H-E-B tech innovation lab will Drive Digital Strategy & Delivery

Food delivery continues to drive incremental sales in every segment of retail foodservice today.  At times that delivery is a direct replacement for an in store visit according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  That said food delivery edifies brand relevance in the minds-eye of the consumer today and should be a tool in every food marketing tool kit.

H-E-B understands that while food delivery hovers around 6.2% within the grocery sector delivery of newspapers once the staple grocery store marketing and messaging has less than 31 million household penetration rate. Grocery stores and H-E-B understand digital marketing is the direct one on one relationship that is replacing the newspaper.

So, once again doing all the right things H-E-B plans to build a two-story, 81,000-square-foot technology facility and innovation lab for its digital team and Favor on-demand delivery service. H-E-B will renovated an industrial warehouse to be transformed into a “world-class” creative and collaborative workspace for Austin-based members of the H-E-B digital team and Favor’s corporate headquarters, according to the company.

H-E-B Chief Digital Officer Jag Bath stated “This state-of-the-art space will be a hub for creativity and innovation as we continue to develop the ultimate digital experience for our customers,” …“Bringing H-E-B and Favor closer together will allow us to promote collaboration between our two companies as we strengthen our commitment to building out H-E-B’s omnichannel services,” noted Bath, who also is president and chief executive officer of Favor.

Note: In support of its efforts to become a digital leader in the grocery arena, H-E-B acquired the Austin-based Favor delivery service in mid-February and then two months later named Bath as chief digital officer of H-E-B.

Meanwhile, H-E-B has steadily extended its online grocery reach via H-E-B Delivery and H-E-B Curbside service, now offered at more than 145 stores in Texas and slated to become available at 165 stores this year. Overall, the company operates 400 stores in Texas and Mexico. H-E-B is doing all of the right things.

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

H-E-B faces the Grocery store Conundrum Restaurant or Fresh Prepared Food

Many legacy grocery stores simply do not understand the consumer according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Regular readers of this blog know that Johnson believes that category managers have destroyed the grocery shopping by looking at what was sold in the store and its profitability while ignoring what customers are buying and at what price in other retail foodservice channels. 

Consumers in Texas where H-E-B is located are just like the consumer around the US according to Foodservice Solutions® Grocerant ScoreCards.  The team at Foodservice Solutions® was wondering out loud why in the word did H-E-B open a restaurant ‘taco shop’ inside one of their stores.  As outside observes they speculated that H-E-B opened the restaurant because their store are simply to damn big and/or the category managers can’t find enough food to sell customers or slotting fees to break even.

The “grocerant” trend is not just about restaurant sales it is about Ready-2-Eat and Heat-N-Eat fresh prepared food that consumers can buy in single, or family sized portions and mix and match meal components into a perfect family meal. 

It just might be time to talk about Ready-2-Eat and Heat-N-Eat fresh prepared food.  That is not food that is made in a commissary and scooped out of a bucket for two weeks and sold a fresh.  Today consumers can tell the difference.  Fresh is onsite or a regional kitchen that makes and distributes fresh food daily.  It is not meant to come in sealed plastic buckets, sit on the shelf for 6 weeks then be scooped out. That is not grocerant fresh food too consumers today.

Restaurants sales per square foot range on average from $525 to $580 dollars per square foot.  Yes, there are exceptions but it does not make much of a difference if it is a fast food format, fast casual, or full service the sales per square foot remain within those average.  My point is we have no problem with what the concept is we have a problem with the fact that most grocery stores don’t first make a serious effort to integrate a quality fresh prepared food program selling meal components before opening a restaurant.

Most regular readers of this blog remember what we said when Hy-Vee opened Wahlburgers. You have to understand that Hy Vee also has very large stores kinds makes you wonder just how Hy-Vee will integrated Wahlburgers brand values into their store.  We ask after one year will Walhburgers in Hy-Vee exceed the volumes of those outside / not in Hy-Vee?

In the last 12 years there are now 47% fewer traditional grocery stores in the US.  At the same time there are now 31 restaurants in the US for every grocery store.  Restaurants have problems of their own and restaurant customer counts remain flat.  Restaurants are not the solution to solving grocery store customer migration.  Success does leave clues and the team at Foodservice Solutions® has the clues and understand that a new business model is required if legacy grocery stores intend to regain foodservice importance.  Are you looking at what you sell or do you know what your customers are eating and where and why?

So just what is your New Electricity? Success does leave clues www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed a Grocerant Program Assessment, or new Grocerant niche product Ideation?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us

Kid’s Meals Grocer H-E-B aims to Win back Families

In an effort to win back family business once the mainstay of the grocery business Texas, based H-E-B took a direct shot at chain restaurants when the company's Central Market location in San Antonio, Texas, has launched family focused meal kits for kids. The kid-friendly entree choices the ilk of spaghetti and meatballs and chicken quesadillas are designed to appeal to and feed only kids.

The meal kit are priced at $6.99 to compete with fast food restaurants and feed two kids. The meals come with pre-portioned ingredients and require some cooking, Ok we know that at fast food restaurants now cooking is required but you can serve a meal they like at home and your kids will know you cooked for them.  That just might be more important than you think.

H-E-B is the only grocer at this time targeting kids with specific kits designed to appeal to the younger palate. Scrumpt, Nurture Life and some other companies do offer subscription based meal kits for kids, and the "kid meal kit" space seems to be exploding accord to new reports.

1.        A new target consumer has emerged in the fast-growing meal kit industry – kids. H-E-B has launched meal kits for kids at its San Antonio Central Market store, according to Retail Leader. The new line features entrees such as spaghetti and meatballs and chicken quesadillas. Each kit costs $6.99 and feeds two.

2. H-E-B joins Yumble, Scrumpt and Nurture Life in the children’s prepared meals space. HelloFresh co-founder Dan Treiman helped launch Yumble last summer and it is now available in 26 states with expansion planned this year.
3. The home meal kit category has grown to $5 billion, according to Packaged Facts. Although online players like Blue Apron and HelloFresh dominate the market, grocers like Kroger, Albertsons, and now Walmart, have steadily grown sales. According to Nielsen, sales of in-store meal kits grew 26.5% last year, to $154.6 million.

McDonald’s Happy Meal just might be under attack as both H-E-B and Yumble have promised “fun” in their offerings, and Yumble’s boxes include activity sheets and trivia cards. It will also take some promotional pushes to get the word out that these targeted kits exist. H-E-B will need to promote the new offerings in store circulars and online, and, if they haven't already, position the kits next to their grown-up counterparts. H-E-B currently offers dinner-for-two meal kits ranging in price from $14 to $18. Think about it fun for mom, dad, and kids. 

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