Monday, June 22, 2009

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.

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