What's Simple for Dinner Grocerant Meals and Meal Components

 

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food continues to drive customer migration looking for a simple-solutions to the age-old question What’s for Dinner.

Steven Johnson speaking last week at the annual Foodservice Solutions® Grocerant Summit laid out some facts that can help food retailers from every sector better understand the demand for simple meals fast.  Johnson stated that 83.6% of all restaurant meals in 2022 are purchased from a fast-food outlet or drive-thru, simple meals fast.

So, how do Americans decide what to have for dinner when they want to go out to eat? The most common ways that people find somewhere to eat are on Google (76%), through word-of-mouth recommendations (64%), on Yelp (39%), and on social media (30%).

When asked where Americans get dinner, most (77%) commonly eat at home or cook for themselves. 50% say they regularly get takeout or pick up, 31% say they go to restaurants, and 3% say they use a meal subscription box.

39% of consumers say they’re loyal to certain retailers because of specific prepared foods. 35% of retail foodservice consumers wait two to three hours to eat their food, and 21% wait 24 hours or more, according to Technomic’s U.S. Retail Foodservice report

No. 1 factor that consumers say would prompt them to purchase from retail foodservice is that the food looks good, and 27% of consumers say that fresher grab-and-go options would encourage them to make repeat purchases from a store’s prepared foods section. No. 1 breakfast item is a breakfast sandwich/wrap, with 42% of consumers saying they’d purchase.

Consumer Trend Report, 92% of consumers said they expected to maintain or increase their purchases of grab-and-go items in the near future

Grocery stores are capitulating customers to nontraditional fresh food channels of distribution.  They need help and FreshRealm just might be the company to help them.

According to FreshRealm, “persisting inflation coupled with work-from-home flexibility means consumers are eating at home more than ever across all day parts. Nearly 40% of Americans are opting for one to three prepared or semi-prepared breakfast and lunch options each week,1 and almost a quarter of shopper’s report paying more frequent visits to the fresh meals section of their grocery stores since the pandemic began. With consumers seeking at-home meal options that are fresh, delicious and convenient, retailers have an opportunity to capture valuable share-of-stomach with fresh prepared meal offerings.

So, as retailers look to capitalize on evolving consumer behavior by expanding their fresh prepared meal offerings, a deterrent may be skyrocketing labor costs and decreasing labor availability. In-house assembly requires costly labor commitments from employees across functions and levels—from store teams that assemble, package and stock meals; to planners that develop and source innovative recipes; to marketers that merchandise offerings across channels. Cost aside, with labor shortages continuing to plague the grocery industry, an undertaking that demands such heavy labor involvement may not be feasible.

Third-party partners present a compellingly cost-effective savings opportunity for grocery retailers facing the high-cost barriers of expanding fresh prepared meal offerings. A recent cost model comparison from FreshRealm found that retailers can save up to 40% when they choose to source fully prepared ready-to-cook and ready-to-heat meals from a third-party partner rather than assemble in-house. And the cost savings doesn’t stop with retailers—the Suggested Retail Price for the FreshRealm meal was 17% less than the meal made in-house, bringing cost relief to shoppers conflicted with the struggle of rising food costs, too. Retailers can then provide more variety and lower costs to consumers while driving foot traffic.

With the company’s wide array of fresh ready-to-eat, ready-to-heat, and ready-to-cook private label and branded meal solutions, Fresh Realm is uniquely positioned to offer a personalized solution that addresses every retailer and consumer need. 

Ready to start saving? FreshRealm is working with grocers nationwide to create fresh prepared meal in-store destinations. Visit FreshRealm.com for a full look at the company’s range of ready-to-heat, ready-to-cook and meal kit solutions that are helping retailers and consumers save when they need it most.”

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® 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: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

All Food Retailers Need to Focus on or Pay Attention to SNAP

At the intersection of What’s for Dinner and Food Sales is the United States Department of Agriculture SNAP Program.  So just what is SNAP: SNAP provides nutrition benefits to supplement the food budget of needy families so they can purchase healthy food and move towards self-sufficiency. Focus o

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, stated, “all food retailers need to understand how the SNAP program can or could help them drive top-line sales and bottom-line profits. That includes Restaurants, Convenience Stores, Grocery Stores, Dollar Stores, and Bodegas.”

First did you know that overall, SNAP consumers account for nearly one-quarter (24%) of total CPG spend, and are more likely to have children, live in urban areas and be in the bottom 30th percentile in purchasing power compared to non-SNAP consumers. 

In case you did not know, Numerator, a data and tech company serving the market research space, has released its latest report—Helping SNAP Consumers During Economic Headwinds—which examines the full impact of the Supplemental Nutrition Assistance Program (SNAP) on modern consumers through the analysis of verified purchases by SNAP recipients. Overall, SNAP consumers account for nearly one-quarter (24%) of total CPG spend, and are more likely to have children, live in urban areas and be in the bottom 30th percentile in purchasing power compared to non-SNAP consumers. Here are more findings:

Consumer Behavior & Sentiment Findings:

·         SNAP recipients represent a diverse group of consumers. 61% of SNAP recipients are in the bottom 30th percentile in terms of purchasing power, 45% have children (compared to 28% of non-SNAP households), 29% have 5+ members in their household, and 37% are Gen Z or Millennial. Compared to non-SNAP households, SNAP households are twice as likely to be Black/African-American or Hispanic/Latino. 

·         Economic uncertainty affects SNAP households more severely. 79% say their financial situation is the same or better compared to the prior year, but 1 in 5 SNAP households say they are overwhelmed with financial burdens and 56% are concerned about job stability (compared to 31% of non-SNAP recipients). 

·         Even with government assistance, SNAP recipients feel food insecurity. Over 1 in 4 SNAP consumers (26%) say they are unable to buy enough food to feed their family. 

·         Health issues and healthcare costs are significant concerns. SNAP consumers are 3.8x more likely to be disabled, and they are 56% more likely to be not actively managing their health, compared to non-SNAP consumers.

·         Utilization of SNAP during a shopping trip results in larger purchases. When SNAP consumers utilize their benefits during a shopping trip, basket size is $15 more, spend per trip on groceries is almost $18 more, and units per trip double (from 5.2 to 10.4).

·         SNAP recipients are disproportionately spending more per unit. In the latest quarter ending 12/31/2022 compared to YA, SNAP consumers are paying 13% more per unit, compared to 11% more for non-SNAP consumers – driven by increased inflation on baby and health & beauty products that SNAP consumers over-index on, as well as in the Dollar channel.

·         To save money, SNAP recipients are pulling back on snacks. Units purchased per household are down significantly in snack categories such as popcorn (-23.6% vs YA), meat snacks (-18%), and snack seeds, nuts & trail mixes (-15.9%).

·         Trading down to private label helps to reduce the sting of inflation.  Although unit sales are down, Walmart, Aldi and Kirkland private labels are outperforming branded CPG. For example, Great Value unit sales are down 4% vs YA, compared to branded unit sales dropping 20%.

·         Affordable luxuries like personal care items have not seen a pullback on spending. Categories such as toothbrushes (+6.3% units per household vs YA), beer (+4.6%) and face makeup (-0.5%) are holding their own or growing with SNAP consumers.

·         SNAP consumers vary their shopping locations. SNAP consumers are 56% more likely to spend their CPG dollars at Dollar stores, 24% more likely at Convenience stores, and 12% more likely at Mass retailers (compared to non-SNAP consumers). 

·         Regional and ethnic grocery stores are winning SNAP household trips because of their lower price increases. Among the retailers growing trips with SNAP households are H-Mart (42% of projected trips), Market Basket (42%), Whole Foods Market (36%), 99 Ranch Market (35%), and Wegmans (31%). 

·         SNAP consumers are 37% more likely to eat out four or more times per week, but they are moving food trips back to stores. As SNAP recipients pull back on dining out, Starbucks, KFC, Burger King and Little Caesars are seeing the most lost trips.

·         More inclusive grocery delivery services would benefit consumers and retailers. 20% of SNAP recipients say they wish that grocery delivery services made it easier to utilize their program benefits. Currently, 12.9% of SNAP consumers use Walmart+, followed by DoorDash DashPass (5%), and Albertsons Freshpass (4.3%). 

About Numerator:

Numerator is a data and tech company bringing speed and scale to market research.  Numerator blends first-party data from over 1 million US households with advanced technology to provide 360-degree consumer understanding for the market research industry that has been slow to change. Headquartered in Chicago, IL, Numerator has 2,000 employees worldwide; 80 of the top 100 CPG brands’ manufacturers are Numerator clients.

Who are you selling to today?  Where can you be selling food tomorrow and to whom?

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® 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 us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter 

Grocery Stores and Restaurants Continue Battling for Share of Stomach

 

In the continuing battle for share of stomach the consumer continues to migrate with the food price, value, service equilibrium according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The formula for the price, value, service equilibrium continues to evolve success was: Price + Quality + Service + Portability = Value.  That formula has evolved with Gen Z and Millennials today.  Foodservice Solutions® Grocerant Guru® has once again retooled, reevaluated, calculated then evolved the formula and here is the new formula:  Price + Quality + Social + Portability = Value.

Currently, price is top of mind for most consumers. That said Consumer Price Index for February indicated a narrowing of the gap between grocery and restaurant prices, the Bureau of Labor Statistics reported last week.

So, the index for food at home, mostly groceries, rose 10.2% over the last 12 months, and the index for food away from home, mostly restaurants, rose 8.4% over the past year. The index for full-service meals rose 8% over the last 12 months, and the index for limited-service meals rose 7.2% over the same period.

Mark Kalinowski of Kalinowski Equity Research, stated, “With grocery prices continuing to rise at a faster rate than restaurant prices, and with commodity-cost inflation remaining a huge challenge – coupled with what has been so far fairly manageable consumer resistance to menu price increases,” …“we expect that U.S. restaurants will continue to raise menu prices at a meaningfully higher-than-historical-average rate during the first half of 2023, if not for longer.”

Here is the good news for restaurants.  The Consumer Price Index data showed the gap between groceries and restaurants narrowed in February from January, when food at home rose 11.3% and food-away from home was up 8.2% in the past year.

Kalinowski added, “The 1.8 percentage-point difference between food-at-home’s 10.2% and food-away-from-home’s 8.4% nevertheless remains one of the widest gaps in 40-plus years... “However, on a monthly basis, it is 370 basis points less than the 5.5 percentage-point gap witnessed for July 2022 and August 2022. We expect the gap to continue to narrow over the next six to 12 months, meaning that the current advantage for restaurants is likely to dissipate in the not-so-distant future.”

Ron Ruggles of NRN reported, “Noah Hayes, general manager for the U.S. and Canada at Deliverect, a global software-as-a-service company for online food-delivery management, said in a statement:

“Inflation is dominating the conversation in every industry and according to the Bureau of Labor Statistics, consumer prices rose 6% for the year ending in February,” Hayes said. “With the food index increasing 0.4% over the month and 9.5% year over year, consumers have felt the impact.”

Consumers “undoubtedly” are increasing their consciousness of spending, he said, adding that restaurants can automate tasks and optimize menu pricing.

“While finding ways to boost profits and reduce costs will be imperative for the bottom line, restaurants should continue offering competitive wages to recruit and retain staff,” Hayes said. “A happy team and operationally savvy kitchen is the winning recipe when it comes to offering a high standard of service to customers.”

Consumers are time starved, looking for meal solutions.  They are looking for grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared meals according to the team at Foodservice Solutions®.

Invite Foodservice Solutions® to complete a 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

In a Battle For Share of Stomach

You Can WIN!

Grocery Stores Welcoming ChatGPT are You

 

Do you have junior high school children or high school kids?  If not, you may not know what ChatGPT is.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, ChatGPT is a ChatGPT is a “natural language processing tool driven by AI technology that allows you to have human-like conversations and much more with a chatbot. The language model can answer questions, and assist you with tasks such as composing emails, essays, and code.” Simply put your kids can ask it a question using their own voice and it gives them the answer.

While junior high, high school, and college students are using ChatGPT to write papers, get answers to test questions, the rest of us are trying to figure a way to leverage this technology to help customers while saving our companies money. 

A new survey indicates that grocers are jumping on the AI trend and ChatGPT. A new survey of grocery retailers indicates that grocers are ready and willing to experiment with ChatGPT, the chatbot AI technology being rapidly adopted across many industries and companies.

So, the survey, is from grocery data company Grocery Doppio, insights firm Incisiv, and digital commerce and fulfillment solutions Wynshop, polled grocery industry executives, shoppers, and additionally pulled in shopping data. 

In addition to asking about AI in grocery, the survey further touched on digital basket size increase and decline of third-party share of sales.

Key findings from February’s “State of Digital Grocery Performance Scorecard” include:

·         67% of grocers say they have discussed ChatGPT at senior level meetings

·         82% of grocers consider AI a necessity to remain competitive in the future

·         59% of grocers will test an AI solution in 2023, while 13% will spend non-budgeted funds to do so

Grocers believe that AI will have the greatest impact on inventory forecasting, supply chain management, and pricing/promotions, while ChatGPT/large language models will affect customer service, product discovery, and store associate tools. 

Yes, there is more, additional highlights include: 

Digital basket size grew, even as digital’s share of market slipped 

·         Compared to February 2022, digital basket size grew 47.2%, representing an average of 5 items more

·         Digital sales saw 2.1% growth from $9.6 to $9.8 billion between February 2022 and February 2023, but digital’s share of the total grocery market slipped from November 2022’s high of 17.1% to just 13.8% in February

Third-party providers continue to lose market share

·         Grocery sales through third parties fell to $1.8 billion in February 2023, down from $2.7 billion in February 2022 and $1.9 billion in January 2023

·         The balance of digital grocery sales were taken by grocers’ apps (5.9%), and grocers' websites (75.8%)

Share of grocery pickup sales continues to rise

·         Curbside/pickup sales grew by 8.3% from February 2022 to February 2023, rising from $4.8 billion to 5.2 billion, YOY

Gaurav Pant, chief insights officer of both Incisiv and Grocery Doppio, stated, “ChatGPT has taken the world by storm, and grocers are no exception,” ... “Grocers acknowledge they need advanced analytics and AI and are willing to experiment and invest in building those capabilities. Those that focus on high-impact use cases like inventory optimization or can figure out a better search and recommendation experience using LLMs have a chance to leapfrog their peers.”

For international corporate presentations, regional chain 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 GrocerantGuru.com, FoodserviceSolutions.US or call 1-253-759-7869

Food Sales Contraction Are You Prepared

 

The fight for share of stomach has evolved into a battle for available food dollars.  Restaurants, grocery stores, convenience stores, and dollar stores are all focused on the shrinking disposal income a family allots for meals. 

It is at the intersection of higher prices, the 65 Inch HDTV Syndrome, and food retailers price value service equilibrium we find the fight for each consumer according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The team at Foodservice Solutions® completed the first round of 2023 Grocerant ScoreCards and they continue to indicate that at the intersection of the consumer, technology, and retail food sales we find the grocerant niche creating and expanding points of quality food distribution.

It is at that intersection that Foodservice Solutions® Grocerant Guru® identified one consistent universal commonality driving consumers buying pattern changes with the latest Grocerant ScoreCard finding that 84.1% of meals served at home include at least one Ready-2-Eat or Heat-N-Eat fresh food meal component. 

Johnson calls it and extension of the “The 65 Inch HDTV Syndrome that he identified, quantified, and qualified back in 2012.

In case you are a new reader of this blog, the grocerant niche is the result of the blurring line between restaurants, grocery stores, convenience stores, and drug stores all selling fresh prepared, portable, convenient meal solutions.  Targeted at the time-starved consumer with Ready-2-Eat or Heat-N-Eat fresh prepared food components that are perceived “better for you”, and portioned for one or two. Consumers like the Convenient Meal Participation, Differentiation, Individualization / Family Customization that these retailers offer.

Inflation has caused incremental disruption in consumers spending on meals and meal components. The old formula for the price, value, service success was: Price + Quality + Service + Portability = Value.  That formula has evolved with Gen Z and Millennials today.  Foodservice Solutions® Grocerant Guru® has once again retooled, reevaluated, calculated then evolved the formula and here is the new formula:  Price + Quality + Social + Portability = Value.

Is your company looking a customer ahead.  Are you, looking a customer ahead?  Do you understand just how the price, value service equilibrium is evolving? Foodservice Solutions® Grocerant Guru® asks how are you evolving the Price, Value, Service Equilibrium?

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® 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 us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter