The consumer is dynamic not static. At the intersection of consumer migration to
new avenues of distribution, and the wiliness of chain restaurants to move with
consumers fast enough, is year over year customer counts.
It’s at the intersection that Steven Johnson Grocerant Guru® at
Tacoma, WA based Foodservice
Solutions®, asks are you as an executive doing enough to drive top-line growth,
bottom-line profits, and grow year over year customer counts? For most of you its quite clear that the
answer is no. So, we thought it might be
helpful if we shared an article not written by us that edifies the importance
of the growing grocerant niche and edifies what the ream at Foodservice Solutions® has been
saying as well. So if your company is
not as dynamic as the consumer keep reading.
We all know that prepared food has long
been a part of supermarkets’ repertoire, but some retailers have taken in-store
dining a step further: becoming a grocerant. You can too:
“The supermarket/restaurant hybrid
provides the opportunity for stores to take advantage of shoppers seeking a
one-stop shop or meal as they grab their groceries. Retailers are carving out
space for tables and full-serve counters with a wide variety of options, from
pizza to sushi to fried chicken.
Yet, some concepts have expanded on this
stepped-up service deli format. Those stores making the commitment incorporate
seating, full service, chef-driven menus and even cocktail bars. Most are
within the store perimeter and distinguishable as a restaurant as opposed to a
prepared food takeout counter. To capitalize on their offerings, retailers
cross-merchandise by highlighting in-store ingredients.
A Viable Concept
It remains to be seen how the COVID-19
pandemic will impact the grocerant segment, although the Washington,
Restaurant Association’s “Restaurant Industry 2030: Actionable Insights for the
Future” report predicts grocery stores will
expand their foodservice offerings in the years ahead.
“Pre-pandemic, more retailers were
building grocerant programs within their stores,” says Eric Richard, education
coordinator of the International Dairy Deli Bakery
Association (IDDBA), based in Madison, Wis.
“During the pandemic, things have changed, but overall, it still makes a lot of
With the increased focus on investing in
the perimeter of the grocery store, fresh prepared food represents one of the
most interesting growth areas for U.S. grocers, according to L.E.K.
Consulting’s report, “Capitalizing on Opportunities in Fresh Prepared
Foods.” The lines between retail and foodservice have been blurring as grocers
realize there is a golden opportunity to capitalize on consumers’ desire for
fresh prepared foods and drive foot traffic.
“Prior to the pandemic, prepared foods in
retail settings had taken off, and there was a lot of growth in the fresh
departments we cover,” says Richard. “We always assumed growth would continue,
but things have changed over the last few months.”
After foodservice severely dropped when
the pandemic hit, many supermarket delis were not operating at full capacity or
shut down completely. “[At that point,] supermarkets became stock-up
destinations, rather than a place to pick up prepared foods,” says Richard. “It
remains to be seen if stores will have grocerant concepts in the same capacity
as a restaurant with pickup and delivery options. Yet, being able to offer
convenient ways to purchase and enjoy prepared food in these stores will still
There is much potential for those making
the commitment. According to L.E.K.’s
report, the fresh prepared foods market has been experiencing accelerating
growth and is expected to reach $51 billion by 2021.
This increase is attributed to several
trends that are expected to continue, reports L.E.K., including:
Health and wellness
Eating away from home
Shopping the perimeter
Farm-to-table local sourcing
Foodservice in store
Defining the Segment
“Grocerant is a loosely defined term,”
says Wilson. “We consider it fresh prepared foods sold in grocery stores,
typically on the perimeter.”
What also has changed is consumers now
are more concerned about food safety and hygienic preparation than convenience.
“This is why, moving forward, the supermarket’s fresh prepared food section has
to evolve,” says Wilson. “Hot bars, salad bars, community serving spoons and
loose items in the bakery department will be obsolete, at least in the near
future. Instead, we’ll see more prepackaged items than ever before.”
The grocerant segment’s shift will result
in opportunities for foodservice equipment suppliers. “There will be a pretty
big need for new solutions when it comes to fresh prepared food in grocery
stores because of the push away from self-serve styles and utensil sharing,”
says Wilson. “Any type of equipment geared for both chilled and heated grab and
go will be more prevalent.”
Wilson predicts equipment will be more
c-store oriented, there will be more steps for cooked items, and there will be
an increased emphasis on speed for grab and go. “The momentum of packaged items
will increase, and there will be equipment applications to handle all of that,”
Still, because grocerant customers differ
from those frequenting restaurants and convenience stores, supermarkets need a
different type of presence as the sale is more unique, Wilson says.
This may include a larger online
presence. Although somewhat prevalent prior to COVID-19, shopping online has
taken off in recent weeks as shoppers remain skittish about visiting stores.
“Online shopping for pickup and delivery has been brought to the forefront,”
says Richard. “We’ve seen stats that show a sizable percentage of customers
will continue ordering food online from their local supermarket.”
With more consumers opting for curbside
grocery delivery, the opportunity is there to add in a sandwich or meal. “Our
estimates put supermarket e-commerce at between 15% and 20% in the next few
years as consumers take advantage of online ordering,” says Wilson.
This would entail retailers enhancing
online marketing, thus prompting impulse purchases on a digital shelf similar
to a physical shelf. “It’s a big opportunity to create a one-stop shop, whether
digital or physical,” says Wilson.
Retail foodservice has been gaining
market share for 15 years, with the exception of 2008, says Wilson. “We’re
facing a tough time here, but we have to evolve,” he adds. “But with huge
disruption comes great opportunity. Prepared foods won’t go away in retail.”
international corporate presentations, regional chain presentations,
educational forums, or keynotes contact: Steven Johnson Grocerant Guru® at Tacoma, WA based
Foodservice Solutions. His extensive
experience as a multi-unit restaurant operator, consultant, brand / product
positioning expert, and public speaking will leave success clues for all. For
more information visit GrocerantGuru.com, FoodserviceSolutions.US or call