Foodservice Discontinuity Creating Opportunity

Chain Restaurant customer counts have been averaging close to 2.8% decline in customer counts for the past five years. That was unsustainable according to Johnson who states “14% customer count declines over five years, without a business model change, can’t last much longer for many chain operators.”  It’s time for restaurant operators to embrace the Grocerant niche and evolve their business model.   

Foodservice Solutions® Grocerant Guru®, Steven Johnson,  stated restaurant discontinuity is the direct result of new competition in the Ready-2-Eat and Heat-N-Eat fresh prepared meal and meal component grocerant niche specifically evolving grocery store service delis, convenience stores, and dollar stores. 

Given the ‘cash’ infusion by the US Federal Reserve by the end of the year Q4 2020, an inflation of 2.5% to 3.1% is very likely.  Restaurants that want to drive brand relevance, top line sales, and bottom-line profits with need to evolve customer relevance adding incremental meals, meal components, and mix & match foodservice options according to Johnson.

When the pandemic subsides, and restaurants reopen, if they continue to look more like 1990 than 2021 the results are simple to predict, more turnover in at the CEO level for chain restaurants, and more store closing.  New points of fresh food distribution are popping up and new suppliers are selling branded niche fresh food meals and meal components that look a lot like entrees from yesterday’s chain restaurant menus.

Grocerant niche Ready-2-Eat an Heat-N-Eat fresh food sales are expected to increase 9.2% during 2020. How is it that C-stores have evolved their business model with Grocerant niche Ready-2-Eat an Heat-N-Eat fresh food, grocery stores have evolved their model with Grocerant niche Ready-2-Eat an Heat-N-Eat fresh food, furniture stores the ilk of IKEA reports sales of Grocerant niche Ready-2-Eat an Heat-N-Eat fresh food at over $2 Billion a year and yet chain restaurants look more like yesterday than tomorrow?

So, back in the day (2015) the team at Foodservice Solutions® released a White Paper Restaurant Consumer Discontinuity; we noted consumer migration in food format preference from meals eaten in restaurants to fresh prepared meals bought and eaten at home.  The undercurrents of consumer migration from Eating-Out too Eating-Out while Eating-In in larger part was driven by The 65 inch HDTV Syndrome.  

It’s true, 63.7% of all U.S. households are comprised for one or two people. 80+% of Americans visit a fast food restaurant at least once a month. Regular readers of this blog know we regularly documented that consumers like to mix and match meal components and they can get them fast at fast food restaurants. Mix and match meal bundling is a benchmark for success within the grocerant niche. Don’t capitulate another year and let consumer discontinuity linger.

The latest Foodservice Solutions® grocerant scorecards reveal that 78.1% of consumers believe grocery store deli fresh foods are ‘better-for-you’ than most restaurant meals. If you are selling fresh food and your outlets look more like yesterday than tomorrow and your year over year customer counts are declining it might to time to call in some outside-eyes.  Are you looking a customer ahead? Or are you looking at yesterday customer today? 

Meal time is now becoming a time of convenient meal participation, with differentiation and individualization for the entire family.  The ability of the retailer to empower consumer choice within a bundled offering creates an additional platform for success. Success does leave clues?

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us on our social media sites: Facebook,  LinkedIn, or Twitter

Battle for Share of Stomach

The Grocerant Niche Growth Can Drive Innovation within the Restaurant Sector

Foodservice Solutions® Grocerant Guru® once again reiterates convenience is the key factor driving supermarket prepared food sales, tired of cooking, tired of doing dishes shoppers seek quick-and-easy alternatives to cooking meals at home while giving the family entrée choices they don’t have the skill-set to cook at home.  

Food retailers in every foodservice sector can make life at home alone or with the family easier by offering mix & match bundled meal deals that combine an entree with two sides, for example, or other combinations of grocerant niche Ready-2-Eat or Heat-N-Eat meal components. With the grocerant niche merchandising top of mind combined with a branded promotion, bundled meals can help drive incremental spending by encouraging customers to “trade up” from a stand-alone entrée according to our Grocerant Guru® Steven Johnson.

Think about how our Grocerant Guru® suggest selling incremental meal components. By merchandising grab-and-go side dishes for two-to-four people near the rotisserie chicken as part of a meal deal is one way to make bundling easy for shoppers and spur impulse sales. Offering a variety of sides and starches lets shoppers customize their meal based on the preferences of individual family members. Or, consider bundling the entree with a family-sized prepared salad from the deli to make a quick and easy light meal with broad appeal.

The restaurant sector has seen a boom in delivery and takeout that is often attributed to a surge in demand from millennials, but new research shows baby boomers may be the drivers of ongoing growth.  That according to our Grocerant Guru® this is but another example of customer migration from grocery stores to new non-traditional fresh food retail outlets for meals for home.

In research from the National Restaurant Association shows that 51% of baby boomers—defined for the research as consumers ages 55 to 73—are not ordering delivery and takeout as often as they’d like. That compares with 43% of millennials, or people ages 21 to 38.

Nearly the same portion of the younger group, 42%, indicated a desire to dine on-premise more frequently. That compares with the 38% of baby boomers who said they’d like to eat at restaurants more often.

Sandwiched in between those two generations were Gen Xers, who demonstrated a strong desire for more off-premise meals (49%) and on-premise dining (47%). The research defines members of that cohort as consumers ages 39 to 54.

The research confirms that consumers are still hungering for more takeout and delivery. Forty-nine percent said they would like more off-premise restaurant meals, compared with 42% who cited a pent-up demand for dine-in occasions. It’s time to evolve your 1999, 2005, 2015 business model with customer relevance.

When you look at all of the data one thing is clear consumers do not want to cook, do not want to do dishes, and they all want dinner with ease.  How are you preparing to serve dinner to the next generation of dinners? Do you know where they will want to eat? When the want to eat? Or how they want to eat their next meal?

Looking for success clues of your own? Foodservice Solutions® specializes in outsourced Grocerant niche food marketing and business development ideations. We can help you identify, quantify and qualify additional food retail segment opportunities, technology, or a new menu product segment.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, www.Linkedin.com/in/grocerant/  or www.twitter.com/grocerant

7-Eleven Sells Fresh Food Fast

There is no other food retail company that sells branded fresh food as fast or as successful as 7-Eleven according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. When it comes to food branding 7-Eleven has to rank near the top.  Consider that back in 1967 they branded the  Slurpee that has become a platform for fresh food fast and global success story.

Regular readers of this blog know that success does leave clues and while the Slurpee was clue one what would you say if 7-Eleven was to open Southern-inspired quick-serve concept? Well, they did and they branded the concept called “Raise the Roost Chicken & Biscuits”. The concept is co-located in one of four of the retailer’s new Evolution Stores.

In short, 7-Eleven Evolution Stores are real-time, real-life experiential testing grounds where customers can try and buy the retailer’s latest innovations in revolutionary new store formats. Dubbed, “Chicken Worth Crossing the Road For,” Raise the Roost offers a simple menu: made-from-scratch, hand-breaded fried chicken tenders with signature sauces, bone-in and boneless wings, signature chicken sandwiches and breakfast sandwiches. The in-store restaurant from 7-Eleven offers both made-to-order and grab-and-go options.

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food sells and 7-Eleven knows it, built on a dayparts with Coffee,  the Big Bite, Stuffed Pillsbury Waffle, Pizza and the Slurpee to name but a few. 

7-Eleven President and CEO Joe DePinto stated “On the go customers are looking for high-quality, differentiated food options, and 7-Eleven continues to explore new concepts that meet that demand,” “Raise the Roost offers craveable food and generous portions at prices below what you’ll find at most fried chicken establishments.”

In addition to Raise the Roost, the New York 7-Eleven Evolution Store located at 88 Greenwich Street also offers exclusive products, services and features:

·         Made-to-order specialty drinks that give customers the option to customize their drinks in a full-service beverage format including custom hot coffee drinks like flavored lattes, mochas and more as well as custom cold drinks like smoothies and cold brew coffee

·         Self-serve bean-to-cup coffee with the addition of touch-screen machines that brew custom hot and iced coffee in just seconds

·         Novelty beverages on tap that dispense cold beverages like tea, cold brew, kombucha, nitro cold brew, flavored drinks and more

·         Cold treats bar with self-serve frozen yogurt and ice cream that can be swirled to create new flavors with multiple toppings

·         Mobile Checkout: Customers can skip the checkout counter and pay for their purchases via the 7-Eleven app and accompanying 7Rewards loyalty program

·         7NOW Delivery App: 7-Eleven’s on-demand delivery app allows customers to achieve convenience like never before and have their favorite items like fresh food, beverages, snacks, groceries and household products delivered straight to their door

Now consider this 7-Eleven understands that retail foodservice needs to be interactive and participatory so each Evolution Store has customized design elements and product assortment to reflect the neighborhood and customers it will serve.

One last success clue: 7‑Eleven operates, franchises and/or licenses more than 70,000 stores in 17 countries, including 11,800 in North America.  Remember Fresh food fast sells.

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

Restaurateur Robert Earl’s Entrepreneurial Relevance Expands

Most of our regular readers know that Robert Earl is British-American businessman, founder and CEO of Planet Hollywood, Chairman of the Planet Hollywood Resort & Casino in Las Vegas,^[5] and host of Robert Earl's Be My Guest television program which airs weekly on the Cooking Channel. How many of you knew he has entered the grocerant niche’s world of virtual meal delivery?   

Once an entrepreneur always an entrepreneur Robert Earl, is now also the founder of Virtual Dining Concepts, and their first concept is called Wing Squad. Earl understands the pent-up consumer demand for hand held food for immediate consumption.  Wing Squad is delivery-only restaurant that sells wings, sides and sweets directly consumers via food delivery services including GrubHub, DoorDash, Uber Eats, and Postmates. Our Grocerant Guru® asks, are you thinking business model and margins?

Robert Earl is a founder that has the entrepreneurial sprint stated "Food delivery has quickly become an everyday occurrence for many people, so I created Wing Squad as part of my Virtual Dining Concepts network,” ..“Wing Squad will be delivery only, which allows us to launch from a wide range of locations.  With this business model, the sky is the limit.”

Battle for Share of Stomach

The chain restaurant business model is evolving fast. Understanding the intersection of the consumers demand for fresh foods fast, technology, meals, and meal component mix & match complexities is Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Have your read his White Paper on: The 65 Inch HDTV Syndrome? Are you looking a customer ahead?

Does your business model look more like yesterday than tomorrow’s? Is your model based or consumer relevance of 1980, 1990, or 2005?  Are you garnering incremental year over year customers?

Success does leave clues.  Looking for success clues of your own? Foodservice Solutions® specializes in outsourced food marketing and business development ideations. We can help you identify, quantify and qualify additional food retail segment opportunities, technology, or a new menu product segment.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, www.Linkedin.com/in/grocerant/  or www.twitter.com/grocerant

Hot Dogs Go from Fast Food to Fast Casual at Crave

Success does leave clues and Hot Dogs are moving-up in 2020 as consumers seek new formats, food combos and footprints to shop, eat, drink and socialize according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Regular readers of this blog know that one of the best ways for a brand to extend its reach is with a unique partnership.  A partnership that is familiar yet creates a platform that can be differentiated from everyone else drives new electricity with relevance into brand messaging.

Samantha Rincione, the founder and CEO of CRAVE Franchising LLC stated “At Crave we always want our customers to have the freedom to make their meals their own. We have 20+ toppings that customers can choose from for their hot dogs and sandwiches. We felt that a self-serve beer wall was integral to our success, allowing customers to pick their own beer, wine or cider and have as much or little as they choose. PourMyBeer self-pour technology makes it easy and efficient so it’s a safe environment for families, parties and more. It allows them to taste and try what they like best and supplement their delicious BBQ or hot dog meal with the right beverage of their choice.”

Now that’s interactive participatory fresh food marketing that will edify Crave’s relationship with consumers specifically Millennials and Gen Z consumers looking for discover according to Johnson. PourMyBeer allows Crave’s guests to try any or all of their offered beverages in whichever quantity they prefer as they get charged by the ounce, self-pour also lowers the wait times – and for Crave, the technology lowers operating costs by saving on labor and wasted goods.

The founder and CEO of PourMyBeer Josh Goodman said:  “After getting to know the Crave team over the last few months, it's clear that our values and motivations are aligned… We want to help them and their franchisees crush it with our self-pour technology in 2020 and beyond." 

Background: Crave is a fast-casual BBQ and Hot Dog Franchise with a self-pour beer wall. The modern rustic interior is an inviting family-friendly atmosphere. One of the fastest-growing BBQ franchises in the US, Crave focuses on customer service and quality. With 20+ toppings to choose from the hot dogs can be made to a customer’s liking. The menu also features BBQ, Monster Pretzels, twice baked potatoes, desserts, and amazing sides. There are currently five operating units to end 2019, with a minimum of seven more expected to open in 2020. How are you driving growth, relevance and new electricity?

Johnson stated “that in my minds-eye the new electricity must be very efficient for the supply chain and includes such things as fresh foods, Online ordering, delivery, plant based foods,  sampling, toy’s, beer, developing brands, unique urban clothing, grocerant positioning, fresh food messaging, autonomous delivery, cashier-less retail, plates, glasses, cash-less payments, digital hand-held marketing.

All food and beverage retailers to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing fresh food and beverages that are portable, fresh, with differentiation that is familiar not different.  Does your retail path forward look more like yesterday than tomorrow? Why? This new partnership does all of that.

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 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

Battle for Share of Stomach

Do Chain Restaurants that Drive Growth Need to Buy Growth

By now most of you know that Yum! Brands, Inc, as has agreed to terms to buy Habit Burger Grill for approximately $375 million. That’s all fine and good if you want to keep doing what you have always done and doing it in the same way according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The simple fact is restaurants are losing customers.  Year over year restaurant customer counts for 2019 declined 3.1%. Grocerant niche Ready-2-Eat and Heat-N-Eat fresh food continues to drive growth in non-traditional fresh food outlets with sales up 9% during 2019 according to the team at Foodservice Solutions®.

Consumers are dynamic not static yet many restaurant chains like the formula, format, and footprint of their existing brands and would rather squeak and squawk raise prices to drive sales than evolve their business model. 

Rhetoric be dammed; rationalization is not justification for continue to do what you have always done.  It’s time that the restaurant sector admit that consumers are migrating from restaurants to other avenues of fresh food distribution for meals and meal components that are Ready-2-Eat or Heat-N-Eat.

Size and scale are legacy terms to rationalize and justify to those on Wall Street and their ilk that growth will come even if we have to buy it.  That may work for a while.  It won’t work for ever.  Is you brand looking ready to look for new non-traditional ways to drive top line sales and bottom line profits while garnering incremental customers?

Looking for success clues of your own? Foodservice Solutions® specializes in outsourced food marketing and business development ideations. We can help you identify, quantify and qualify additional food retail segment opportunities, technology, or a new menu product segment.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, www.Linkedin.com/in/grocerant/  or www.twitter.com/grocerant

Battle for Share of Stomach

Dickey's Barbecue Pit Tries Driving Customer Traffic with Kid’s Eat Free at What Cost?

January can be a very slow month for chain restaurants and most chain restaurants leverage price to drive customer back into the stores according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. Dickey’s Barbecue Pit is starting of a new decade by offering free delivery and extending its popular Kids Eat Free Sundays to every day during the month of January.

Laura Rea Dickey, CEO of Dickey’s Barbecue Restaurants, stated “With these offers, families can enjoy an easy, delicious meal in our home or theirs throughout January, all while sticking to their budget.” Guests can receive free delivery when they order online or through the Dickey’s App. Kids Eat Free is available at participating locations with any $10 dine-in adult purchase.

So, one of the classic traffic drivers for restaurants is the Kids Eat FREE promotion. It used to be found mainly in family style restaurants such as the IHOPs and Denny’s of the world, but now as guest traffic is down across all categories, you see more and more types of restaurants running a Kids Eat Free promotion. The question is, "Does it work?" The easy answer is, yes it works to drive traffic, but the better question is, "Is it right for my business?"

Free is a very good price, and will always bring people in to get the free food. Look at the lines out the door each time a national chain has a free food giveaway promotion. The problem is, just getting people in the door no matter what it costs is not why you're in business. Sure, you need customers, but you need to make a profit on those customers. Your ultimate job is to make money for yourself and your investors, not just drive guest counts.

The typical Kids Eat Free promotion has some strings attached so you can be guaranteed to recoup your food costs. Some restaurants require the purchase of a kid’s beverage in order to receive the free meal. Others require the purchase of a regular priced adult meal in order to receive the free kid’s meals. These requirements protect you from going into a negative transaction territory where you're actually losing money on the deal. There's also often there a limit on the number of children allowed per adult, usually 2 kids per adult meal purchased, so you don't get a busload of kids from the local camp and only sell one adult meal to their leader while you give away 27 kids meals.

A price-based promotion like this does not build loyalty. It attracts customers who are price sensitive, and without the low-price incentive to come in, they won't continue to keep coming. It's akin to your coupon customers. If they have your coupon in hand this week, they'll visit you, but if they have your competitor's coupon in hand next week, they'll visit them. I was involved with a chain that offered Kids Eat Free on Saturday and Sunday nights, two very slow nights for this chain. While we promoted Kids Eat Free, guest counts grew quickly, but as soon as we took it away the counts went right back down to their previous levels.

The other factor to consider is the length of time you're willing to offer this promotion. Many owners roll out the kid’s promotion as an immediate fix to low guest counts on a certain day or daypart. Once that fix starts working, the increase in guest counts is like a drug and you want more and more. If it worked for Tuesday, let's also offer it on Thursday. And at some point, you've devalued your product in your customer's eyes.

Why should I pay $5 for this kid’s meal today when it's FREE tomorrow? And if you keep the promotion in place for any length of time, your customers grow to expect it. There may be a backlash of angry customers when you decide that it's time to stop offering the promotion.

So, should you rollout a Kids Eat FREE promotion? If you do, go into it with a plan. Know what it costs you. Know how much growth you need to offset the food costs. Prepare a marketing plan because you have to tell the world about it, otherwise you're just giving away money to current customers. And make an exit strategy. Offer it for the summer or a certain period of time, to keep customer expectations under control, create some urgency, and keep yourself out of the situation where customers expect to have their Kids Eat Free at your restaurant forever.

Are you looking a customer ahead?  Will your year over year customer counts be positive for January 2020? Success does leave clues.  Is your brand extending it value to more consumers in 2020?  Foodservice Solutions®, Grocerant Guru® has customer focused ideations you can leverage.

Plant-Based Millennials Driving Change

Regular readers of this blog know that Millennials are in a constant state of food discovery.  Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® stated that discovery has resulted in an unprecedented trial and adoption of plant-based foods.

Non-Millennials may not be ready for plant-based foods that are now coming as mind-bending innovations for those of us that remember Wendy’s “Where’s the Beef” commercials.  Today, millennials are looking past beef at other option.   

A new poll from Charleston|Orwig worked with two research partners, Maeve Webster of Menu Matters and Confidential Consumer, polling across the United States has some finding you might enjoy.

Key poll findings:

·         More than 40 percent of those surveyed describe the concept of lab-produced or synthetic foods and beverages as “scary,” with no intention of adding them to their diets.

·         Conversely, more than half of the population is open to the idea of products created with new technologies.

·         Younger consumers, Gen Zs and Millennials, are significantly more willing to try synthetic foods. Only 26 percent of 18- to 34-year-olds called lab-grown items “scary” and said they’d be unwilling to sample compared to 46 percent of those over 55.

·         About 20 percent of younger consumers agree these types of products will help “save the planet” and that they are “cool” and the “future of foods/beverages.”

·         The number one concern, expressed by a third of respondents (33.4 percent), is a lack of understanding about the long-term health impacts.

·         One quarter of consumers (25.2 percent) expressed concerns about the healthfulness of these products compared with conventionally produced food.

·         Other top five concerns: lab-produced foods/beverages would not be better for the environment (21.6 percent); would not include natural ingredients (19.2 percent); and would lead to completely processed products (19.0 percent).

Reading this one might think that plant-based foods are more a ‘fad’ than trend.  That according to Johnson simply is not the case. Johnson says “consumers move forward and at times pause they don’t go backwards.” Look for 100% plant-based restaurant chains in 2020, new plant-based menu items, and legacy brands scrambling with plant-based foods to garner favor with Gen Z and Millennials.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit www.FoodserviceSolutions.us for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.

Battle for Share of Stomach