Grocerant Fresh Food Fuels Dinner Debate and Disruption

Success does leave clues and how and where consumers obtain dinner is a key driver of grocerant niche growth and foodservice channel migration according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The Debate

Cook dinner, eat at a restaurant, pick-up a prepared meal and take it home, or order a meal or meal components delivered. At noon there are 80.3% of consumers that do not know what’s for dinner.  The simple fact according to Foodservice Solutions® Grocerant ScoreCards is in 2018 at 4 PM 64.9% of consumers do not know what they are going to have for dinner. 

The undercurrents of demographic change continue to drive the uncertainty according to Johnson fully 47.0% of Americans over the age of 18 are single and the need to cooking from scratch and planning for them is simply not top-of-mind.  In fact fast our 2018 ScoreCards indicate that for singles fully 76.2% top choice is ‘where to pick up dinner’.

The Choice Cook or Up-Pick-Up Meal Components

Consumers today have a plethora of choices for when it comes to dinner.  Traditionally consumers would buy food at a grocery store and cook from scratch but that was 1950-1970 and then the undercurrents of change began with an abundance of great restaurant choice and increasing fresh prepared food options at grocery stores, drug stores, and convenience stores. All driven by increasing time constraints on consumers combined with an increased lack of cooking skill set for new international flavor profiles consumers have become accustom.

Recent internal research by Albertsons revealed that 80% of its customers say they want meal kits in stores, according to Pat Brown, the chain’s vice president of strategic business initiatives, in an interview with CNBC. He also said that 85% of online meal subscribers want an in-store option. Albertsons bought meal kit pioneer Plated last fall and is currently rolling the line out to stores nationwide.

Hello fresh has followed suit and is now offering its meal kits at 581 Giant Food Stop & Shop grocery stores.  Johnson reminds us that those meal kits are for customers that want to cook at home and do dishes.  It’s important to note that those meal kits in grocery stores are competing with the service deli where rotisserie chicken and many other fresh prepared meal components are being sold and many are being sold for less than the cost of the meal kit.   

Bain & Co. estimates meal kit sales are “$1.5 billion annually” our Grocerant Guru® reminds us that number is like a cup of water in the Pacific Ocean. Nielsen states that meal kit spending is growing ‘more than three times as fast as other channels’ which might be more important number.

Restaurants & C-stores

Remember that 47.0% of all Americans over the age of 18 are single and restaurants and fast food drive thru restaurants specifically offer fast fresh food fast that is portable and priced very competitively has become a compelling option for what’s for dinner. Fast casual restaurants along with full service restaurants are increasingly offing delivery, pick-up or third party food delivery to compete with the drive-thru.  

The National Association of Convenience stores as regular readers of this blog know has tested their own meal kits in stores. C-stores have a decided advantage to restaurants and grocery stores according to Foodservice Solutions® Grocerant ScoreCards.  That advantage identified by 81.9% of respondents was the ability to mix & match meal components. Speed of service was second with 73.5% of consumers saying it was faster than either a restaurant or a grocery store.

Food Manufacturing Conundrum

Manufactures the ilk of Kraft-Hines, Campbell’s Soup, Tyson, Smucker’s, General Mills, and Unilever all must rethink how they are selling food.  Rethink where food is being bought? Most important food manufactures must reinvest in who is today’s consumers. Food manufactures must ask themselves do our products look more like yesterday than tomorrow.

So just what is your New Electricity? Success does leave clues www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us

Grocery Shopping Take’s too Long

The retail food shopping experience is evolving faster than many legacy CPG manufactures; grocery retailers can even begin to image according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Once top of mind for consumers were brands the ilk Hunts, Kraft Heinz , and Campbell’s Soup today consumers want fresh meal components and are migrating to retailers with fresh food they can buy fast.

In search to speed up the grocery shopping experience consumers have come to rely on digital channels and now expect online access in their path to purchase, a study by consumer target marketing firm SKUlocal found.

Forty-three percent of shoppers have subscribed to receive home delivery of grocery products, and 47% have done so for beauty and personal care products, according to SKUlocal’s report “The Convenience Dynamic: How Digital Shopping Is Shifting the Grocery Ecosystem.”

“Brands and grocery retailers can no longer afford to ignore e-commerce. While some adoption rates remain low and not all categories have shifted fully online, e-commerce now represents the opportunity for significant market share which must be considered in the strategic planning process,” St. Petersburg, Fla.-based SKUlocal said in the report. “While accommodating the shift may be a challenge, it also presents a host of opportunities.”

Price plays a key role in swaying consumers to buy online rather than in-store. Of digital grocery shoppers, 52% think they find better prices online for groceries, health and beauty aids, over-the-counter health products and pet supplies, SKUlocal said. Just 28% believe they’ll get better prices by going to the store.

“It’s imperative that brands and retailers alike become very strategic on which product categories to feature and push online, and analyze which products drive more in-store sales conversions,” SKUlocal noted in the report.

For example, although Millennial shoppers are digitally native and have embraced online grocery delivery faster than other consumers, they’re also the most likely to switch channels to get what they want. SKUlocal’s research found that 56% of Millennials tend to buy natural and organic foods in-store. What’s more, only 16% have used digital channels to purchase healthier foods.

Purchases of center store and general merchandise have moved online the fastest, while HBA, OTC, and fresh and frozen foods are migrating more slowly, SKUlocal reported. Yet private label presents a sizable opportunity for brands and retailers in the digital realm. The study found that 77% of consumers have considered buying private label products online when shopping for grocery, HBA, pet care and OTC items.

“Shoppers revealed that low brand affinity is one of the main influences to consider private-label brands when shopping for high-margin grocery categories,” SKUlocal’s report said in explaining how private label is capturing strong e-commerce share.

Over the next 10 years, online grocery shopping stands to reach market saturation, accounting for over a fifth of grocery spend. That means marketers must get a better handle on where targeted shoppers are buying various product categories and why they’re using those channels, according to SKUlocal.

“Shoppers aren’t just omnichannel in terms of how they’re exposed to marketing; they’re omnishoppers that fluidly move between each channel to make the purchases that meet their needs,”. “Marketers must approach them holistically if they want to capture the right touchpoints and influence them to become repeat shoppers or loyal customers.” Is your retail experience fast enough? Are you selling fresh meal components?

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

Walmart’s Achilles Heel Grocerant niche Fresh Food Prepared Food

Time and time again the team at Tacoma, WA based Foodservice Solutions® while conducting Grocerant ScoreCards see examples of great Ready-2-Eat and Heat-N-Eat fresh prepared food and time and time again we report most of them here are this blog as regular readers know.

However when it comes to asking What’s for Dinner, regular readers also know that tour own Grocerant Guru® has never said you will find it at Walmart.  The reasons are clear. Walmart tries to make fresh prepared food a CPG product with a shelf-life closer to a can of Campbell’s Soup than too fresh prepared food. 

If Walmart’s new meal kit program rollout is anything like what it did with rotisserie chicken competitors need not worry that’s according to our Grocerant Guru®.  With ten different meals now available in 250 stores, and the program will expand to 2,000 locations by year's end, the program looks more like a category manager’s ideation rather than a customer focused fresh food program according to the team at Foodservice Solutions®.

According to Nielsen only 9% of Americans have tried Meal Kits during the past six months. So, Walmart as is introducing four $15 meal-kit options in stores and we believe that will drive trial.  However that trial will not be the solution to either customer relevance or incremental customer food sales or frequency.

Fresh prepared food with the longest shelf-life is not the solution, answer, or even the proper question when it comes to fresh prepared food.  Making fresh prepared food a CPG product is a step backwards and today’s consumers are moving forward. 

If success leave clues and it does Walmart’s progress with fresh food will have to continue.  There is no doubt that Walmart has a great team now working on fresh meal solutions for consumers and that they will drive incremental top line sales and bottom line profits as they move forward evolving with today’s consumer.

Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit www.FoodserviceSolutions.us for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.