Ron Paul Rest in Peace, you spent a Lifetime Standing tall in Foodservice.

 

If success leaves clues Ron Paul Founder, CEO, and President of Technomic has left many for all of us to follow.  His legacy of successful tutelage will continue providing information services, consulting to retail food manufactures, chain restaurants, food marketing companies, equipment manufactures, and Grocerant consulting companies. He may be gone now but he will never be forgotten.    

When it came to understanding the big picture, Ron was the best.  From food industry manufactures to defining every niche in the restaurant industry.  Ron understood niche relationships and the how to assist each focus on the consumer. 

His contributions have contributed to the success of more companies than I can count.  Ron Paul was an industry supplier of Fact Based information that has help drive QSR sales alone from 2 billion when he started to over $ 387 billion today.

While Ron and Technomic were early to focus on the Home Meal Replacement niche as industry focus shifted so did Technomic. However, with his tutelage, encouragement and prompting, I dug in and thus evolved the grocerant niche my practice. Success does leave clues and if being a gentleman, a professional and are not enough Ron Paul was a friend to many in our industry and that is a clue to his success.

Steven Johnson

Grocerant Guru®

Foodservice Solutions®

Grocerant Niche Meals and Meal Components

 

Grocerant Niche Ready-2-Eat and Heat-N-Eat fresh prepared food continues to drive top-line sales and bottom-line profits.  The fact is cooking and cleaning the kitchen are not high on most peoples to do list according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. Here are some 2023 numbers from our team:

1. Recent Grocerant ScoreCards found 82.3% of consumers don’t know what’s for dinner at Noon, and 61.8 % don’t know what’ s for dinner at 4PM.
2. 68.2 % of consumers would order alcohol with a meal or meal components from a restaurant if available when ordering.
3. Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.
4. 79.6% all dinners have at least 1 grocerant niche Ready-2-Eat and Heat-N-Eat meal component and 66.6% have two meal components per day.
5. When asked if they wanted to cook dinner from scratch or assemble dinner from fresh meal components 91.3 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 83.4% chose meal components.
6. Seventy-three percent of retail prepared food purchases are taken to go
7. 88.2 % of consumers prefer hand held food over sit down meals with a knife and fork

 

That said, lets look once again our friends at Technomic and how their findings once again edify our scorecards and insights.  Regular readers if this blog will enjoy this. Here we go:

“One in four shoppers replaced restaurant meals with foodservice options from grocery stores, an increase of 17% from last year, according to FMI — The Food Industry Association’s “Power of Foodservice at Retail” report. 

Shoppers are also cooking at home more often and creating “hybrid meals” that combine premade foodservice items with those made from scratch, according to the report released earlier this month.

"For years, we’ve found that shoppers simply did not think of the grocery foodservice department when planning their meals. But, as shoppers continue to prepare more meals at home, that trend is changing," said Rick Stein, vice president of fresh foods at FMI, in a statement. “Shoppers are creating hybrid meals, which include some scratch cooking with some pre-prepared items. This hybrid meal approach means shoppers want convenience and experience and they are finding it in the foodservice, deli and bakery departments.”   

The research showing increased purchases of total deli foodservice is backed by NIQ (NielsenIQ) data that shows spending at deli counters grew 4.2% to $49.9 billion year over year for the week ended Oct. 7. Meanwhile, deli unit sales declined 1.7% during the same period.

The report added that household penetration of the deli foodservice segment was over 70%, with shoppers making an average of 9.8 purchases per year. That trend is expected to continue, as more than two-thirds of shoppers (68%) plan to continue retail foodservice purchases, while one in five intend to increase such purchases.  

Sales of foodservice and prepared items also increased to $18.5 billion for the year, up 4.7%. Foodservice/prepared unit sales fell 1.8% over the same period.  

Nearly half (47%) of shoppers told FMI that cost was the top factor driving their foodservice purchases. That was followed by taste at 43%; cravings for a particular dish, cuisine or taste at 42; value at 37%; time and effort involved at 35%; availability of options (such as the proximity to a restaurant) at 33%; how soon the meal can be eaten at 26%; and healthy eating considerations at 25%. 

The report also noted that there is room for growth in the healthy options offered at foodservice counters. Only a third of consumers were satisfied with healthy options available, while 65% expressed interest in healthy and nutritional options. Similarly, two-thirds said that they also consider at least one nutritional claim while shopping in the specialty bakery department.  

"Retailers need to adopt a restaurant-like mentality for foodservice and deli. Present features that shoppers appreciate, including online ordering, easy pick-up and delivery, to boost the convenience factor,” Stein said. “For the bakery, freshness is still a top priority for shoppers as is the ability to round out their meals with items like bread rolls or dessert options. Adding technology features that offer convenience is also part of delivering in-store bakery shoppers value." 

Retailers should highlight the comparative value of foodservice relative to restaurants, because shoppers already see it as a good deal, Stein wrote Friday in a blog post co-authored with Steve Markenson, vice president of Research & Insights at FMI. Retail foodservice providers should follow the lead of restaurants by offering restaurant-like amenities. “Topping the list are having a menu available online, enabling advance ordering through apps and offering drive-throughs for pickup,” Stein and Markenson wrote. 

The bog post added that 40% of shoppers expressed the need for help with meal planning, opening opportunities for retailers to offer “meal bundles, in-store displays that bring together the ingredients for a meal, providing ideas through retailer apps and more heat-and-eat choices.” “

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

Does your Restaurant App Suck Your Customers Think So

There is no doubt that year over year customer count declines within the restaurant sector are caused by many things including the ilk of slow service, cold food not cold, hot food not hot, delivery orders going out the front door as a customer’s waits, waits, and waits at a table for their food.  Ok, we could go on and on.

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, stated, “technology for online or inline ordering that is not as ‘good’ as McDonald’s is simply not good enough.”

Technomic recently found that “if you are experiencing declines in your customer satisfaction scores, you are not alone. Shifts in digital ordering behaviors and new customer acquisition may be to blame. But the general mood of the market is not helping matters. When you combine digital ordering behaviors with a general decline in national mood, we see satisfaction levels dipping and most often during online ordering occasions. The good news is that there are signs that a good in-person interaction can overcome that negative mood.   

Something is going on in the delivery market that is driving satisfaction levels down from 55% of consumers rating their experience as excellent in Q2 2020 during delivery orders to 49% today. One thing we know about consumers is that they tend not to be “wowed” by their first restaurant visit. More often their satisfaction with a restaurant goes up with experience. They come to know the brand first and then their satisfaction levels increase, as does their loyalty.

he best way to build this type of ongoing, reciprocal trust between a customer and a restaurant is in a face-to-face transaction. In fact, we tend to see higher levels of satisfaction on orders that originate with an employee than other order modes.  On average there is a 2 ppt advantage to an in-person order. It is very hard to build trust with a customer online.

At the start of the pandemic, I held hope this would finally be the event that brought communities together, allowed people to disagree with each other respectfully and helped build trust among diverse people. That hope lasted approximately one hour. That was the moment I opened an article about the delayed NBA season and found a festering pool of anger in the comments section. Displays of common decency were eventually drowned-out by this pool and other similar pools. But there were many common displays of decency and many efforts to make do.  

One area where those common displays of decency thrived was the support shown to restaurants. Our business was all hands on the Zoom deck. Trade groups formed, legislation was passed and when the doors were reopened customers were grateful, save for those occasional folks who wandered out of their anger pool to harass our staff. On average, the goodwill for this industry overshadowed the negativity. The result was unprecedented levels of satisfaction. In total, the proportion of consumers who had rated their last visit to the top restaurant chains in the industry as excellent was as high as it’s been in quite a few years. Restaurants were being given credit for trying. Some were excelling, even.

Since that time, however, we’ve seen a collective erosion of goodwill that is largely driven by this growing pessimism among online orders. Customer satisfaction levels have dropped from a peak in the third quarter of 2020 to this year’s third quarter. The drop-off was particularly large for Quick Service Restaurants.

At its most recent peak, 51.5% of visitors to the fast-food chain space rated their visit as “excellent”. That number was about as close as QSR has been too fast-casual levels of satisfaction in the history of our tracker. Satisfaction levels have dropped 4 percentage points to 47.4%. Fast-Casual restaurants did not see the immediate pandemic boost in satisfaction ratings but have also seen their scores drop as well.

Interestingly, we are seeing a different trend among casual dining restaurants where in-person orders have been recovering and satisfaction levels increased over last year. Midscale satisfaction is also up compared to 2019 levels but has started to come back to earth.

The question is, what is missing from our online ordering experiences that is not translating into satisfaction? This is a question we are setting out to answer in a new off-premise channel study we are launching. My hypothesis is that the missing element is the trust-building power of a smiling face and a warm greeting. If I’m right, then the question become how best to replicate that online. At the very least, we know that is not happening presently in our market.  It needs to be.” In short, the team at Foodservice Solutions® agrees with Technomic.

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 

Technomic: Gen Z & Millennials Prefer Marijuana over Alcoholic Beverages

 

There is no doubt that living in a state (WA) that has legalized the use of marijuana our views on the use of cannabis have evolved.  There seems to be a cannabis store on every block, some look like over priced jewelry stores others like an exclusive boutique.  On the other hand, there are those that look and feel like you would have wanted them too when ‘we’ were in college back in the late 60’s and early 70’s.

Somehow the team at Tacoma, WA based Foodservice Solutions® believes that our own Grocerant Guru® at times would, could, and should visit one of those that look like that bygone era. All kidding aside the fact is in the State of Washington the tax revenue from cannabis now exceeds that from alcohol. Yes, times they are changing.

Let’s look at some of the findings in Technomic’s survey of 2,000 consumers aged 21-plus, half of them Gen Z, and half millennials. So, where we go:

In 2021, 35 million Gen Zers are currently of legal drinking age (21 to 28), and ten years from now, that number will rise 85 million. But cannabis is as much a draw as beer, wine and cocktails.

In states where recreational cannabis products are legal, 65% of Gen Z survey respondents smoke marijuana and 51% consume cannabis-infused beverages, Technomic reported in its Adult Beverage Planning Program.

Most of this consumption takes place at home, but 38% of Gen Zers would visit a marijuana lounge or club to partake of the products. Visiting a bar or restaurant for a drink and/or food edges out that number at 41%, but the margin is thin.

In a Battle for Share of Stomach

What are you Selling?

The majority of millennials (65%), the next generation up, is more likely to patronize bars and restaurants, as these establishments are an important part of how they socialize, according to the survey. But that socialization benefit drops to 58% for the younger crowd.

Even as the rest of Gen Z reaches legal drinking age, they may be looking for different experiences when they go out. At casual-dining restaurants, a relaxed atmosphere and the price of the drinks are top considerations, with sanitation standards coming in third. And they are more likely to choose beer, cocktails and mixed drinks over wine.

Younger consumers also seem to be more spontaneous, meeting friends or family for informal get-togethers, Technomic found. Drink specials and promotions can be a competitive advantage—giving Gen Z a reason to leave the couch and gather in a bar or restaurant.

Now here is our take.  It’s time that restaurants embrace partnerships with cannabis retail manufactures.  That includes food manufactures, beverage manufactures, and cannabis non-consumable gift manufactures.  After all, grocerant niche mix & match meal component bundling is inclusive not exclusive.

 For more from on this Technomic Report or other Technomic reports visit: www.Technomic.com

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com 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.

Will Albertsons Focus on Grocerant Meals

Optimism returns to the foodservice industry as COVID-19 vaccinations pick-up steam all around the U.S. according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. Hotel and restaurant workers can’t wait for the full reopening of locations.  There are 29 restaurants for every grocery store in the U.S. and grocery store,. Grocery employees are eager for their workload to return to post pandemic levels so they can catch a break.

Back in the day my friend Ron Paul founder and President of Technomic coined the term, home meal replacement (HMR) to describe why the outstanding success of Boston Chicken / Boston Market and why they had driving sales and customer migration success.  At that time Technomic had industry leading insights, did the work, that laid the laid the foundation for what is now termed the Grocerant niche.

Back in the day (1993- 1999) food Industry research focused on HMR.  While industry leading conferences and seminars all touted the newest, hottest, HMR research insights to garner participants. Ron Paul’s team insights would receive high marks from Titians of the Grocery store sector, leaders in the convenience store sector, and accolades from chain restaurant C-suites.

There was one common undercurrent of discontent from every sector at the time.  That was it was too expensive to adapt too the recommendations. Given the CEO’s moto, do no harm, they did little, but talk loudly, and talk it up. However, few back in the day moved forward with any seriousness while slowly testing the 'HMR' sector. 

Today, grocery store rotisserie chicken has taken center stage in most grocery stores service deli’s as a grocerant niche Ready-2-Eat and Heat-N-Eat staple.  Our own Grocerant Guru® continues to be disappointed with the quality of the product, and price at most grocery stores but believes it is the foundation for continued growth within that sector for the grocery store sector. 

Johnson credits both Ron Paul (Technomic) and Scott Beck (CEO 1991 of Boston Chicken / Market) for encouraging him to focus on Grocerant niche meal solutions.  Johnson did, and now Foodservice Solutions® and Johnson are both recognized as the global leaders.  Beck understood the consumer touchpoints driving customer migration better than anyone back in the day or today according to Johnson.

Battle for Share of Stomach

Albertson’s like all grocery stores at the time entered home meal replacement niche halfheartedly and failed, the slipped back doing what they always did, accepting slotting fees, and placed items on the shelf. 

Then came the next wave of HMR as grocery stores learned some were succeeding, then they all rushed to reentered once again. This time the research industry evolved as well creating a new name for the niche convenient meal solutions  (CMS)  It was simply updated HRM data repacked to garner increased food industry excitement and incremental attendance at industry conferences and seminars according to Johnson.

2021 will be challenging for all grocery stores including Albertsons Cos. Now after 28 years Albertsons President and CEO Vivek Sankaran agrees that meals are an increasingly important driver of growth in grocery.   Sankaran stated, “We are going to get into the meals business. [And] I think you’ll see more of the restaurant business and the supermarket business converging,” Yes, once again they realize customer touchpoints matter. 

Outnumbered by 29 restaurants for every grocery store, full of with consumer tired of being forced to cook at home during the pandemic Albertsons own consumer insights must point to the grocerant niche.  That said, when the HMR info was replaced with CMS, convenient meal solutions, that was because rather than offering fresh prepared food, grocers wanted to sell CPG food.  They wanted to do what they always did.  So they made fresh prepared food into a packaged product. 

That did not work.  Researchers tailored studies to give grocers the what they wanted.  That’s how some research companies stay in business at the time.  They tailored the info too focus on CMS, simultaneously down playing the fresh prepared food focus. Guess what that did not help anyone consumer continued to migrate to fresh food fast driving growth in the restaurant sector. 

The team at Tacoma, WA based Foodservice Solutions® did not do that.  The question everyone has to ask today is will Albertson’s talk fresh but deliver a CPG product?  If you look at companies the ilk of Kroger or Hy-Vee the odds are the messaging will be there but the grocerant niche fresh prepared food in large part won’t be according to Johnson.

Regular readers of this blog know that Sally the Robot is a compact salad-making machine. About the size of a vending machine, Sally dispenses a full menu of salads, along with customizable options. Spurred by a need for safer self-serve experiences in vertical markets like grocery, Hayward, Calif.-based Chowbotics has also developed a mobile app for fast, contactless ordering through Sally edifying relevant consumer touchpoints. 

The team at Foodservice Solutions® wonders out loud if Sally the Robot will do a better job with delivering grocerant niche Ready-2-Eat and Heat-N-Eat fresh food than Albertson’s.  Will slotting fee’s once again derail the grocery sectors success selling meals? 

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 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant Niche. 

We Told you 'Grocerants' Are The Future Of Food Shopping

Since 1991 Foodservice Solutions® Grocerant Guru®, Steven Johnson’s focus has been on Hand Held Food and technology to improve food quality, customer service, and convenience of ‘better-for-you’ fresh food fast.  Regular readers of this blog know that Johnson was the one who coined the term GROCERANT back in the day after he identified quantified, and qualified the emerging retail space.

In fact, Johnson first warned the restaurant industry in 1991 about the undercurrents change within the consumer mind-set.  Then in 1996 Johnson penned an Op-Ed article titled: Call Them Grocerants in August in both FoodService Director and Nation’s Restaurant News which highlighted undercurrents of food industry evolving consumer migration patterns.

Now a year after consumer spending on restaurants finally surpassed grocery sales, evidence in two new reports is suggesting that neither restaurants nor grocery stores are the future of food shopping. Instead, what could dominate is a hybrid of the two: "grocerants."  OK, times they continue to evolve Foodservice Solutions® team was there at the beginning and continues to be the leading industry expert.

However, let’s look at what we can learn from some others. Here we go “according to evidence in one NPD group report and one research note from Oppenheimer, both recently released, Americans (and Millennials in particular) want someone else to cook for them, but they don't want to stop going to the grocery store, either. The compromise between the two? Purchasing prepared food from the supermarket.

NPD's food-service market research found that in-store dining and take-out prepared foods from grocers has grown 30% over the past eight years, accounting for $10 billion of consumer spending in 2015. By NPD's count, more than 40% of the U.S. population purchases prepared food from grocery stores -- and this number could grow as Millennials increasingly warm to the crazy idea of getting their food not from Seamless but from the supermarket.

“Millennials’ interest in the benefits and experience supermarket food-service offers will continue to be strong over the next several years,” David Portalatin, NPD's vice president of industry analysis said in a statement accompanying the research. “This forecast bodes well for food manufacturers and retailers who have their fingers on the pulse of what drives this generational group. Give the Millennials what they want — fresh, healthier fare and a decent price — and they will come.”

According to NPD spokesperson Kim McLynn, "grocerants" can range from yuppy-chic (see New York City's Eataly) to conventional-seeming grocers, like H-E-B Grocery in San Antonio, Texas, Buehler's in Wooster, Ohio, Hy-Vee in Bloomington, Illinois and Whole Foods in Austin, Texas.

While many grocery chains seem to be catching on to this trend, it's Whole Foods that has made some of the largest strides in capturing dining dollars for its prepared food offerings. "We were impressed by the overall prepared foods offering, which could represent a point of differentiation versus other specialty concepts such as Trader Joe’s," he wrote. "The main components of the prepared foods offering included two cold salad bars and two hot bars that included items such as pizza, soup, chicken wings and samosas. There were also other “prepared food venues” including a case filled with pre-made sushi, sandwiches, salads, etc. and an area where customers can order via iPad select items such as hot dogs, pizza, and rice/veggie bowls."

Beyond simply offering prepared food, Parikh and his team said they saw "an extensive assortment of value-priced prepared foods," too, including Seared Albacore Sashimi for $10.00; a Chinese-style salad with chicken for $4.50; peanut butter and jelly sandwiches for $3.50 each; a BBQ-style chopped salad for $4.00; and a chicken Caesar salad bowl for $10.00.

Ultimately, the Oppenheimer team estimates that Whole Foods after integrating all of Whole Foods 365 units could capture 20% to 30% of its market share from traditional restaurants:

"Based on our study of the concept and competitive backdrop, we believe the 365 format can help to attract a new customer and broaden the market share potential for the chain," Parikh concluded. "We view the new concept as very on-trend, catering to some of the hottest trends out there currently including fresh, natural/organic, and growth in away-from-home spending."

Whole Foods isn't the only grocer beefing up it’s pre-made meals. Now Convenience store sector players the ilk of Sheetz, Wawa, Green Zebra Grocery and others are filling the void left by many legacy chain restaurants and grocery chains unwilling to adapt to today’s dynamic consumers.

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

New Non-traditional Food Retailers exploit OmniChannel Options to Drive Sales

Legacy food manufactures and many legacy retailers are at a cross-roads trying to sell a branded product that has out live it’s shelf-life, lost customer relevance, looks more like yesterday than tomorrow according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

 Gone are the days that national syndicated food research studies from Nielsen, NPD Group, or Technomic provided restaurants, grocery stores, and C-stores all the valued information a company needs to understand the competition while identifying a clear path for its own direction for differentiated growth.

 Today successful fresh food retailers focused on consumer’s desires, wants, and need-set have the ability to exploit the Onmichannel retail world to build top line sales and bottom line profits. Foodservice Solutions® has identified, quantified, and qualified new relevant metric’s that are relevant to consumers as regular readers of this blog know. Consumers continue to migrate from legacy CPG foods and food preparations process to grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food according to Johnson.

 Regular readers of this blog also know that Foodservice Solutions® FIVE P’s of Food Marketing have become must have tools in Food Marketer’s tool kits. too garner the best menu mix offerings neighborhood by neighborhood and or city by city depending.  While we developed those tools 9 years ago there are some consults just not holding webinars on Delivery, food portability and how to best integrate a branded solutions.  One word of caution if they are this late to the game there insights might look more like yesterday’s insights than tomorrow’s.

Technology today can empower marketer’s ability to leverage the halo of the brand neighborhood by neighborhood or city by city.  Yes, it’s more work but the results can drive top line sales and bottom line profits all the while edifying your brand, franchisees, and most important your customers. 

Is your brand ready to grow outside of your four walls? Brand relevance has never been as important as it is today. Is your brand relevant everywhere? Could Outside-eyes drive your top-line sales and bottom-line profits?  We think so.   

Since 1991 Foodservice Solutions® a Tacoma, WA based retail foodservice consultancy has been the global leader in the Grocerant niche. For product or brand positioning assistance contact Steven Johnson at:grocerant@q.com or the Grocerant LinkedIn page or on Facebook at Steven Johnson, BING / GOOGLE: Steven Johnson Grocerants or Grocerant on Twitter