Can Kroger Take the CPG Mentality Out Fresh Prepared Food

 

Kroger wrote off $12 Million after they experiment with Main & Vine that featured Ready-2-Eat and Heat-N-Eat fresh prepared foods, meats, bakery and produce after only 23 months.  That was after they had owned Harris Teeter, and Mariano’s for years.  How could that be? 

Simple, Kroger tried to make grocerant niche Ready-2-Eat and Heat-N-Eat fresh food a CPG product according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  It must be something in the water at the Kroger corporate office, it’s like they are wearing tennis shoes without laces and trying to run.  They keep trying to make the future look more like the past.

Given their lack of growth success within the grocerant niche we once again were not surprised to see them try to get into the restaurant business with a new partnership with delivery-only startup ClusterTruck.  

The team at Foodservice Solutions® asks can they restrain their staff and their habits of the past trying to make everything look like yesterday? ClusterTruck is to open ghost kitchens at Kroger stores near Indianapolis and Columbus, Ohio.

So, Kroger is repurposing about 1,000 square feet of space at its participating stores to make room for the ghost kitchen prep and pickup areas. The ClusterTruck kitchens offer a menu of more than 80 delivery and takeout meals “best characterized as food quality you can get at a sit-down restaurant with the personality of street food,” the Kroger PR.

Dan De La Rosa, Kroger’s group vice president of fresh merchandising  stated, "The new on-premise kitchen, in partnership with ClusterTruck, is an innovation that streamlines ordering, preparation and delivery, supporting Kroger as we meet the sustained customer demand for quick, fresh restaurant-quality meals, especially as we navigate an unprecedented health crisis that has affected every aspect of our lives, including mealtime,”,

The shift to a focus on meals is important according to Johnson, who added “if Kroger focuses on the consumer and meals this just might be one pilot that takes flight.” If success leaves clues and it does consumers are the core to any brands long term success and consumers are dynamic not static.

Will the ClusterTruck pilot light burn out? If Kroger, evaluates it on CPG metrics, or integrates marketing messaging that treats it more like a CPG product the odds are good that the ClusterTruck pilot light may fall the way of all the other grocerant niche testing.

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, 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

Kroger Tries Everything including Virtual Restaurants but Will it Help

The Kroger Co. with 19+ banners and slew of branding lessons learned is once again grasping for something to become a breakout hit according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

After spending $12 million dollars on a test concept store Main & Vine they closed the door. Clearly, after spinning off Lucky’s Market and taking a $238 Million dollar charge, opening a virtual restaurant should not cost them $12 Million and this just might be the key to leaning how to rebrand some of their 19 banners to focus on meals rather than slotting fees and shelf space.

When Kroger announced a partnership with ClusterTruck to open a series of delivery-only “dark kitchen” restaurants capable of delivering fresh meals to shoppers in less than 30 minutes Johnson, said “customer migration from cooking from scratch to grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meals continues to drive customer adoption and Kroger if they have the ability to vertically integrate a customer focused message just might have a chance within this space.”

The Kroger Delivery Kitchen Powered by ClusterTruck will offer multiple menus from a single scratch kitchen, the Cincinnati-based retailer said. The service officially launched Dec. 2 in Carmel, Ind., with additional availability in Indianapolis; Columbus, Ohio; and in Denver, where the service will be known as King Soopers Delivery Kitchen. If you live in one of those locations please let us know if you tried the service, if you liked the food, and if the food was hot and delivered within 30 minutes.

Kroger executives have long looked at restaurants and prepared food as market-share opportunities, noting shoppers spend about as much on food away from home as they do on food at home. The company in recent years has opened a restaurant; invested in the meal kit company HomeChef; and recently launched a food hall at a new flagship store in downtown Cincinnati. Kroger will potentially bring new marketing power and its own customer data to ClusterTruck. But that’s not all that’s needed. Is your brand looking for grocerant niche success, quit looking and call the experts since 1991, Foodservice Solutions®.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a new menu product segment and brand and menu integration strategy.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant/ or twitter.com/grocerant