Today Digital Transformation Fuels Grocery and Foodservice Innovation

 

More Than 90% of Shoppers Now Buy Groceries Both In-Store and Online—Restaurants, Convenience Stores, and Service Delis Must Adapt

The food retail landscape is rapidly evolving, and digital engagement is driving a fundamental shift in consumer behavior. FMI—The Food Industry Association and NielsenIQ (NIQ) have released their latest report, Digital Engagement Transforms Grocery Shopping, revealing that over 90% of shoppers now purchase groceries both in-store and online. This shift underscores the importance of omnichannel strategies for grocers, restaurants, convenience stores, and service delis as they navigate a marketplace where digital accessibility is no longer optional—it's essential for survival.

Digital Sales Surpass Expectations

Back in 2017, industry experts projected that online grocery sales would reach $100 billion by 2025, capturing 20% of market share. However, this year’s report finds that those expectations were shattered, with U.S. online grocery sales now expected to hit $388 billion by 2027, accounting for nearly 25% of total grocery sales. This growth is largely fueled by e-commerce platforms, retailer apps, and AI-driven personalization, alongside increased consumer reliance on convenience-driven food solutions.

The Grocerant Movement and Foodservice Digital Expansion

The rise of online grocery shopping has broad implications for the restaurant, convenience store, and foodservice industries, reinforcing the need to integrate fresh, ready-to-eat, and prepared meal solutions into digital channels according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Key Industry Takeaways:

·         Restaurant Meal Delivery Continues to Surge: With nearly 60% of consumers ordering meals for delivery at least once a week, restaurant operators must enhance their digital presence, ensuring seamless online ordering and integration with third-party platforms.

·         Convenience Stores Go Digital: C-stores must expand their food offerings beyond impulse purchases by leveraging mobile ordering, loyalty apps, and digital marketing to promote fresh-prepared meals, snacks, and beverages.

·         Service Deli Online Expansion: Grocery store delis, a critical component of the grocerant movement, must extend their presence online, offering pre-ordering, meal kit options, and prepared food solutions to compete with quick-service restaurants.

·         Curbside Pickup and AI Integration: The report finds that curbside pickup (31%) now surpasses same-day home delivery (29%) as a preferred option for online grocery shoppers. Grocers and foodservice operators must refine their operations to optimize pickup experiences and use AI-driven personalization to meet evolving consumer expectations.

Social Media’s Influence on Food Purchases

One of the most striking trends in the report is the rise of social commerce. Fifty-five percent of respondents now make direct purchases from social media platforms, including meal solutions, grocery staples, and foodservice options. This signals a growing need for food retailers and service providers to invest in targeted digital marketing strategies, influencer collaborations, and AI-enhanced personalization to engage the next generation of shoppers.

The Future of Food Retail: Meeting Consumers Where They Are

Digital engagement is no longer a side strategy—it’s the driving force behind food retail’s evolution. Restaurants, convenience stores, and grocery service delis must embrace this transformation by integrating digital ordering, enhancing meal delivery options, and ensuring a frictionless online-to-offline experience.

As food consumption patterns continue to shift, industry players must prioritize digital connectivity, personalization, and service-driven solutions to stay ahead. The Digital Engagement Transforms Grocery Shopping report makes it clear: omnichannel innovation isn’t just a trend—it’s the future of food retail.

Stay Ahead of the Competition with Fresh Ideas

Is your food marketing keeping up with tomorrow’s trends—or stuck in yesterday’s playbook? If you're ready for fresh ideations that set your brand apart, we’re here to help.

At Foodservice Solutions®, we specialize in consumer-driven retail food strategies that enhance convenience, differentiation, and individualization—key factors in driving growth.

👉 Email us at Steve@FoodserviceSolutions.us
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Food Retailers Struggle as Consumers Eat Cheap

 

Look around do you see a lot of skinny people walking around? In fact, Over the five years to 2023, IBISWorld estimates that the obesity rate among adults aged 18 and older has increased an annualized 1.2% to 32.74 people per 100 individuals.

That said, Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® recently stated at the annual Grocerant ScoreCard study found that “consumers are leaving brands for a similar product at a cheaper price.  Fast food offers the most pricing flexibility at meal time, and by day of the week.  The grocery store is now considered burdensome as it consumes more time, simply put, it cost more to cook, for a family of one or two than going out to a fast-food outlet.”  

 

There is new data also indicates that one-in-five consumers say they are now starting to pay for groceries in installments or payment plans in order to be able to afford essentials. 

Still, the Circana report shows that over the past year, 86% of meals were sourced from home and 14% from food service, which is still up from the pre-pandemic 84% home/16% food service split. Additionally, the data says that meals at home are less expensive, with food service meals costing more than four times what at-home meals do.

While it may look like declining volume sales might mean less consumption, the report shows that consumers are not eating less. And the volume shift is not a one-for-one exchange between retail and food service. While retail unit volumes are declining, they remain higher than pre-pandemic, and food service volume is increasing due to pockets of robust growth, while other areas lag behind.    

Do you want a 

Larger Share of Stomach?

Instead, the report findings show that 31% of shoppers are switching to a lower-cost brand more often, with shoppers additionally looking for more coupons (either paper or online), more often. 

Along the same lines, FMI just released its private label spending report which contains similar results, with some 96% of grocery shoppers purchase store brands at least occasionally; 46% purchase private brands most or all of the time; and an overwhelming 90% of shoppers said they are likely to continue buying private brands. 

The Circana report also showed that consumers are looking for more sales (53%) followed by cutting back on non-essentials (46%). In addition, they are more focused on less waste; 41% are more conscious of using fresh foods before they go bad, and an additional 39% use leftovers more.

Despite lower unit sales, the average U.S. household makes +10 more trips annually to retail for food and beverage than two years ago, but again total basket spend is down at only +0.5% vs. July 2022.

 

TOP TAKEAWAYS

·         94% of consumers report concern with the cost of food inflation

·         Food inflation is high, still up an average of 20% from 2019 

·         86% of meals are sourced from home and 14% from food service as of the close of 2022, still up from the pre-pandemic 84% home/16% food service split

While food inflation is still high (up an average of 20% from 2019), it isn’t translating to consumers eating less, but rather more and more are continuing to trade down and buy more private label products to keep their costs down, according to a new report from Circana.

Consumers, especially those at poverty levels, have been hit especially hard by inflation this past year. In March, the federal government eliminated extra Supplemental Nutrition Assistance Program (SNAP) benefits nationwide, a benefit that had been left over from increased pandemic assistance. 

In April of this year, households sourcing meals from food banks then increased by 15% vs. the prior year, according to the Census Bureau.

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

Foodservice Customers Pick Price Over Convenience and Experience

 

If you do not think that the price of your food matters you are wrong.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, ho stated, “the price, value, service equilibrium is evolving faster than the wholesale prices the foodservice operators are experiencing.”

Now, according to Mintel, 51 percent of Americans say they are currently concerned about the future of the economy. A same time, a similar share (48 percent) feel confident their financial situation will improve in the next 12 months. That is the good and the bad news. 

Let’s see what Mintel found by digging deeper, nine in 10 consumers (94 percent) say they are currently worried about inflation, and 67 percent believe the majority of Americans share in these concerns, while a third (34 percent) believe it's other Americans — rather than themselves — who are financially struggling right now. Meanwhile, 22 percent of Americans overall, and 31 percent of parents, say they are struggling to cover day-to-day expenses.

Inflationary pressures are driving consumers to cut back on nonessential purchases (40 percent) and dining out (37 percent), said the research firm.

Do you Want to Build Top Line Sales

Remember PRICE Matters

Do you Want To Grow Share of Stomach

Lisa Dubina, associate director of Culture & Identity, at Mintel, stated, "Americans' heightened concern about the country's economic future — which greatly exceeds all other surveyed financial concerns — is likely due to the current laser-sharp focus on this topic across news media, the political arena and among business leaders,".

Dudina continued, "While not all consumers consider themselves financially struggling at this time, many are already adjusting their shopping behaviors regardless of their level of financial comfort," ... "To support struggling and concerned consumers, brands need to find creative ways to demonstrate the value of their products and services and tangibly reward customers as a way of building brand loyalty and repeat business."  Here is more from Mintel:

Generational Differences

According to Mintel, age and current life stage affect consumers' greatest financial concern. Consumers aged 55 to 64 are more focused on big-picture concerns including the overall well-being of the economy and their personal retirement savings.

Conversely, Gen Z consumers (18 to 24), are more concerned with their own short-term financial well-being: maintaining their current standard of living, ability to pay their bills and ability to afford day-to-day necessities.

With these concerns in mind, Dubina pointed out that brands will need to consider these key differences to resonate with each generation.

Price Over Convenience & Sustainability

The research firm also pointed out that consumers are willing to pay more for higher quality; however, there's little else they prioritize before lower prices. More than six in 10 consumers prefer lower prices over a convenient shopping experience, and 57 percent say they prioritize lower pricing over sustainable brand options.

Additionally, 63 percent of consumers say that brand name is not important to them when shopping most categories, yet 59 percent of people agree they'd rather pay more for a higher quality product than pay less to receive average quality.

"As consumers struggle to adapt to rising prices due to inflation and product shortages, they are likely to continue choosing the best price over the more sustainable and more expensive option," Dubina said. "Understanding that now is a difficult time for retailers to offer more discounts due to challenges like supply chain issues and the rising price of labor cutting into profit margins, offering creative perks and benefits to customers can increase the value of purchases and help build long-term customer loyalty.

"Now more than ever, it's important for brands to not only communicate the value of their products and services but also prove it to consumers who are increasingly looking to avoid financial risk or waste," Dubina added.

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

Takeout Food, Restaurant Kiosk Takeaways, Delivery of Grocery Deli Food is Everywhere

 

There are times we must remind followers of this log that this blog focus is on our specialty: GROCERANT Food & Beverages.  Grocerant niche food and beverage meal component options are a result of the blurring of the line between restaurants, grocery stores, C-stores, Dollar Stores, and Furniture stores (Ikea) aimed at the time-starved consumer with Ready-2-Eat and or Heat-N-Eat fresh prepared food components that can be bundled into either personalized meal or customized family meal.

However, around the world we continue seeing sections in department’s stores, kiosk in malls, virtual food retail brands being offered.  The food items can range from entrees to side items, desert, and snacks. 

Today while restaurant, grocery takeout and mobile apps simply the required platform, food marketers are garnering new customers via virtual restaurants, ghost kitchens, voice ordering and robot delivery according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

(Note for those who have forgotten: it was Johnson who was first too coined the term Grocerant and be published in trade magazines back in the day including Restaurant Business and Nation’s Restaurant News.)

Blurring the lines between retail food channels even more drive for convenience in fresh prepared food has never been higher nor is showing any signs that this sector is anywhere near a top according to Johnson and the team at Foodservice Solutions®.

Millennials have blurred the line so much that believe that ‘Eating-Out means Eating-In at home. Gen Z and Millennials want to order from restaurants how they want to, when they want to. It's one factor driving the proliferation of technology in restaurants right now.

The smart phone ushered in a new wave of now consumer relevant technology, the extent to which guests are embracing that technology, and asking for more, is still pretty surprising. It has empowered food marketers the ability to build virtual branded food outlets aka a restaurant not on s surface street but rather in the palm of the consumer’s hand.

While that informational smart phone virtual super highway continues to expand a recent survey of 1,000 Americans by consulting firm Deloitte takes stock of consumer habits around things like delivery and digital ordering as well as more advanced technologies like voice ordering and automation.

Here are five key takeaways from the study.

Customers are ordering more takeout than ever. Fears that pickup and delivery might fall off as dining rooms reopened appear to have been greatly exaggerated. According to Deloitte, customers are ordering takeout more often than they were in the thick of the pandemic—by a lot. More than 60% of respondents said they order delivery or takeout once a week, up from 29% a year ago and 18% before the pandemic.

QSRs are the most popular takeout destinations, with 62% saying they order fast food most often, followed by fast casuals (52%) and casual-dining concepts (40%). 

Meanwhile, ghost kitchens have officially entered the consideration set. Nearly 80% of respondents said they're likely to order from a ghost kitchen, 20% more than last year and 32% more than two years ago. 

Apps are in-demand, both off-premise and on. When ordering takeout, 57% of consumers said they use a mobile app, which is only a little higher than last year's figure of 54% and not all that surprising. What is surprising, though, is the number of guests who said they would order digitally from inside a restaurant. Nearly two-thirds (64%) prefer that method when dining in, compared to 53% who did last year. 

Customers want to order direct. Diners' preference for using a restaurants' own channels vs. a third-party aggregator has been well-established, and is underscored by the Deloitte study. Forty percent of customers opt to order through a restaurant's app or website, while just 11% prefer to order through a third party.

Customers welcome more automation. A vast majority (81%) would order from an automated voice system in the drive-thru, Deloitte found. The amount who would be willing to have their food delivered by a robot or drone is up by 10% over last year. And 54% would be OK ordering from a partially or fully automated kitchen. Most of these technologies are just getting off the ground, but the demand is clearly there.

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 us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter