut back on mini-splurges like dining out, gym memberships and away-from-home entertainment, focusing instead on the day-to-day essentials and prioritizing basic needs and necessities like utilities and groceries. These consumers plan to further tighten their belts as inflationary pressures continue to increase, resulting in greater cutbacks on food deliveries and other indulgences that they can instead enjoy at home.

The last time a significant decline in discretionary spending occurred was in 2020 during the initial months of the pandemic. Economic uncertainty is again causing consumers to adjust their behaviors across all aspects of life, from shopping to entertainment to maintaining a healthy lifestyle.

3.       Staying at home — Lifestyle trends that increased in popularity during the pandemic are again rising in favor. These include food preparation and dining at home (cited by 44 percent of surveyed consumers), spending less on clothes and grooming (37 percent) and cutting back on treats like dining out (34 percent) and vacations (24 percent).

4.       Selective shopping — In addition to being more mindful of how much they spend and what to prioritize, consumers are shopping differently. They intend to combat inflation by embracing a selective mindset.

Accordingly, many consumers are switching to buying lower-quality items and shopping more often at discount stores or traditional trade outlets. Brand loyalty has lessened, with 31 percent of consumers admitting to buying whatever is promoted; 27 percent buy whatever is cheapest; and 26 percent stop purchasing certain categories entirely.

This selective shopping is popular with all consumers who have been financially impacted by the pandemic and other economic factors, including those with high incomes who have not been strongly affected. Shoppers across the economic divide are seeking out discounts and promotional opportunities across multiple shopping channels and retail stores.

5.       Private label preferences — Private label brands have a stronger opportunity as consumers shift their loyalties and make trade-offs. Alternate products that offer quality at a lower price provide greater appeal, with 20 percent of consumers saying they will opt for a private label to help manage their grocery expenses. In the United States, private label growth is prevalent in categories such as baking goods, health and beauty, dairy, household products and deli foods.

As consumers seek ways to cut back on spending while saving for the future, retailers and suppliers will have opportunities to manage pricing across portfolios as they seek to retain customers.

When asked how they would prefer manufacturers deal with rising prices, 27 percent of consumers said they would rather see bulk or economy size offerings vs. smaller sizes (8 percent) because it helps them deal with inflation. Other consumers seek to minimize waste (40 percent). These lifestyle changes and shifts in shopping behavior could become more pronounced across consumer segments if the cost-of-living continues to rise.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Plant-based Food & Beverage Drive Customer Trial Adoption

 

Plant based food and beverages have moved from fad to mainstream during the past three years with Gen Z and Millennials leading the way asking for more and more products in more and more categories according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

In a new report by Acosta they found, “Forty percent of today's shoppers buy plant-based meat and/or dairy products, citing health as a key motivating factor, according to "Plant-Based Eating: Trend or Fad?" Acosta's new research report. The report explores consumers' increased interest in purchasing plant-based meat and dairy alternatives.

Kathy Risch, senior vice president, business intelligence at Acosta, noted, "Consumers' focus on healthy living increased significantly since the onset of COVID-19," said. "Larger conversations about the importance of health and wellness have alerted many consumers to the potential long-term benefits of meat and dairy alternatives, and plant-based product sales are rising as a result. 

Bloomberg reported $7 billion dollars in plant-based sales in 2021, a 27-percent increase from 2019. We expect to see steady growth in this category through the next decade, as consumer awareness continues to expand."

It is important to note that Acosta's research provides insight surrounding consumers' increased interest in plant-based products. According to Acosta's research, 40 percent of consumers surveyed in March 2022 purchased plant-based meat and/or dairy products within the last six months, with more than half of those surveyed (60 percent) purchasing plant-based products several times a month.

In addition, 77 percent of consumers surveyed buy plant-based foods at traditional grocery stores, while 20 percent of consumers surveyed buy plant-based foods online. Consumers typically buy plant-based meat and dairy alternatives to replace beef, pork and traditional milk, Acosta concluded.

There is more, Acosta also revealed that 64 percent of plant-based buyers purchase within this category at least several times a month, while 57 percent of plant-based buyers say they intend to consume plant-based alternatives throughout their lives. Nearly 20 percent of plant-based buyers say they follow a fully plant-based lifestyle. Today customer relevance can be driven by plant-based menu items.

Just like the old days, while half of plant-based buyers claim it is important for restaurants to offer plant-based options, only about 20 percent usually buy these alternatives when eating out. About one-third of all U.S. shoppers claim to perceive plant-based foods as a fad, despite growing interest and demand.

Acosta's "Plant-Based Eating: Trend or Fad?" report was gathered via online surveys using the company's proprietary Shopper Community from March 8 to 11. For more visit Acosta.

There is an increased demand for healthy, plant-based and international flavor options will also require a larger footprint and dedicated resources. Fresh food commissaries and ghost kitchens will become the norm.

If there is a need for a brick-n-mortar unit, new store designs with sit-and-eat options will emerge to support the customer experience. Bright, clean and updated store exteriors with outdoor seating options, takeout window, and enhanced curb appeal will also attract customers and encourage them to spend more time on-site.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

Breakfast Daypart Deluge: A Virtual Restaurant Happy Hour

 

Who want to cook and do breakfast dishes before they head to work? Not many in the United States according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. Hand held food for immediate consumption that is ‘deemed’ better-for-you’ has reached the breakfast mid-set of consumers according to Johnson. Are you competing for a larger share of stomach?

Competing for a larger share of stomach, companies the ilk of Nextbite, a leader in virtual restaurants are steaking a claim for a larger share of breakfast. According to a new survey hosted by Nextbite Forty-five percent of consumers ranked breakfast sandwiches as one of their favorite breakfast items.  So, Nexbite conducted the survey in conjunction with National Breakfast Day (September 26).

1.       The survey found 24% of consumers rated breakfast sandwiches as their favorite breakfast food item,

2.       With 21% choosing it as their second favorite breakfast selection. 

3.       Delivery for breakfast is also about to get a boost, as 39% of consumers order breakfast for delivery at least once a month.

So, let’s look at what consumers like to eat that was found in the survey. In addition to breakfast sandwiches, other top breakfast favorites include pancakes/waffles/french toast (18%), cooked eggs (14%) and breakfast burritos (11%).  While men are more likely (44%) than women (37%) to order breakfast at least once a month, women (14%) are more likely than men (11%) to indicate that breakfast is their favorite meal of the day.  And, 18% of respondents indicated they are ordering breakfast for delivery more often.

Get this, consumers aren’t just eating breakfast in the morning any more.  Twenty percent of men surveyed order breakfast for an afternoon snack once a week or more, and 26% of dinners include traditional breakfast items.

This is important, according to the survey, the top reasons consumers order breakfast for delivery are food quality (19%), convenience (17%) and taste (17%).  The survey also revealed that consumers order breakfast for delivery more during the week (37%) than on the weekend (20%).

Remember that Nextbite is a virtual restaurant, branded empowering consumer choice. For National Breakfast Day, Nextbite launched a special promotion (Sept. 24-26) enabling consumers to buy one item and get one free on all the delivery apps for its breakfast menu items --Crack’t and Hatch House breakfast sandwiches along with the Huevorito breakfast burrito.

Alex Canter, CEO of Nextbite, stated, “People are looking for variety and quality in their delivery breakfast choices,”  “Our new Crack’t and HatchHouse concepts give consumers a range of options, from delectable brunch-inspired specialties to exciting new twists on the ever-popular breakfast sandwich and breakfast burrito. The convenience of breakfast delivery makes it even better for busy workers and students.”

Available to consumers through Nextbite restaurant partners, the new Nextbite delivery-only breakfast options include: Hatch House classic breakfast sandwiches with a gourmet touch; Crack’t amped up breakfast “sammies”; and HuevoRito authentic breakfast burritos with eggs, potatoes, meats, veggies and cheese. HuevoRito also includes a hearty vegan option.

Consumers can order Nextbite’s new breakfast menu items through delivery services such as Uber Eats, DoorDash, Postmates and Grubhub. Nextbite partners with restaurants to offer these delivery-only menu items.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

Wendy's Breakfast More Talk than Chalk

Chalk one up for the home team is an old adage we have all heard.  Touting the success of a new limited time offer or menu item is not the same as touting the success of an entire daypart; according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Marketing messaging, total unit sales, and profitability have to go hand in hand. It is still an open question to some Franchisee’s if reentering the AM daypart for the third try will be sustainable over time. Not to worry, The Wendy’s Co., has not given up in a sign that expanding messaging is still needed, new meal deal promotion began recently with a bus-stop giveaway in Providence, R.I., that was aimed at building awareness according to the company.

The bus stop pop-up in Providence’s Kennedy Plaza is just part of the company’s $15 million effort this year to get Wendy’s consumer’s’ to think Wendy’s breakfast first. Since price matters for all dayparts, they added a new systemwide meal deal of two select breakfast sandwiches — a choice of Sausage, Egg and Swiss Croissant; Bacon, Egg and Swiss Croissant; or Honey Butter Chicken Biscuit — for $4 through early August.

Todd Penegor, Wendy’s CEO, in May’s first-quarter earnings call, said breakfast awareness was “a trial game.” This third trial of the AM daypart is costly for franchisee hard pressed to find enough workers as it is according to Johnson.

Not only do the Wendy’s franchissee have to battle Burger King, McDonalds, 7-Eleven, Wawa, they have to battle Dunkin Donuts in the Northeast for share of stomach.  The company said the July 14 pop-up giveaway was “part of a larger competitive breakfast takeover in the Providence market, dubbed #DitchTheDonut.” The promotion included bus-cling and billboard advertising and a sweepstakes at Instagram’s @DitchTheDonutSweeps through Aug. 13. The sweepstakes award of “breakfast for a year” will be in the form of $550 in Wendy's gift cards.

Battle for Share of Stomach

That battle for share of stomach will require both time and money according to Johnson. Penegor said on that call,  “What we need to do is continue to get folks to come in and try our food,”. “

Penegor, continued “We’ve got to continue to create awareness to bounce those folks back from lunch and dinner into breakfast, which then drives incrementality to our business, because it’s another visit, another frequency that gets picked up along the way,”

“Awareness leads to trial,” he said. “Trial leads to repeat trial, and the repeat leads to growth.”

At the intersection of franchisee profits and brand messaging the consumer will be both the judge and jury deciding if the third try at breakfast for Wendy’s will work or not?  What do you think?

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869 

Dollar General Fresh Food will Drive Customer Frequency

The Dollar store sector had been garnering customers from grocery stores for so long that today many consumers when they think about grocery shopping they think Dollar General first according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

It appears as if is as easy a taking candy from a baby according to Johnson.  The Dollar store sector continues to expand fresh food offering and legacy grocery store are have closed over 51% of their legacy grocery stores over the past 12 years. Kind of makes you realize that doing the same thing the same way may not be in the best interest of a grocery brand. Doesn’t it.

With over 16,000 stores open, Dollar General strives to capture more consumer grocery spending, by adding more and more fresh produce. When Dollar General announced that it offers a “curated assortment of produce” in about 650 of its more than 16,000 locations it made you wonder how long can grocery stores continue not to evolve.

Dollar General’s renewed focus on fresh fruits and vegetables stems from the retailer’s broader efforts to expand its grocery selections. When you look around in new or remodeled Dollar General stores you will find beside the fresh fruit and produce lots of grocerant niche Ready-2-Eat or Heat-N-Eat food portioned and priced to garner grocery store customers.

Dollar General this year plans to add fresh produce selections to 400 stores across the country, “up from a previous goal of about 250 stores, bringing the total number of stores with produce to more than 1,000 by year-end,” said chief operating officer Jeff Owen in March during the fourth-quarter financial report conference call with analysts. “We are also accelerating the expansion of our fresh produce offering, which provides the Top 20 items typically sold in traditional grocery stores and covers approximately 80% of the overall categories they carry,” he said.

The consumer is dynamic not static. Dollar General understands that and continues to drive customer frequency with new offerings.  Differentiation does not mean different it means familiar but with a twist. Dollar General has a twist a combination of fresh, fast, food priced for today’s consumers.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company 253-759-7869. 

Wendy’s Waves Customers Welcome

Limited time offers (LTO’s) are a great way for food brands to extend a welcome to consumers and stimulate sales.  However, when you add an LTO with the word FREE the branded invitation welcome mat is greatly enlarged according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

You don’t hear the words bacon and free very often.  This week Wendy’s has distinguished itself by creating a point of differentiation win the battle for share of stomach by offering free ‘baconator fries’.  

So you can now bring home the bacon with Wendy’s latest offer “free Baconator Fries daily with an in-restaurant purchase through Wendy’s mobile app, available now through February 17. The free Baconator Fries with purchase offer will refresh daily within the app, because a day without Baconator Fries is a day wasted.” 

The team at Wendy’s says “of course, the only fries worthy of the Baconator name are made with natural-cut, skin-on, sea-salted fries topped with warm, creamy cheese sauce, shredded cheddar, and crispy Applewood smoked bacon.” How do you plan to expand your brand messaging?

Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information

Battle for Share of Stomach

Rutter's Menu Innovation Edifies Local

Success does leave clues and Rutter’s understands innovation does not mean something completely new or different it means something familiar something local something liked by current customers according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Rutter's has include two local favorites to its menu: Pork Belly and Pepperoni "Roni" Rolls. Pork Belly rolled out across the York-based convenience store retailer's menu on Wednesday and is available as an additional topping for items including burgers, sandwiches, and mac & cheese, in addition to a standalone sandwich, sub or wrap. It will be featured on Rutter's menu exclusively for two months.

Keeping the flavor profile local Rutter’s Pork Belly is supplied from local vendor Garrett Valley in Swedesboro, N.J. According to Rutter's, it is the only c-store chain in the country to initially have this item.

Rutter's partnered with another local vendor, Mom's Wholesale Foods in New Castle, Pa., to introduce Roni Rolls. The menu addition is soft, Italian dough stuffed with pepperoni and mozzarella cheese, and topped with cheese.

Rutter's focuses on local manufacturers and suppliers to help it bring high-quality ingredients to customers. The c-store retailer describes local food items as products that come from producers/manufacturers within a 100-mile radius from its corporate office, or in the state of Pennsylvania, Rutter's Director of Foodservice Ryan Krebs noted.

Success does leave clues Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant/ or twitter.com/grocerant