Wednesday, March 17, 2021

Is Walmart’s Ghost Kitchen a Real Effort at Grocerant Fresh


If one thing is clear it is that any brand can enter the grocerant niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food. Some entrants the ilk of IKEA, COSTCO have done outstanding jobs selling both Ready-2-Eat and Heat-N-Eat fresh prepared food in excess of $2 Billion US a year in sales according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Even the NBA’s Detroit Pistons, recently announced a delivery-only concept called Pistons Dish in partnership with ghost kitchen provider Reef Technology that regular readers of this blog know well.. The menu features basketball-inspired items with names like Hooper’s Honey Walnut Shrimp and Fast Break Falafel, but also promises “select Pistons merchandise.” All of it is available via DoorDash, Grubhub, Seamless and Uber Eats.

Regular readers of this blog are well aware that Edible Arrangements now just Edible and Walmart, which is working with a company called Ghost Kitchen Brands to offer both restaurant food and packaged goods for delivery and pickup from Walmart stores in Canada. A customer could feasibly order a Quiznos sub along with a Red Bull and a pint of Ben & Jerry’s from one of those locations. Walmart said the idea is to make its products more accessible.

Sam Hamam, senior director of licensees at Walmart Canada, stated “We’re very excited to be the first retailer to team up with Ghost Kitchens,” … “We’re always looking at ways to improve our customer shopping experience with greater access to affordable products, services and brands.”

One of the key success platforms of grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food is the ability to mix and match items. According to Johnson, the ability to mix and match meals and meal period components is an element that consumers truly want.

Last summer, DoorDash launched its own chain of delivery-only hubs called DashMarts in eight cities, offering convenience and grocery goods along with restaurant retail items such as sauces from chef Stephanie Izard. It is interesting to note that DoorDash refers to its DashMarts with what feels like a fitting term for this new breed of ghost kitchens: micro-fulfillment centers much akin to what Amazon has become.

Now here is the problem for Walmart, they have tried over and over again to make grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food a CPG product. That is exactly why they continue to salter in the grocerant area.  They are not alone just look how bad Kroger has done with fresh prepared food sales and profitability?  Albertsons and Safeway getting better but there remains no doubt that all legacy grocery stores will do all they can to make fresh food a CPG product. That will continue to cost them dearly and they will capitulate incremental sales to the restaurant sector and dollar store sector because of that.

There is a difference between the comfortable, familiar, and doing the same thing over and over again. That difference within the food space is where the customer has been migrating for the past 15 years. It’s time for more companies to start looking and acting like IKEA, COSTCO, and the Detroit Pistons.   

Looking for success clues of your own? Foodservice Solutions® specializes in outsourced food marketing and business development ideations. We can help you identify, quantify and qualify additional food retail segment opportunities, technology, or a new menu product segment.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

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