Penny Wise 185 Million Pounds Sterling short Real Mex not so Real or Relevant

The popular definition of insanity is “doing the same thing over and over and expecting a different result.”  This sums the mind-set of many legacy chain restaurants operators today. (Guest Blogger Bill Cross)

The bankruptcy of Real Mex (whom the Grocerant Guru® and I offered to help years ago with their retail operation, and which my company tried to help a few years after that when I colleague came over there from another client) shows the bankruptcy of the restaurant and private equity way of thinking. Restaurants act as if the go-go-go 2000s are coming back, when consumers were eating out more than at home for the first time since records were being kept.

So that mind-set got Real Mex nearly $42 million in first lien debt, meaning it gets paid first in a bankruptcy, and $195 million in second lien debt most of which will never be paid back. I your company closing stores, are you reducing you menu, reducing your inventory, and reducing the number of managers in a store?  If so those are clues you might be on the same track as Real Mex.

Today’s food marketplace is so very different from then: EVERYONE sells food these days, and you can even get complete meals delivered to your home. Packaged foods have improved lightyears over the old TV dinners I grew up with, and better-for-you options are flooding the country. Yet many chain restaurants pretend they don’t need to compete, not just with other restaurants, and not even with other foodservice vendors, but EVERYONE. If you’re looking for success clues, that is one of them.

 What’s the answer? Don’t think about channels, or service, think about MEAL OCCASIONS. Consumers are hungry and aren’t asking themselves “should I eat fast casual, casual, fast food, white tablecloth or take out?” They don’t stand in supermarket aisles and ask themselves “do I want to buy this package of Tony Roma’s ribs or go to Tony Roma’s tonight and eat out?”

They are four different meal occasions. If you don’t get that, then you’re just repeating the same old (failing) mistakes expecting a different result. Don’t let you legacy restaurant brand practice brand protectionism of the 1980’s, 1900’s or 2000.  If you do your brand will look more like yesterday that today or tomorrow.

Looking A Customer Ahead drives top line sales and bottom line profits, year over year sales increases, and incremental customer counts.  Do you need outside eyes to drive inside results? If so contact:

Bill Cross is SVP of Business Development for Broad Street Licensing Group, the global leader in taking restaurant brands to retail. www.bslg.com or

Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® www.FoodserviceSolutions.us

Are you prepared to with the Battle for Share of Stomach or share of Dollars?

What’s for Dinner? Fast Fresh Flavorful Grocerant Meal Components

The traditional line between retail foodservice sectors continues to shrink.  Today grocery stores struggle to sell food to fill consumer’s pantry while restaurants struggle to fill seats.  What continues to drive retail foodservice sales in every sector of retail are meal components comprised of fresh prepared food according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Today’s customers focus on convenience has elevated fresh prepared meal components that can be mixed and match into a customized family meal into a retail platform of food industry disruption. It’s at that intersection of disruption that the team at Foodservice Solutions® was first to identify, quantify, and qualify the Grocerant Niche. 

In fact as regular readers of this blog know Steven Johnson came up with the name grocerant and was first to publish it in Nation’s Restaurant News in 1996 in an article title ‘Call Them Grocerants”.

The fact is online shopping is convenient but a side-show in forecasting demand for What’s for Dinner.  Online shopping has become the bases for big bulky ‘family sized’ items the ilk of Dippers, Toilet Paper, Paper Towels, Cases of Beer.  While dinner more and more is ordered, pick-up, pick-out, or delivered comprising fresh prepared meal components one meal at a time according to Johnson.

Yes, online grocery shopping is expanding as Nielsen & FMI report with 65% of Millennials saying they have bought groceries online, 55% of Gen X, and 41% of Boomers.  However Foodservice Solutions® Grocerant ScoreCards indicate that the frequency grocery shopping online drops off as orders are getting bigger bulky items increases and fresh prepared food become more and more a mainstay for the family dinner.

Nielsen predicts that by 2022 four short years from now online grocery sales could reach $100 billion in sales, representing about 20% of all groceries sold. What that indicates to those conducing our Grocerant ScoreCards is that there will be an incremental increase of 24% in demand for grocerant meal components over the same period.

Were are not saying that the pantry is dead but ask Millennials what they have in their pantry and 9 out of tem will provide you a list of 8 eight or less.  Who needs a pantry for meal items whey there are 29 restaurants for every traditional grocery store in the US and fresh meal components can be found at retailers the ilk of IKEA, ABC Liquors, and Costco.

Companies the ilk of Kroger, SuperValu, and  Walmart have missed the mark there continues to be time and consumer demand that they could make a stand in new areas the ilk of meal kits and meal component mix and match bundling.

Consumers have blurred the line as they are no longer looking to fill a pantry rather they want to set the table with fresh prepared food.  This is a very competitive business, retailer from restaurants including fast food, fast casual, and casual dining outlets and grocers from Wegmans, HEB, Safeway and Kroger all in the hunt for a larger share of stomach. So What’s for Dinner?  Grocerant niche Fresh Prepared food.

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how www.FoodserviceSolutions.us can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Yum Brands Consolidated Catering Platform

Success does leave clues and regular readers of this blog know that Steven Johnson, our Grocerant Guru® at Tacoma, WA based Foodservice Solutions® has been speaking highly of YUM! Brands and Greg Creed since 2015 as Yum Brands has been evolving with consumers, address grocerant niche customer migration and taking positive action steps.

Regular followers of this blog also know that Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® thinks there is one dominate element that will power success within retail foodservice over the coming years.

 Johnson calls it the new electricity that is partnerships specifically strategic partnerships.   The new electricity must be very efficient for the supply and includes such things as fresh food, sustainable packaging, local beer & wine, urban farming (produce, seafood, etc.), autonomous delivery, cashier-less retail, cash-less payments, digital hand held marketing. Yum Brands GrubHub partnerships is all of that.

Food companies the ilk of Restaurants Supermarkets, Conveniences Stores, Dollar Stores, and Department Stores selling food that want to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing Ready-2-Eat and Heat-N-Eat fresh food.  That will require brands to embrace new fresh food partnerships more now than ever before according to Johnson.

In a move to garner incremental customer relevance across all of Yum Brands banners CEO Greg Creed  made a power move in fast food’s delivery this week announcing an expansive U.S. partnership with third-party giant GrubHub. 

Partnerships that work are good for both companies first KFC and Taco Bell’s ability to offer online ordering,” in all existing GrubHub markets is a win for both brands.  However with a $200,000 Million Dollar investment into GruHub clearly the partnership begins with plenty of respect on both sides.  The cash inflow will allow GrubHub the ability to build out new markets for expanded delivery service with building restaurants waiting for the taking. 

Close to y half of YUM!’s 45,000 restaurants already offer pickup and delivery via online ordering. Greg Creed, CEO of Louisville, Ky.-based Yum, said KFC delivery is being tested in several markets, citing Indianapolis, Ind., Louisville and Omaha, Neb.

What GurHub and Yum Brands have done is take legacy delivery programs and integrate a platform for branded consolidated catering to be offered market by market.  Yum Brands consolidated catering program now has Take-Out, Online-Line Ordering, Mobile Ordering and Delivery.  Today Yum Brands marketing strategy looks more like tomorrow than yesterday.  What does your marketing strategy look like Yesterday, Today or Tomorrow?

Once Greg Creed shows he understands the mind-set of the grocerant consumers and he is doing all the right things according to Johnson. Proof YUM! is purchasing $200 million of common GrubHub stock, enough said. What’s under your catering umbrella, yesterday’s tactics or tomorrow’s strategy?

Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit www.FoodserviceSolutions.us for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.