Five years from now restaurant chain
leaders will understand that packaging advances help create new points of
non-traditional food distribution have empowered consumer choice.
46 Million Reasons
Restaurants Should be Concerned:
In three years between 2009
and 2012 NPD reported that the grocery/supermarket sector increased sales of
prepared meals by 46 Million. That occurred in a short three year period.
Chain Drug stores have taken notice and continue testing fresh prepared food at
locations from coast to coast. Five years from now as restaurant chain leaders
return to Chicago for the restaurant show they will be focused on
Non-traditional fresh food competitive growth.
Restaurant Customer Migration Expanding
Five years from now chain restaurant leaders will be
attending the National
Restaurant Show in Chicago networking, learning and
laughing aloud about the money they wasted sending employees to Fast Casual
Summits. Laughing aloud about how a multi-billion dollar restaurant industry
missed the Consumer
Marketing Migration that took place from 1999 to 2013.
Coddling Brand Protectionism
Five years from now chain restaurant leaders will wonder
how Mintel, NPD and Technomic reported on but missed the Consumer Marketing
Migration. Five years from now chain restaurant leaders will laugh at the
fact that the undercurrents of the evolving face of retail food competition has
been all around yet while they practiced brand protectionism, drug
stores, C-stores and grocery stores simply catered to the
evolving consumer preferences garnering share of stomach and did so within in
the ready-2-eat and heat-N-eat fresh prepared
food grocerant niche .
Five years from now chain restaurant leaders will wonder
why when in 2013 Technomic reported that revenue from prepared foods at
supermarkets had increased more than six percent annually during the past five
years. Why they continued to host, speak and pontificate on Fast Casual when
the consumer had migrated. More important T echnomic reported that the prepared food number grows to
13 percent for mass merchandisers and superstores
during the same period. All the while the margins on prepared food were
expanding creating a fast growing new revenue center for fresh prepared food in
this non-traditional fresh prepared food retail sector.
Looking Outside Current Boundaries
Five years from now all food retailers will evaluate how
they do business not how they did business. Five years from now chain
restaurant leaders will be laughing how they missed the universal commonalties
the drug store, grocery and c-store food marketers did not. Five years from now
they will understand that successful competition comes from outside well
established operating boundaries.
Five years from now no one will wonder about the findings
in a Harris Poll of 2,496 adults surveyed online between February 13 and 18,
2013 by Harris Interactive found that Americans continue to be reducing how often that they eat
out at restaurants : Fast food restaurant chain (26% less,
14% more),Local casual dining restaurant (20% less, 14% more),Casual dining
restaurant chain (24% less, 11% more),Local fine dining restaurant (21% less,
7% more),Fine dining restaurant chain (23% less, 4% more).
Channel Blurring
Five years from now all food marketers will understand
that channel blurring exist only in the minds-eye of legacy food marketers not
in the minds-eye of consumers.
Five years from now Food retailers will understand the 65
Inch HDTV Syndrome Foodservice Solutions® Grocerant Guru Steven Johnson
found: 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 an industry known for
trying to be first as in fastest to market with an ideation, food or technology
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 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 dinning independents to national chain of
"Red Roof" Italian, then to delivery only outlets and now
take-N-bake is garnering market share in the pizza sector. (Note: Home
Made Pizza Company and Papa
Murphy's are further examples of take and bake
pizza operators.)
Future Trends Point
to an Increase in Non-Traditional Meal Occasions
Five years from now restaurant chain
leaders will understand that packaging advances help create new points of
non-traditional food distribution have empowered consumer choice
Foodservice Solutions
Trends in the Food Industry Point to an
Increase in Non-Traditional Meal Occasions
Five years from now at the intersection of the consumer,
fresh prepared food and technology they will have found 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. That one in
10 shoppers choose higher-end cuts of meat in order to recreate a restaurant
dining experience (FMI, 2013).
Packaging Advances Extended Acceptance
Five years from now restaurant chain leaders will
understand that packaging advances help create new points of non-traditional food
distribution have empowered consumer choice, and American embraced 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 food service for the past four years
has been the Convenience store sector. The C-store sectors growth in large part
has been driven by fresh 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 identity that has help 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 i s restaurant quality and priced less than
Panera Bread or Corner Bakery CAFE. BothPanera
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 Foodservice Solutions® 5 P's
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 more 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
operator, consultant and brand/product positioning. Since 1991 Foodservice
Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for
more on Steven A. Johnson and Foodservice Solutions® visit http://www.linkedin.com/in/grocerant or
twitter.com/grocerant
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