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 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.
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.
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.
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.)
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 public speaking. twitter.com/grocerant
