Top of the day to you!
The confluence of events in the food marketplace are changing so fast at times I wonder if even the consumers can keep up! Today we are going to look at Dollar Stores now selling food. With compelling price points the five top dollar store chains have all begun selling food products many have retrofitted stores with refrigerated coolers for ready to eat and ready to heat food. This trend began four years ago by cherry picking products and competing with very few SKU’s. Now with the growing number of refrigerated units installed it's about market share. Recently the Nielsen Company stated, “The average household made 13 trips to a dollar store in 2008, up from an average of 11 in 2001…. But the average household made 59 trips to supermarkets in 2008 — 13 fewer visits than in 2001. Now we are seeing that Family Dollar added 200 more food products — including a bigger selection of pasta and Kraft salad dressings — to its shelves. Ready to eat ready to heat Grocerant food is growing as well. The consumer is empowered with choice, price and service.

Good companies do good things over and over again. Recently Wawa CEO Howard Stoeckel detailed several efforts the convenience store chain is undertaking in during the economic slump the US is in, He stated "We're not up to historic averages, but we're performing better than the vast majority of retailers," He described a focus on value and efforts to make the store experience a departure from consumers' economic trouble. "People want to feel good," he told the Philadelphia Inquiere "Even if it's for four or five minutes a day when they're on their way to work." Wawa is there and can provide that service via their employee interactions. That my friends is a true focus on the consumer and that strategy never gets old.
Additionally Stoeckel discussed was Wawa is focusing on the basics: "If there's anything we're doing through these challenging times, it's digging deeper into the soul of the brand." He added: "We've got to do what we're known for that much better." Building a better understanding of the bands relationship with the consumer and adjusting the brand values to the dynamic consumer is also a win win. Consumer are not static, brands must move with them or risk looking customers.Wawa understands that differentiation does not mean different, in Wawa’s case it means doing it better for the consumer than anyone else. Wawa’s consumer loyalty always ranks near the top in surveys. I can understand why.

Since 1991 here at Foodservice Solutions we believe that Differentiation dose not mean different! It means familiar. Consumers young and old are demanding more choice. Today that means they look for the choice in different ways, at different times. Why people eat and when they eat is paramount to where and what they will eat. More and more consumers of all ages are looking for food with fewer calories, less fat or bolder flavors. Positioning consumer friendly options directly for the consumer is always a win-win. I have now identified five hot button trends/ issues in Grocery, four in Convenience Stores, two in Dollar stores and reaffirmed three in the Restaurant niche. The confluence of these issues is striking the overlap is most interesting. It appears to me that all of these issues / trends are growing and will contribute to the build out of a new and significant food niche. That niche is the Grocerant niche filled with ready to eat or ready to heat portable foods. Just one of the over lapping hot button trends is better for you foods. Consumers ares utilizing new tools to identify, quantify and qualify where and what they will eat. Here are three websites that have become popular:
1. http://www.goodfoodnearyou.com/
2. http://www.healthydiningfinder.com/
3. www.sparkpeople.com/resources/sparkdining.asp
If your not currently cross positioning your product or menu in these new and exciting avenues of information distribution. It might be time to think about.

Top of the day to you! Today I want to share with you a great post by Mike Davidson who blogs at the seattlepi.nwsource.com I have attached his address. You will like this it’s about the Seattle Supermarket Showdown. As most of you know I live in Tacoma and share all of these local Supermarket spots here is his post.
Mike Davidson
http://blog.seattlepi.nwsource.com/mikedavidson/archives/172210.asp
The Great Seattle Supermarket Showdown
It's a decades-long debate: what's the best supermarket in Seattle? Is it a low-end one like Safeway or Albertson's, a high-end one like Metropolitan Market or Thriftway, or a speciality/organic one like Trader Joe's or Whole Foods.
We all have our own ideas as to what makes our preferred supermarkets great, but one thing we rarely have is a clear understanding of how cheap or expensive they really are. Ask 100 people on the street which is more expensive, QFC or Whole Foods, and almost everyone will say Whole Foods (or "Whole Paycheck" if they feel strongly about it). There is also great ambiguity as to exactly what a "Club Card" does. Does it lower already low prices, or without one are you paying out the nose?
Over the last two weeks, I've set out to answer these questions and more in a secret shopper special investigation. The rules were as follows:
1. Decide on a representative basket of brand-name goods.
2. Visit one branch of each major supermarket in Seattle, record the prices of said goods, and tally the totals.
3. For each item which has a cheaper/generic substitute in the store, find the lowest price substitute, and tally new totals. This would essentially be your bill if you were as price-conscious as possible when shopping. Substitutes were chosen for things like flour and olive oil, but not for things like wine because generic wine isn't a close enough substitute to the original item.
4. Perform steps 2 and 3 both with and without Club Cards if the supermarket had a Club Card program.
5. For the two stores which contained almost none of the name brands (Trader Joes and Whole Foods), simply create the closest basket possible with substitute brands, and tally the totals.
Below is the basket of goods:
2 Liter Bottle of Coke
Dozen AA Large White Eggs
6 pack of Heineken Bottles
1lb fresh lean ground beef, 15-20% fat
1lb single New York Steak
1lb bananas
1lb broccoli
14oz box of plain Cheerios
Loaf of Orowheat 100% Whole Wheat Bread
Jar of 26oz Prego Pasta Sauce
3/4 oz. McCormick's Oregano
Bottle of Kendall Jackson Chardonnay
Half Gallon of Dreyers Vanilla Ice Cream
Large Cheese DiGiorno Pizza
Bottle of 50 Advil Tablets
One Kleenex Viva Towel Roll
5lb Bag of GoldMedal Unbleached Flour
17oz bottle of Bertolli Extra Virgin Olive Oil
Can of Campbell's Chicken Noodle Soup
One 16oz of Adams Crunchy Peanut Butter
And here are the results, in spreadsheet form.
UPDATE: Since some people seem to be reading right past the link above, I'll call it out again here. If you want to see the complete results of the test, in spreadsheet form, please click the link in the previous paragraph.
General Conclusions:
1. You should never, ever shop at a store which has a Club Card without a Club Card. It is highway robbery. The lowest variation was QFC on the name-brand basket at 12% and the highest variation was Safeway on the substitute basket at a whopping 21%. While the low-end stores indeed came in cheap with the use of a card, without the card, they were among the most expensive of the bunch. Safeway, Albertson's, and QFC -- without cards -- were more expensive than Whole Foods!
2. If you really want to save money, choosing generics and cheaper substitute items when possible will save you a lot more money than going to a particular supermarket. If you're willing to go generic on your flour, your olive oil, and some other items that may not be taste-critical to you, you can chop up to 23% off your bill. By contrast, switching from Metropolitan Market to Safeway saves only 4-8%
3. The perception that high-end or specialty supermarkets are so much more expensive than low-end ones is fed largely by the fact that people simply choose to buy more expensive things in the former group. In other words, when you're in a Whole Foods or a Metropolitan Market, you often end up buying expensive things that weren't even on your shopping list because the choices are so plentiful and inviting. In an Albertson's, however, your may want to escape the store as soon as possible.
Winners:
1. Safeway. Say what you want about this low-end chain but they did come in with the lowest overall basket at $67.84. That is, of course, with generics and a Club Card, but it is still the overall lowest price. That said, however, they were only $3.66 cheaper than the much higher end Metropolitan Market on the name-brand basket, and a whopping $11.74 higher than Trader Joe's on the same group of items. Bottom line: Safeway is cheap, but not as cheap as you might think, in comparison to some others.
2. Metropolitan Market. Often referred to as "Metropolitan Markup", Metro showed it can clearly hold its own against discount stores. It placed very close to Safeway, Albertson's, and Trader Joe's on price and beat the rest of the field handily. If you're looking for a grocer with plenty of gourmet appeal and reasonable prices, Metro fits the bill nicely. But remember, when shopping at any high end supermarket, you are you own worst enemy.
3. Trader Joe's, and to a (much) lesser extent Whole Foods. These two stores are special cases in that they sell completely different brands (usually all-organic), but if you buy into the concept that what you're buying is probably better than what you'd get at any of the other stores, $76.45 (Trader Joe's) and $103.57 (Whole Foods) aren't such bad prices. If you compare it against the name-brand basket of goods, Trader Joe's beats the second closest competitor (Safeway) by $11.74 and Whole Foods comes in near the high-end but not above it. Comparing Trader Joe's and Whole Foods to the generic baskets may not be fair because the qualitative difference between a jar of Western Family Pasta Sauce and a jar of Organic Pasta Sauce from Whole Foods is substantial (if you believe that sort of thing, at least).
Losers:
1. QFC. According to this data, there is really no reason to ever go to a QFC. It's by far the most expensive of the discount stores no matter what permutation you pick (card, no card, name-brands, subs). It's so expensive that even Safeway *without* a card comes close to beating QFC with a card. Combine that with the fact that it's not really a whole lot nicer (if at all) than any of the markets on the list and there just doesn't seem to be any compelling reason to shop there. They do have Coinstar machines though, I guess.
2. Thriftway. Thriftways are usually nice, small neighborhood markets, but unfortunately, one of the things smallness has done to them is limit the amount of substitutes available. Many people (including me) actually like this, but the end result is that if you're trying to shave down your bill a little on off-brand stuff, it's a bit tough to do at Thriftway. While Thriftway's name-brand basket came in at a reasonable middle-of-the-pack $101.52, their substitute basket was second-to-worst, in front of only no-card-QFC.
3. People who will inevitably write in to tell me my test wasn't scientific and that I should donate more time in the name of science to figuring this out as precisely as possible. Sorry, not going to happen. Shopping is fun, but carrying spreadsheets around and documenting prices is not. If you would like to perform your own tests, please do and I'll gladly link to them.
All in all, this has been a productive experiment which -- although unable to crown an undisputed victor -- helped put into perspective what each supermarket's true value proposition is. It debunked the theory that higher end supermarkets are always more expensive than lower end ones, and highlighted the importance of self-control and smart substitutions.
In the end, what supermarket you visit will always be a personal choice, but armed with the right information, you can make a more educated decision. Happy shopping, and let the supermarket battles continue.
Posted by Mike Davidson at June 24, 2009 9:09 p.m.bor Statistics, the grocery store industry is made

Convenience Store News Magazine recently ran this article about Rutter’s Farm Stores in York Pa. What is most interesting is the focus on kids meals! When c-stores positioning themselves in the Grocerant space the world seems to open up for them!
Rutter's Farm Stores Offers $2.99 Kids Meal YORK, Pa. -- Rutter’s Farm Stores launched its $2.99 kids meal in 36 stores with touchscreen ordering.Featuring a choice of a grilled cheese sandwich, four-piece chicken nuggets or regular hot dog, side-dish options are also available, including an order of fries, macaroni and cheese bites or a banana, the company reported.The beverage choices are a 12-ounce fountain or frozen beverage, or a 16-ounce Rutter’s-brand iced tea, milk or juice from the cooler case."At $2.99, our kids meal is an exceptional value," said Jerry Weiner, Rutter’s vice president of foodservice. "We think it’s perfect for the economic times and for the limited amount of time that people have. With our touch-screen ordering, it’s a fast, easy way to get a tasty meal for the kids."The meal, plus a four-pack of crayons, comes in a paper "activity" bag.

The price, value, service equilibrium is resetting in Grocery stores, Restaurants and C- stores. Each is reconfiguring their ready to eat ready to heat Grocerant™ niche food product lineup. Looking for new product, packaging and consumer price points that will drive traffic. All have noticed a discontinuity in consumer food shopping behavior and all are fighting for share of stomach. Contributing to this displacement is a focus by restaurant chain leaders on short term market metrics particularly price and away from the consumer. Which in turn has caused a loss is consumer traffic as important as price might be other attributes are much more important. The consumer is turning to the grocery store hot food section (ready to eat). The problem is the grocery stores were not ready for it. The have dropped the ball, food quality is reflective of a bygone era of fried food or heat lamp food warm with few qualitative attributes. Groceries do not understand foodservice customer service in the hot food ready to eat niche! There are of course exceptions like Wegmans, Central Market, A&P and Metropolitan Market. Consumers will not stay long if things don’t improve rapidly. The battle for the consumer dollar continues in the Grocerant ready to eat ready to heat niche is on.

Convenience Stores, Grocery Stores, Supermarkets can benefit greatly by branding and building their private label ready to eat ready to heat Grocerant™ style food. Recent comments to Convenience Stores News global research specialist The Nielsen Company CEO David Calhoun when asked about the growth of private label or store brands, “Calhoun observed that retailer brands will continue to gain at the expense of secondary and smaller brands. "U.S. retailers are still in catch up mode toward world class brand strength," said Calhoun, who added retailers’ move into store brands is "not a zero-sum game. It’s a partnership to fulfill consumer needs."
The opportunity in private label ready to eat Grocerant™ has never been better. Most organizations now have category managers and brand or product private label brand managers. Resetting of the price value quality equilibrium will benefit those whose brand established brand identity with validity. That is just what brand managers do. Grocerants the next big wave.

Winston Churchill once stated: “However beautiful the strategy, you should occasionally look at the results”.
Last week we talked about a positioning a traditional product within a new niche and catapulting sales of the product and altering brand value. A perfect example was the apple? Who knew sales would boom if you cut the apple first, then placed it into a different channel. If you were raised in Washington State you might have know there would be winners and they are the Apple farmer, the healthier consumer (kids) and the QSR niche via brand enchantment.
Grocerant products are a multi-channel products consisting of ready to eat ready to heat foods; found in grocery stores, convenience stores, restaurants, supermarkets, mobile food units and kiosk. We are seeing each niche create its own answer for convenient ready to eat foods; and when they do the consumer rewards them with purchases and increased frequency. What is worrisome is watching niche industry leaders ignore the changing patters of the consumer or denying that the effects of the changed will bother their niche. In the past the result of denying change was dramatic capitulation of marketshare from niche industry leaders. We have been witness to this in Grocery, C-stores and restaurants sectors.
One of the most notable examples comes in the pizza restaurant category. Pizza Hut the one time niche and industry leader in pizza and Italian food with their famous red roof restaurants discounted the value in pizza delivery startup company Dominos who took mark share so fact Pizza Hut has never recovered. Today the Pizza Huts red roofs are nearly all gone and the founder of Pizza Hut is a Papa Johns franchisee! Capitulation of marketshare continues due to brand protectionism. When internet deliver sprang up and the consumer moved, Papa Johns was first into the niche system wide six years prior to a nationwide rollout by Pizza Hut. Papa Johns has sold well over one billion of online pizza and Pizza Hut with two years of national sales continues to capitulate marketshare. Currently in the same sector we see Papa Murphy’s growing past the 1,100 unit mark more importantly winning the consumer awards for best pizza company 7 years in a row. Papa Murphy’s is a grocerant style operation selling ready to eat and ready to heat product. Donoto’s and others are replicating the lead of Papa Murphy’s entering and expanding into the Grocerant niche.
Where is your brand? Building sales can not be just new units from the corporate view it must include alternative avenues of distributions, alternative products that are complementary not just duplications or line extensions. Example: Apple computer and the Apple Iphone more than a line extension; the line extension in the Iphone is additional software enhancing brand value.
In the food industry today we must look at our product as ask; are we gaining clients, customers or marketshare. To may business leaders currently reflect on the bottom line only bragging on how they reduced cost of: “product”, “new buildings”, “labor” “lowered existing rent” establishing standards lower or higher standards depending on how one looks at it for the rest of the industry to follow? They do this all the while they are in fact capitulating market share to other current competitors or startups.
This was a example from the restaurant niche but I could very easily use an example from C-stores how Sheetz & Wawa are grabbing large hunks of marketshare from industry leader 7-eleven or in the grocery sector how Safeway’s lifestyle stores are putting life back into Safeway leaving other lifeless. The entire food industry is experiencing change, the food research sector is bursting at the seems with new companies caving out niche reports on employee turnover, brand rankings, product values and new consultants all while industry leaders look the other way. Food manufactures are trying to keep up with change in both product and packaging with few leaders. While farmers under pressure from consumer and activist they are in fact adjusting to how they harvest their crop or grow or slaughter their animals. Winston Churchill once stated: “However beautiful the strategy, you should occasionally look at the results”. What ever niche of the food industry you find yourself in there is no denying that the Grocerant niche is on fire. Growing your concept, product or your niche it might be wise to look at Grocerants.

Branding food and selling food in any outlet particularly Restaurants, Grocery stores, Convenience stores or Supermarkets is a big task. Positioning a product within a particular niche is even a more delicate dance. When it is done correctly the results are monumental and rewarding. Timing of course is important; recently the Grocerant industry has been witness to one of the largest shifts in consumer buying patterns in one particular product. Apples, both McDonalds and Burger King introduced a package apple product for children. Within two years of introduction Restaurants in the US accounted for more consumption/sales of Apples that did Grocery stores or Supermarkets. That was / is a historic shift in purchasing pattern. Recently Bill Cross announced that his company will introduce Burger King branded Apple fry’s in 10,000 grocery stores and supermarkets this fall. Selling packaging and branding food products is an art. Success does leave clues: Differentiation does not mean different it means familiar. The Grocerant sector filled with ready to eat and ready to heat foods is on fire and consumers are filling their shopping bags with them. Are your products positioned to win in the Grocerant niche!

Convenience stores, Grocery stores and Supermarkets balance Price, Value, and Quality daily in the struggle to retain customers. While the price, value quality relationship is resetting. We are learning that Food Lion is gaining market share on Shaw’s. There are time’s that price trumps perceived quality. Then there are the times we see that Wawa is the number three food retailer in the Delaware valley here convenience and quality trump. In the restaurant sector we notice that Quick service restaurants are gaining frequency and full service (sit down table cloth) are loosing frequency. What they have in common is price quality consistency! Each also has a growing selection of ready to eat and ready to reheat food that is improving in visceral attractiveness, price and variety. Is your shopping cart going to full or empty? A full cart means interacting with the consumer, introducing new products and pricing that reflects respect of the consumer.

Grocerants are growing in popularity and customer acceptance. The ready to eat ready to heat niche is on fire. Today I simply want post this press release from Papa Murphy’s Take and Bake pizza! They are a full defined grocerant in the restaurant sector! Supermarkets, Convenience Stores and grocery stores should take notice that quality and credibility are attributes of the Grocerant niche.
“VANCOUVER, Wash., June 17 /PRNewswire/ -- Papa Murphy's International, America's largest take 'n' bake pizza chain, was recently ranked among the five leading chains in the Top Food and Top Service(1) categories of Zagat's 2009 Fast Food Survey. Results were based on the responses of 6,107 consumers who participated in the survey, which charted Papa Murphy's with In-N-Out Burger, Panera Bread, and Chipotle - 103 total best-in-class chains nationwide.
"We're honored to be recognized in such an esteemed survey as Zagat's," said John Barr, Papa Murphy's CEO. "The accolades we receive are always a result of our hard-working, enthusiastic franchise owners and their crew members. From sun up, when they make our dough fresh in each store, grate the cheese and chop the vegetables, to sun down, when the last pizza goes into a customers' oven, our owners and crew take great pride in the Papa Murphy's brand. My hat's off to them."
Papa Murphy's, now the fifth largest pizza chain in the country, currently operates over 1,100 locations in 32 states and two provinces in Canada. A key driver of Papa Murphy's success is the connection the consumer has with the product. Not only do they decide which fresh, high-quality ingredients top their pizza, but customers have the pleasure of baking it (or grilling it!) for a piping hot, delicious meal whenever they want.”

Expanding with new flavors, product and Limited Time Offers (LTO’s) is a sure fire way to keep your current customer interested and attract new ones. Restaurant brand protectionism is what many chain managers focus on and have continued to do they are afraid to leave the core business. When all the research consistently shows that that brand “Channel” protectionism is only important to the BRAND MARKETER. Many brand marketers are seemingly entrenched (singularly focused) “this is who we are” or “this is what we do”; that narrow focus is not in the mind of the CONSUMER, of fact they expect a freshness and newness as part of all brands. The industry term for all this is channel blurring; channel blurring studies repeatedly show that channel blurring is not in the mind of the consumer, it is only in the minds eye of the brand marketer. Only when chain brand marketers truly understand that the consumer is dynamic not static will a concept be able to move to the next level or in today’s world maintain market share. Limiting the ideations has stifled, growth, profitability and long term viability of many a chain. Grocery stores and Convenience store leaders are better at experimentation and introducing new ready to eat ready to heat foods. Their ability to experiment with new products and service provides them with a competitive advantage over restaurants today.

Just say Bologna! A&P’s bologna meter tells us what restaurant operators already knew bologna sales continue to rise as the economy continues to decline. Customers are cutting back and this will continue as long as gas prices continue to rise and the unemployment rate remains high. Jamba Juice rolled out their new line of food and beverages on Monday in an attempt to boost sales. The new food items including sandwiches, salads and flatbreads, including a cold tea infusion may not be enough to save the day. All the items with catchy names and linked to a social networking website that either was not working. It may have been overloaded in either case the site was not working the three times I attempted to use it. It’s no wonder Jamba Juice is having difficulty. The convenience store chain Yellow Fun to Go Line (http://yellow.co.il) incorporates a vertically integrated marketing program that provides a platform for new products, better for you products and bundled product offerings. This contemporize grocerant style operation focused on hand held foods for immediate consumption in viscerally attractive packaging brand integrated and size appropriate portioning. Catchy name are cute but have not worked to date for Jamba Juice it might be time for them create a new food entity with consumer focused identity and brand integration. We must all remember that there is always BOLONGNA!

Grocerants the next big wave! Just what is next for the Grocerant sector? Currently we see continued rollout of “deli” fresh authentic sandwiches at most supermarkets, grocery stores and C-stores. This is phase two. Where phase one was fried food of all types or roller grill food. The sandwiches are priced to compete with the QSR sector in fact many grocery stores here on the west coast have installed soda-pop dispenser machines just like the fast food companies have. They are trying to increase frequency and check average at the deli. It looks as if it might be working from conversation and what I am witnessing on trips to the store. The halo that resonates from the fresh authentic made to order sandwiches will shine on the next phase. I believe that phase three will arrive mid-2010 and will include both Italian and Mexican hot entrees at in addition to the Chinese being rolled out regionally. I am now in print so come back and see if I am correct!

Top of the day to you! I was asked recently why the “Grocerant” sector is taking off. My response was instant. I recalled a conversation with my parish priest Father Robert Rekofke SJ. I asked him what his favorite meal was; he replied any meal anyone else cooks! With a simile I recalled all of the focus groups I have watched, participated in or led and the answer was inevitability the same. People do not have the time, training or inclination to cook. Plain and simple our palates have become honed to a multitude of flavor profiles that we enjoy and our skill level at each in not equal. Nor do we have a pantry fill with all of the spices required to prepare our expanded taste. Today we are celebrating a fest with Father Rekofke on the 50th Anniversary of his Ordination as a Jesuit Priest. My message today is short but dedicated to him. It’s much easier to buy ready to eat or ready to heat food that to cook from scratch.

Grocerants the big Tent: Recently we have been discussing the visceral attractiveness of the ready to eat and ready to heat food from Grocery stores. Supermarkets, Dollar Stores and Restaurant To-go and Take-Away food. That is not all that fits under the umbrella of Grocerants. My friend Harry Roberts believes and I 100% agree that in grocery store or supermarket sit down dinning options “restaurants” inside a grocer i.e. Whole Foods Tribeca which we discussed here after my last visit or Wegmans where I regularly met friends for lunch and occasionally for dinner while attending school in Philadelphia. My local Safeway Lifestyle store has a soda fountain and tables out side ala a sidewalk café. Yes they should all be included they are now becoming destination dinning and they fit the bill READY TO EAT. Companies like Fresh & Fit in Atlanta should also be included their service of ready to eat, portioned and delivered it a perfect company to include in today’s growing grocerant niche.

Grocerants goal for ready to eat, ready to heat foods should be first; that the food is great. Second; the food needs visceral attractiveness. That must start with the walk up display in a Supermarket, the deli case in a Grocery store or the counter in a Convenience store. All too many times across the nation we can walk into a Supermarket and see ready to eat fried chicken pilled high in a glass enclosed heat holding area? The good you can smell the aroma for fresh cooked food which provides a unequaled edge of authenticity. However no one wants to buy food from a dirty greasy heated pit with grease spattered on the glass! Many Grocery retailers boast that their food is “restaurant quality”. If they would just once walk into Churches chicken, Popeye’s or KFC and notice that they serve a vast majority of their chicken out of view or away from primary view of the consumer. Restaurants food on the plate is designed to look appealing in most cases it does, where they drop the ball in visceral attractiveness is packaging of the To-go & take-Away foods. Many companies do not have size appropriate containers, brand logoed containers or proper hot & cold holding containers. Undoubtedly this rings true for both Supermarkets and Grocery stores. They have showed no attempt to brand or address visceral attractiveness of their packaging. 7-eleven is a good example of a Convenience store that does present their food and packaging well. Albeit currently in the US substandard Grocerant quality food. I believe with the addition of their new menu’s and accelerated cooking ovens they have a chance to replicate the success of Wawa & Sheetz. 7-Eleven does an outstanding job in Japan with three dayparts and stellar visceral attractiveness both of display food and packaged ready to eat and packaging over all.

Grocerant ready to eat or ready to heat foods continue to be on the upswing. The question is: are in-store ready to eat hot foods at Grocery stores and Convenience Stores private label products ? If so are they better than a grocery store private label Dry goods i.e. package of pasta? I say yes! They provide a visceral appeal with aroma that can enhance the company’s brand image. Restaurant To-go food is obviously a branded product with built in brand value. However, recently in a study by The Nielsen Company (small only a four-week sample), but according to The Nielsen Company, sales of private label goods in food, drug and mass lost share year-over-year for the period ending April 18. How can Grocery and Convenience stores build their convenient meal participation (CMP)? I have some suggestions:
1. Hire a brand manage, just like they have done with the private dry good and HBC products.
2. Adjust labor metrics closer to that of restaurants than Supermarkets.
3. Present the food in an appealing manor.
4. Focus on customer service.
5. Expand the menu to address customers desires provide more hot food options.

This blog is going to focus on my specialty: GROCERANTS! Grocerant means any retail food item that is ready to eat or ready to heat. Traditionally these items can be found in grocery stores in the deli / lifestyle section, C-stores in the prepared food area and prepackaged, ready to eat items and in restaurants under the To-go, takeout or take away or delivery section of the menu or on the website. However around the world we are now seeing sections in department’s stores and kiosk in malls in Europe and Asia and airports around the world. The items can range from entrees to side items and deserts. Some examples of items range from fried chicken, mash potatoes, cream spinach, to liver and onions, pizza, hot dogs, steak, prime rib, various casseroles (hot-dish) to salads, side salads pie, cake and any single proportioned deserts. They can be picked up at the specific unit, or delivered. A grocerant is a result of the blurring of the line between restaurants and grocery stores aimed at the time-starved consumer with ready eat or ready to heat food components that can be bundled into a meal.
Having followed this area for 12 years, I am now mad as hell at the quality, presentation and packaging options now being exhibited. I waked into a grocery store the other day they had macaroni and cheese with a harden crust that was so undesirable I did not want to by a can of peas it the store! This has to change! My goal is to assist the industry in elevating the quality, presentation and packaging of ready to eat and ready to heat foods.

Restaurants utilize new product introduction and Limited Time Offers (LTO’s) to drive sales. That we all know, over the course of the past 5 years we have seen the largest increase in the restaurant niche coming from To-go or take Away foods. The Grocerant sector, the same can be said for grocery stores, supermarkets and C-stores. What is missing in each case is quality packaging.

The only company that I can think of that does in fact do a great job with packaging is Pick Up Stix a restaurant chain. They have spent the extra time and effort to package.
Food the way the customer would like to get it! Most Grocery stores still use Styrofoam packaging no logos and they leak! The time has come for everyone in the Grocery niche to focus on the food! That includes packaging. Everyone should visit a Pick up Stix because Success Leaves Clues.

Convenience Stores, continue to gain in the foodservice area a new study by Nielsen Co. & Concenience store news reveled. I quote “Only 7.6 percent of consumers said purchasing "ready-to-eat" items to consume right away was their "primary reason" for visiting a c-store, indicating how foodservice -- for all its growth at c-stores -- is still nowhere near a destination trip for most consumers.
One-third of consumers (31.9 percent) said they purchased prepared food while at a c-store to buy other items. However, it is instructive that another third of respondents said the biggest influence on their decision to purchase prepared food at a c-store was that the food looked fresh (20.3 percent) or smelled good (11.7 percent). Only 20 percent, or one-fifth of households, cited price as the main influence on their decision to buy. This may indicate one of two factors: c-stores have some price elasticity when it comes to prepared foods, as long as the quality is top-notch; and, in many cases, prepared foods at a c-store are already perceived by many consumers to be a relatively less expensive compared with fast-food and casual restaurants”.
This is why companies like Wawa & Sheetz are doing so well they have good quality, ready to eat foods! Sounds simple. Well the grocery stores don’t quite get it yet? Crusted old looking food in so many displays? Why? The change is coming and Grocerants serving high quality ready to eat and ready to heat food. What we learn from this study is there are plenty of reasons to invest in ready to eat and ready to heat.

A Danish Philosopher once said: “Life can be understood by looking backward, but must be lived by looking forward. “

Much has changed, in the past 10 years most importantly Grocerants are a booming. The ready to eat and ready to heat niche is on fire. Whatever the individual reason consumers appear to be increasing the frequency of visits for ready to eat and ready to heat foods. Supermarkets- Grocery stores, Convenience stores and Restaurant To-go –Take-Away are all seeing positive growth in the ready to eat, ready to heat sector. The one thing that is clear Differentiation does not mean different it means familiar! The products are all very familiar to the consumer. What we are witnessing is cross-channel product swapping. The confluence of the economy in decline, higher unemployment and limited cooking skills combined with consumers demand for non-traditional highly flavored food is driving this boom. Nielsen’s channel blurring studies have consistently pointed out that it is the marketers who decry channel blurring as brand erosion. However the consumer continually shows us all that as reported by Nielsen that channel blurring is not an issue for the consumer. I strongly believe that is strong and contributing reason Convenience Stores are taking the lead in increase food quality and customers frequency, grocery stores next and restaurants overall are capitulating customers to the other two channels.

Grocerant, supermarket, convenience stores, and dollar stores have conducted extensive research into food sales. Restaurants lack the focus and will to spend on consumer research the like the others. That is one reason they are capitulating marketshare to all the others. All of the rest are now in or entering the ready to eat and ready to heat To-go food niche (Grocerants). Food purchases (drivers) are now driven not by brand marketers with new units or introduction to a new product once a or twice a year but by the consumer. During the past decade consumers have acquired skills, powered by the internet, to find food that is “better for you” or the flavor of choice. This smarter customer creates a faster changing retail food retail marketplace. In fact I have developed a new price value equation that retailers should follow:

Price + Quality + Service + Portability = Value
Incremental Value = Constantly Changing Menu (Seasonally / Sustainability with creditability)
If the food can be eaten with the hands; that my friends are a home run. Interactive, participatory and just what the consumer wants.

Grocerants could become the Next Big Thing. The Food Marketing Institute has identified three stages of the new shopper patterns:
1. Stage One, shoppers move to save money by changing their out-of-home patterns -- switching from fine dining to fast food, and then to supermarket meal solutions in place of restaurant meals.
2. Stage Two, consumers focus on changing their shopping behavior within the grocery store they have always used, scooping up more private brands and basic ingredients, and relying more on coupons and shopping lists.
3. Stage Three, shoppers begin to rethink where they shop. Full-service supermarkets were identified by 56% of shoppers as their primary store -- down from 60% last year -- with most considering themselves loyal to their primary store, but more reliant on new channels for secondary and fill-in trips.
Only the unemployed have more time. The rest of us have seem to be working harder and doing more and is some cases more for less. There still are only 24 hours in a day. Ready to eat, or ready to heat foods with new and bold flavors continue to attract more customers. Grocerants are going to be a booming format for consumers.

The price, value, service equilibrium continues resetting right now it seems that Supermarkets / Grocery stores are winning, they are becoming Grocerants. Restaurants and Convenience stores seem to be following by traffic is up at convenience with few new product roll out, it must mean price is a driver of traffic. With the up surge in sales of ready to eat and ready to heat food niche all players are in a mad race to find new sale drivers via new food products lineup. The consumer is always looking for new product, packaging and attractive price points, in turn restaurants, C-stores and grocery need incentives that will drive traffic. All have noticed a discontinuity in consumer food shopping behavior and all are fighting for share of stomach. Contributing to this displacement is a focus by restaurant chain leaders on short term market metrics and away from the consumer. Which in turn has caused a loss is consumer traffic. The consumer then turned to the grocery store hot food section (ready to eat). The problem is the grocery stores were not ready for it. The have dropped the ball, food quality is slipping and they do not understand customer service in the hot food ready to eat niche! The consumers will not stay long if things don’t improve rapidly. The battle for the consumer dollar continues.

Convenience stores and supermarkets have focused on ready to eat and ready to heat foods meeting consumer demand while building unit margins. “Might it be we (restaurateurs) have missed something? Could it be that the consumer is shifting? As Nielsen’s channel blurring study has stated year after year, channel blurring is not in the mind of the consumer; it is only in the mind of the BRAND MARKETERS! Restaurant brand marketers are more focused on controlling the brand than cultivating it. The industry equilibrium is resettling and it is all about share of stomach.
Harkin back to the original Eatzies a great example of a GROCERANT days when consumers flocked to that concept. They had a solid point of differentiation. It is my belief that copy cat niche chains have no marketing differentiation. Restaurants, C-stores and grocery operators are all faced with this new unstable paradigm. Grocery stores and C-stores on the East Coast have repositioned themselves with solid research, new highly educated staffs, and a laser focus on the consumer. Here is how I think they are winning: Packaging, Price, Portion, Portability and Purpose.
Our industry is reluctant to spend on research, quick to hire recycled industry vets, and even faster to copy what worked during the past 6 months, while looking no further. We have a half-full glass, we can adapt quicker, we have more quality touch points with the consumer, we can solve the consumers time starved problems faster, and most importantly, the consumer looks to our industry for leadership. I for one know we are up to the challenge.”

Supermarkets, convenience stores and restaurants all have image problems with their packaging. The trash that lay’s on the side of the road with brand logo’s and vibrant color is not the value add benefit marketers were looking for. While Convenient Meal Participation (CMP) is growing and more profitable than any other sector of the indsutry. I believe we should follow the lead of Frito-Lay and create new compostable packaging. If a chip maker can do it we must follow. Restaurants had been in the lead on social issues in the past. Now as our sales lag we are giving up ground in the consumer relevance area to the likes of a chip maker? To quote recent press article:

“Just in time for Earth Day, PepsiCo’s Frito-Lay Div. is rolling out compostable packaging bit by bit this year, with a fully compostable bag due out on Earth Day in 2010. Applied to bags of its SunChips brand, a popular line of multigrain snacks, the plant-based, biodegradable material is a structure made of NatureWorks’ ( www.   natureworksllc.com  ) polylactic acid (PLA) fi lm, said to decompose over 14 weeks when placed in a hot, active compost bin or pile—at home or at an industrial composting site.
The PLA film is made with NatureWorks Ingeo™ biopolymer resin made from plant sugar.
Frito says it’s the first in the convenience-food industry to introduce such packaging. Reports Thomas Oh, director of the SunChips brand, “Consumers very much want a healthier snack,
and we realized a couple of years ago
that those same consumers have an interest in what’s healthy for the planet,” he says.
“From an organizational standpoint, SunChips is the lead brand for communications around sustainability initiatives.” “

Times they are a changing and the ready to eat, ready to heat niche should focus on food and as importantly the packaging.

I recently asked "What sector of the restaurant, grocery or convenience stores sector will see the greatest volatility from the rapid rise of commodity prices? Up or down any ideas for Q4 2009?" Chris Mitchell responded with great insight” Discretionary spending commodities will be impacted mostly. High end restaurants, high margin grocery products and c-stores in general. Q4 will see the beginning of the end of the recession if . . . food harvests this summer are average or better.The great depression was as bad as it was for an important reason. The great dust bowl destroyed crops and turned an economic recession into the depression and contributing to the extended length of time it covered. With a good harvest and without more serious difficulties in the recovery plan, Q4 will be the best Quarter in 2009. 2010 will return to normal to slow growth. That is my prediction. “I have to admit that I was raised in the Midwest and heard about and watched the crop report with interest. It does play a major role in our continued economic slump. My personal concern is gas prices, they will squeeze the consumer and sales of all other things will slip.

Convenience stores are the bright spot when it comes to sales of the three sectors I follow. Both Grocery stores and Restaurants will lag in growth and restaurants will most likely see a decline in sales this year. If consumers are creating a new value price equilibrium; what does price mean?
P = Perceived Marketplace Position
R = RELEVENCE to the consumer
I = Impulse choice or no choice
C = Convenience for the consumer
E = Excellent value added quality