Friday, April 16, 2021

FreshDirect Grocerant Growth is Customer Focused


Companies evolve, several years ago I was at a dinner with a group of industry leaders including founders of FreshDirect.  Like most companies starting out, they were highlighting their business model, and touting their success. I was touting the attributes of grocerant niche, meals, and meal components and questing if FreshDirect would every get into the niche. 

The answer was not never, not no, just kind of brushed off the question as not serious.  I guess I made my point.  While prepared foods and deli operations initially shut down at supermarkets across the country and many restaurants shuttered completely just as abruptly, savvy partnerships formed to bring consumers what they still wanted food from their favorite restaurants.

Today the question is, as vaccines continue to roll out and restaurants reopen to 50% or even full capacity, will grocery shoppers still want access to not only restaurant-quality, but actual restaurant-made food from their local supermarket? The answer according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® was simple. 

Back in the day when the grocerant niche was identified, quantified, and qualified, 1996 it was tabulated as 3.5% of food sales at restaurants, in 2019 it was hovering at 23.75 of sales.  Grocerant niche growth is not a forced fad, it is a trend that will level out but it is an accepted standard point of distribution today, tomorrow and I will continue to grow five years from now.

Now FreshDirect is counting on it. Acquired by Ahold Delhaize earlier this year is looking to meet its customers still at home while providing a new revenue stream for itself and local restaurateurs looking for ways to expand their business model and bottom line. So, FreshDirect’s merchant team, three New York City found culinary favorites, including Carbone, Nom Wah, and Milk Bar.  Which are debuting restaurant-inspired products for customers to prepare in their kitchens and enjoy at home, available for delivery through the online grocer. 

Get this, Carbone is partnering with FreshDirect to launch its line of Italian-American pasta sauces. Founded by James Beard award-winning pastry chef Christina Tosi, Milk Bar will be offering its tasty dessert treats through FreshDirect. And Nom Wah will launch a line of dumplings through the online grocer. Our Grocerant Guru® asks is that enough? Is it meals focused?

Not all restaurant meal components should be made into a CPG product.  That’s what Kroger, Walmart, and others have tried to do and have repeatedly failed at according to Johnson.

FreshDirect Chief Merchandising Officer Scott Crawford, stated, “Online grocery adaptation was the standout trend of 2020.  But we all know why. Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food has been growing at the rate of 9.7% a year for the past 6 years pre-2020.

A note to all grocery stores, there is a difference between a trend and a fad.  The grocerant niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food is not a fad, it is a platform that is garnering customer migration from all retail food sectors. Over look the sector at your own peril. Success does leave clues, so does our own Grocerant Guru®.  

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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