Chain Restaurants Need to Attend PLMA’s Trade Show in November

 

Success does leave clues and losing customer counts year after year simply has to stop if the restaurant sector wants a return to a new normal.  If not the seven, year trend of raising prices, and year over year same store customer count declines will continue according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The fast of the matter is restaurant traffic has yet to recover. Year over year, same-store traffic was down -5.1% compared with May of 2019. Not only are guest counts declining in restaurants, but traffic performance worsened during the most recent month. April’s two-year same-store traffic growth was relatively stronger but still down 4.0%. This can’t continue forever.

This year the PLMA annual trade show will be putting a spotlight on foodservice for the grocery sector as demand for affordable, restaurant-style meals continues to drive customer adoption. The Private Label Manufacturers Association (PLMA) plans to highlight foodservice at its annual Private Label Trade Show.

When PLMA announced this week that the 2021 Private Label Trade Show, to be held in-person on Nov. 14 to 16 in Chicago, will feature expanded participation by foodservice suppliers across food, nonfood and beverage categories. Overall, the event is expected to draw more than 2,000 exhibitors and over 5,000 visitors. It was clear that the outside eye’s that need to be there are those from the restaurant sector according to Johnson.

Today, grocery stores are more competitive with restaurant takeout than ever before, PLMA said, citing a spike in demand for prepackaged, ready-to-eat prepared foods, more convenient snacks and meals to go as many consumers tire of the months of cooking at home during the pandemic.

At the same time, the New York-based association noted, a surge of in-app and online ordering for home delivery and curbside pickup have blurred the lines between retail grocery, convenience and restaurant channels. Yes, just like restaurant online ordering but consumers are learning that they can get a restaurant quality meal for less at a grocery deli then from a restaurant.

According to PLMA Vice President Anthony Aloia, stated, “Consumers have become more accustomed to finding freshly made, restaurant-style meals in supermarkets — whether prepared by in-store bakery, deli and meat departments, or brought in from a ghost kitchen or commissary — which are sold at extremely reasonable prices under the retailer’s own brands.”

 

Chain restaurants suppliers will be there, including some the nation’s largest foodservice, such as Sysco, US Foods, Aramark and McLane, among other — will on the show floor at this year’s event along with buyers from major grocery retail chains, PLMA said.

These foodservice distributors and wholesalers offer highly developed brand programs, ranging from value labels in food, nonfood and takeout packaging to proprietary labels in such categories as coffee blends, farm-raised meat and produce, craft cheese, artisan bakery, sustainably sourced seafood and ethnic fare, including Italian, Latin and Asian specialty foods, the association said.

Get this, last year, the top 20 private-brand categories by dollar volume included frozen prepared foods at $2.3 billion (with an 11.1% market share), deli prepared foods at $2.2 billion (with a 38.7% share) and grocery prepared foods at $2 billion (with a 12% share), according to the 2021 PLMA Yearbook. By unit volume, grocery prepared foods (1.3 billion, with a 13.1% share) and frozen prepared foods (763.7 million, with a 12.9% share) were among the top 20 private-label categories.

Many “best in class” retail chains already have expanded their convenience-focused food offerings for prepared, kitchen and table-ready meals, either packaged for online pickup or delivery or for grab-and-go from stores, according to PLMA.

Retailers simultaneously have rolled out new mobile purchasing, shop-from-home and last-mile delivery options to make it easier for customers to get prepared foods. In addition, grocery retailers have latched onto restaurant food trends, including farm-fresh and locally sourced ingredients, better-for-you fare (natural, organic and minimally processed foods), more options for special diets (plant-based, vegetarian and vegan) and international cuisine.

The battle for share of stomach is on. After climbing to over 50% of total U.S. food spending in recent years, foodservice market share plunged to a low of 30% in April 2020 while retail food spending soared to a 70% share, according to the FMI-The Food Industry Association’s U.S. Grocery Shopper Trends 2021 study. Through March 2021, that has shrunk to a 12% gap in favor of food retail, with restaurants’ monthly revenue still 17% below earlier levels, FMI reported.

PLMA press release stated, “As the pendulum swings back towards normalcy in months ahead, restaurants  whether fast food, takeout fast-casual or fine dining — are sure to feel pressured to engage the challenge posed by all this expansion of foodservice at retail. Expect them to fight to woo their customers back,”

Regular readers of this blog know that, ordering convenience, delivery, and full flavored food, will be among the battle lines for fast food and takeout. Less crowding, touchless payments and visible sanitation will no doubt continue to matter for in-dining experiences.”

Why worry? Restaurants will be facing additional expense for such improvements and a possible rise in labor costs, we can also expect to see more aggressive promotions and lower prices. Taken together, these likelihoods are sure to make all manner of private-label products from foodservice suppliers increasingly attractive to restauranteurs from a margin perspective.

Invite Foodservice Solutions® to complete a Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869