Saturday, October 19, 2013

IKEA 2 Billion Reasons You Should Consider Entering the Grocerant Niche

Non-Traditional fresh food retailers have been exploring, entering, or exploiting the Ready-2-Eat and Heat-N-Eat fresh prepared food space aka the Grocerant Niche, at an increasing pace, and with outstanding success.  Walgreens and Pinkies Liquor stores are both selling fresh prepared food, Brooks Brothers is entering and both Costco and Ikea sell over a billion dollars a year in Ready-2-Eat fresh prepared food alone.  

Ikea the Swedish company best known for its inexpensive furniture and household products has very large Blue and Yellow stores around the world that also sell fresh prepared food. In an article in the Wall Street Journal Ikea’s Johannes Ledel explains how the fresh food unit brings in nearly $2 billion in annual revenue.  

Two Billion in annual sales places Ikea in the top tier of food retailer’s period. Non-traditional food retailers in this case a furniture store sells much more food than most of the chains reported on in restaurant industry magazines.  These retailers are often not considered competitors.  Selling food and winning is about garnering share of stomach.  Ikea garners $2 billion year and has become a destination for food.  

Regular readers of this blog know Foodservice Solutions® Grocerant Guru™ Steven Johnson regularly writes about and includes Ikea slides at industry conferences and client presentations.  IKEA’s Food division rivals Panera Bread and Arby's, with nearly $2 billion in annual revenue. Ikea “estimates about 700 million people this year will eat in one of the cafeterias that are located in 300 IKEA stores world-wide.”  I’ll let you do the math 300 stores $ 2 Billion in fresh food sales Equals $__________ per store. What are your sales per store? Ikea is a food destination.   

Fresh Food Fast Ikea’s not just fast food but priced inexpensively with tables and chairs  the limited menu consist of Salmon, roast beef, Salads and Sweden's beloved meatballs with mashed potatoes and gravy. Price is a focal point for the Ikea brand and in the fresh prepared food division it holds true. As an example in Brooklyn, NY”, a plate of 15 meatballs is $5. Kids' meals start out at $2.99, and breakfast, including eggs, bacon and potatoes, starts out at 99 cents.” 

Non-traditional fresh food retailers are finding success where many legacy restaurant chains refuse to look, consider opportunity.  Non-traditional retailers are exploring, entering, or exploiting opportunities that others simply dismiss.  Are you doing $ 2 Billion a year?  Are you expanding points of distribution?   Outside Eyes for Inside Results Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy. Visit: Johnson, or

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