The foodservice battlefield is changing again, according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Convenience
stores are investing more heavily in prepared food. Quick-service restaurants
(QSRs) are accelerating menu innovation. Grocery stores are expanding fresh
prepared foods. Restaurants are improving takeout and delivery. And consumers
continue to move seamlessly among all of these channels looking for one thing:
A
good meal, when they want it, where they want it, at a price they believe
represents real value.
A
recent Convenience Store News
webinar, “QSRs vs. C-Stores: The Battle for Foodservice Dollars,” offered
plenty of smart observations about how convenience stores can compete with
QSRs.
But
from my perspective as the Grocerant
Guru®, there is a bigger story here.
Much
of what the industry is now describing as the future of foodservice has
actually been developing for decades.
Leading
non-traditional food operators have been selling prepared food for takeout,
delivery and consumption at home for years. They have been blurring the lines
between restaurants, grocery stores, convenience stores and foodservice long
before the word grocerant became part of the industry vocabulary.
Foodservice Did Not Begin With the Drive-Thru
The
foodservice industry sometimes talks about innovation as if every new
foodservice idea begins with a restaurant.
It
doesn't.
The
history of food sold for consumption away from the traditional restaurant table
is much broader.
Takeout
has been part of food culture for generations. Delicatessens, bakeries,
pizzerias, Chinese restaurants, supermarkets, butcher shops and neighborhood
markets have long prepared food specifically for customers to take home.
Then
came increasingly sophisticated prepared-food departments in supermarkets.
Consumers
could buy a rotisserie chicken, deli sandwich, prepared salad, soup, entrée or
side dish and take it home for dinner.
That
was an early version of what I call the Grocerant Revolution.
The
restaurant wasn't necessarily preparing the meal.
The
grocery store was.
Then
convenience stores began expanding beyond gasoline, cigarettes and packaged
snacks into fresh sandwiches, pizza, roller-grill food, coffee, breakfast and
increasingly sophisticated prepared meals.
Delivery
created another major shift.
Pizza
companies demonstrated that the restaurant did not have to be the destination.
The meal could come to the consumer.
Then
technology accelerated everything.
Online
ordering, mobile apps, third-party delivery platforms, curbside pickup,
drive-thru, grocery pickup and increasingly sophisticated foodservice programs
have transformed the consumer's relationship with food.
The
consumer doesn't think in channels.
The
consumer thinks in occasions.
“I'm
hungry.”
“I
need dinner.”
“I
don't have time to cook.”
“I
need something for the family.”
“I
want something quick.”
“I
want something healthier.”
“I
want a good deal.”
“I
want it delivered.”
That
is the real foodservice competition.
Welcome to the Food Channel Blurring Era
This
is why I have spent years talking about Food Channel Blurring.
The
traditional definitions of restaurant, grocery store and convenience store are
becoming less meaningful.
A
supermarket can operate like a restaurant.
A
convenience store can operate like a restaurant.
A
restaurant can operate like a grocery store.
A
grocery deli can compete with a QSR.
A
c-store can compete with a fast-casual restaurant.
And
a restaurant can compete with the supermarket's dinner solution.
The
consumer simply sees food.
That
is the fundamental premise behind the Grocerant niche: fresh prepared Ready-2-Eat
and Heat-N-Eat food moving across traditional and non-traditional channels.
And
this is precisely why the current QSR-versus-c-store conversation is so
interesting.
What QSRs Do Well
The
webinar correctly identifies several areas where QSRs have developed
significant competitive advantages.
They
understand operational consistency.
They
understand portion control.
They
understand speed.
They
understand menu simplification.
They
understand promotions.
They
understand limited-time offers.
They
understand marketing.
And
perhaps most importantly, they understand that consumers need a reason to come
back.
QSRs
are also increasing the cadence of menu innovation.
Limited-time
offers create urgency. New flavors create excitement. Sauces create
differentiation. Chicken remains a powerful traffic driver. Beverages continue
to expand. Better-for-you options address changing consumer expectations.
But
there is another important point here.
Innovation
isn't innovation simply because it is new.
The
real question is whether the consumer believes the new product is better.
That
brings us to perhaps the most important part of the current foodservice value
equation.
Price Is Important. Value Is Bigger.
Consumers
absolutely care about price.
But
price by itself does not define value.
Consumers
increasingly ask:
“What
am I getting for what I'm paying?”
That
is a very different question.
A
$10 meal can be expensive if the consumer doesn't like it.
A
$12 meal can be a bargain if the consumer believes the quality, portion,
convenience and experience justify the price.
This
is why I believe foodservice operators should think about Price, Value and
Service as an equilibrium.
Lowering
price is not always the answer.
Improving
the food may be more powerful.
Improving
packaging may be more powerful.
Improving
portion size may be more powerful.
Improving
speed may be more powerful.
Improving
convenience may be more powerful.
Making
the customer feel recognized may be more powerful.
The
winning foodservice operator doesn't necessarily offer the lowest price.
The
winner delivers the strongest perceived value.
The C-Store Has a Different Weapon
This
is where convenience stores have an enormous opportunity.
QSRs
are highly structured businesses.
That
structure creates consistency, but it can also create limitations.
The
convenience store has something different:
Convenience.
It
is right there.
It
can be open when other foodservice operators are closed.
It
can sell gasoline, beverages, snacks, grocery items and prepared food during
the same visit.
It
can create a highly localized assortment.
It
can know its customers.
And
it can potentially change its food offer much faster than a large national
restaurant chain.
That
last point deserves considerably more attention.
A
national QSR may have to navigate corporate development, testing, supply
chains, packaging, equipment, training, marketing and technology before a new
concept reaches thousands of restaurants.
A
well-run convenience retailer can sometimes identify a local opportunity and
move much faster.
Speed
to market is a competitive weapon.
The
question is whether c-stores will actually use it.
The Grocerant Advantage: Think Beyond the Store
The
biggest mistake any foodservice operator can make is thinking only about what
happens inside the four walls.
The
future of foodservice is about the food occasion.
Breakfast
on the way to work.
Lunch
at the job site.
Dinner
on the way home.
A
family meal when nobody wants to cook.
A
prepared meal for an older consumer.
A
protein-rich snack between activities.
A
beverage occasion.
A
late-night meal.
A
weekend gathering.
A
meal ordered for delivery.
A
meal purchased for pickup.
These
are all foodservice occasions.
The
operator that understands the occasion can build the offer around the consumer
rather than forcing the consumer to adapt to the operator's business model.
That
is exactly what leading non-traditional food operators have been doing.
Prepared Food for the Home Changed Everything
The
growth of prepared food for home consumption may ultimately be more important
than the battle between QSRs and c-stores.
For
decades, consumers were taught that dinner meant buying ingredients and
preparing the meal at home—or going to a restaurant.
That
binary choice has largely disappeared.
Today,
consumers can buy a fully prepared meal at a grocery store.
They
can buy a partially prepared meal.
They
can buy a restaurant meal for takeout.
They
can have a restaurant meal delivered.
They
can pick up a hot meal at a convenience store.
They
can order groceries and prepared foods together.
They
can purchase a refrigerated or frozen prepared entrée and finish it at home.
The
kitchen has become an extension of the foodservice industry.
That
is the Grocerant opportunity.
The New Competition Isn't QSR vs. C-Store
I
don't believe the real battle is QSRs versus convenience stores.
The
real battle is for the consumer's next meal occasion.
That
competition includes:
·
QSRs
·
Fast-casual restaurants
·
Convenience stores
·
Grocery stores
·
Supermarket delis
·
Club stores
·
Food halls
·
Delivery platforms
·
Prepared-meal companies
·
Specialty food retailers
·
And increasingly, retailers that never
traditionally considered themselves foodservice operators
The
consumer doesn't care who wins the channel battle.
The
consumer wants the best answer to today's meal occasion.
That
changes the competitive equation.
What Should Foodservice Operators Do?
The
lessons from QSRs are valuable.
Build
a strong innovation pipeline.
Use
LTOs.
Improve
existing products.
Manage
portions.
Control
execution.
Create
compelling promotions.
Use
culturally relevant marketing.
Deliver
consistent quality.
But
don't simply copy the QSR playbook.
Use
the strengths of your own channel.
For
convenience stores, that means using convenience, speed, location, extended
hours, product diversity and local customer relationships.
For
grocery stores, it means leveraging fresh food, shopping frequency, prepared
meals and the ability to combine ingredients and finished foods in one trip.
For
restaurants, it means recognizing that the restaurant is no longer limited to
the dining room.
And
for every operator, it means understanding that foodservice is no longer a
channel. It is an ecosystem.
Three Insights from the Grocerant Guru®
1. Stop Thinking in Channels. Start Thinking in Food
Occasions.
The
consumer doesn't wake up thinking, “Today I'm going to give my foodservice
dollars to a QSR.”
They
think, “What's for breakfast?”
“What's
for lunch?”
“What's
for dinner?”
“I'm
hungry.”
The
operator that solves the occasion better wins the transaction.
2. Convenience Is More Than Location.
Convenience
isn't simply being five minutes away.
Convenience
means reducing friction.
It
means having the right food, at the right time, in the right format, at the
right price, with easy ordering, pickup or delivery.
Convenience
is the new currency of foodservice.
The
winners will be the operators that make the consumer's life easier—not merely
the operators with the lowest price.
3. The Grocerant Is Not the Future. It Is the Evolution of
Foodservice.
For
decades, innovative non-traditional food operators have been preparing food for
people to take home, delivering meals, selling prepared foods through grocery
stores and convenience stores, and blurring the line between retail and
restaurants.
What
is happening today isn't the beginning of that movement.
It
is the acceleration of it.
The
next generation of foodservice winners will not ask, “Are we a restaurant,
grocery store or convenience store?”
They
will ask a much better question:
“What
foodservice problem can we solve for the consumer today?”
That
is where the real growth opportunity lies.
And
that is why I believe the Grocerant niche—fresh prepared Ready-2-Eat and
Heat-N-Eat food—isn't taking foodservice away from traditional operators. It is
redefining what foodservice means.
For international corporate
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 www.GrocerantGuru.com , www.FoodserviceSolutions.us or call 1-253-759-7869
