Tuesday, October 20, 2015

In 2016 Expect an Increase In Battle for Share of Stomach

Last week Foodservice Solutions® Grocerant Guru™ spoke at the SJU 2015 Food Summit and highlighted a battle brewing between Grocery vs Restaurants, Drug Stores, Meal Kits, and C-Stores. The undercurrents of industry change and wounds from the battle over Share of Stomach are beginning to surface.  

Albertson’s has pulled its IPO, Walmart sales and forecast profit growth diminishing, and Fresh & Easy is back in trouble and may file for bankruptcy once again.   If that is not enough, Aldi is expanding into California and will become a disruptive force as they challenge legacy retailers on price and transparency. 

What is new, consumers want to Eat-Out While Eating-In according to Foodservice Solutions® Grocerant Guru™.  The consumer today is meal orientated not pantry orientated. That is a retail operating advantage for retailers that understand the undercurrents driving change in retail foodservice today. 

Consumers have taught us one thing that is Food Quality Never Takes a Step Back. Many legacy grocery stores jumped on the HMP bandwagon in the mid-1980’s and early 1990’s only to miss the opportunity because they focused on cost over quality and fresh.  They did not understand the customer or the grocerant niche filled Ready-2-Eat and Heat-N-Eat fresh prepared food.  They treated HMR like a CPG category. They treated it as if Grocerant niche fresh food was shelf stable and lasted three weeks.  It simply sat on the shelf! They did not fool the consumer.  Many today are repeating the past, garnering the same results. 

Even more important many grocery retailers were so focused on filling consumers pantry that they never understood that the consumer mind-set has evolved and that the consumer is now much more Meal orientated than pantry orientated.  Let’s face it grocery stores have never been in the meal business.  They simply did not get it, even if/when they had the data informing them of the evolving customer.  Go Figure.

So, where does that leave us today?  Today, many legacy grocers companies fail to understand the opportunity for day-part meals.   Today, traditional grocery stores still aren’t in the meals business. More important they do not understand the need mind-set of the consumer.   

What is expected to happen in 2016?  

1.       We will see fewer grocery stores at the end 2016 than we had at the end of 2015, 
2.       Restaurant Take-Out sales will continue to rise,
3.       C-stores will see growth in number of units and sales per unit of Ready-2-Eat and Heat-N-Eat fresh food,
4.       Drug stores will start selling meal kits for one or two people expanding their pantry busting fresh food footprint,
5.       Meal Kit companies will expand into local mid-sized markets targeting the ‘Middle’ garnering more share of stomach than anyone expected. 

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information

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