Evolving Restaurant, Bodega, and C-store Customers are Dynamic and Migrating to Different Formats

 

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food had been driving customer adoption and migration in every sector of retail food sales for the past 9+ years.  Combine that with forced home confinement during the pandemic and now inflation is there are you asking your self What Next?

If your year over year customer counts are down or trending flat you know that your customers are eating somewhere else.  Let’s face it, American consumers are not all losing weight. Man-Up your customer are moving on. 

According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, consumers are dynamic not static.  They don’t want to take the time to cook from scratch, don’t want to do dishes night after night.  They want full flavored food from around the world not just next door.   On top of everything else, consumers want there meal fast and or delivered. 

While Foodservice Solutions® is the global leader in Grocerant niche research and Foodservice Solutions® Grocerant ScoreCards set the industry standard.  NPD excels at evolving eating patterns.  Let’s see just what they have found and I hope it can help you evolve your food retail programs.

All of you know that the COVID-19 pandemic prompted significant changes to the rhythm of Americans' eating patterns, disrupting the usually predictable habits formed by daily routines and needs. Now more than two years later, just as these patterns were returning to pre-pandemic normalcy, inflation has disrupted them again.

So, according to a recent report by The NPD Group, "The rate of change in U.S. consumers' eating behaviors continues at a dizzying pace," said David Portalatin, report author and NPD food industry advisor. "Anyone hoping to return to normal must understand that there is no normal, only an ongoing evolution as we respond to new realities."

According to the recently released 2022 edition of "Eating Patterns in America," six macro themes are shaping the new realities of food and beverage consumption behaviors:

1. Economic transition — Consumer spending experienced a stimulus-fueled surge in 2020 and 2021 that extended into the first quarter of 2022, after which inflation and economic uncertainty rose to the forefront. The positive and negative disruptions in the past few years could make year-over-year economic metrics less straightforward than they would ordinarily be.

2. Inflation — Consumers are unlikely to reduce their food and beverage consumption in the face of inflationary pressure, but they will find ways to manage and allocate their food dollars. Inflation is more moderate for food away from home than food at home, with the typical restaurant meal costing 3.4 times more than in-home food sourced from retail, according to the report. To offset rising food costs, consumers are hunting for bargains when they shop for groceries, eating more meals at home, and cutting back on restaurant visits.

3. Income bifurcation — The difference in behaviors among income groups is a key theme shaping the food and beverage landscape. Trends of upper- and lower-income consumers are starkly divergent, and income bifurcation has profound implications for the total share of stomach trends, retailer and restaurant choice, dealing and promotions and brands vs. private labels.

4. Sticky behaviors — Many eating behaviors adopted during the pandemic reflect a rapid acceleration of behaviors that were established long before the pandemic, such as consumers eating most of their meals at home. Food and beverage behaviors may continue to normalize, but the consumer landscape has been transformed as consumers created new capacities and restaurant operators expanded capabilities to serve a more home-centric consumer.

5. Total wellness — Consumers are finding a balance between foods that contribute to their physical well-being and foods that serve more emotional needs. They are increasingly in tune with the functional attributes of various foods and beverages that can contribute to both sides of this equation.

6. Return to convenience — Going back to school and work create time pressures for home cooks and foodservice customers alike. While home-centricity remains more prevalent, the return of mobility reintroduced the need for speed and convenience. For some occasions, this means a visit to a quick-service restaurant, but for others, consumers want to retain their new at-home capacity while incorporating some shortcuts or time-saving techniques.

"America's eating patterns are shifting to adjust to new realities, and food manufacturers, foodservice operators, and retailers will need to adjust their offerings and services accordingly," Portalatin said. "Although the one constant is change, there is a constant to count on: the U.S. consumer will always need to eat, and then it's a matter of figuring out what, how, when and where." Not bad, thanks NPD.

Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Does your messaging look more like yesterday that tomorrow?  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.

Do you Want to Build a 

Larger Share of Stomach?

What’s for Dinner, for Generation Z, its Fast Food First.

 

Success does leave clues and if you want too garner the attention of Gen Z consumers you had better start thinking like a QSR according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who stated “David Portalatin and his team at NPD left plenty of success clues on how to garner new Gen Z consumers in a new report from NPD.  Here lets take a look:

The new report from NPD reveals that older Generation Z consumers, ages 18 to 24, in the United States are discerning when choosing restaurants. Noting although price matters to this group, their taste preferences and definition of value dictate the type of restaurants they visit. ... Gen Zs skew towards quick-service restaurants (QSRs), particularly fast-casual restaurants that balance value and a focused menu.  

David Portalatin, NPD food industry advisor and author of Eating Patterns in America, stated, "Now is the time to reach these young adults as they enter their peak restaurant usage stage," said. "Restaurant operators can differentiate their brand with Gen Zs by focusing on creative spins on classic foods, engaging relevant messaging, and generating value beyond price." Gen Z Menu Preferences and more:

1.       NPD highlighted that when deciding to eat out, Gen Zs choose the food they want before the restaurant. Many are seeking more from their restaurant foods and beverages, including local, low-calorie, organic, sustainable and plant-based options.

2.       When it comes to choosing what to eat, classic menu items — like burgers and chicken options that are unique, craveable, and can't be replicated at home — appeal to this group. Snack-oriented foods, bottled water, and non-carbonated soft drinks are also popular with Gen Zs.

3.       Chicken sandwich offerings are essential to Gen Zs, particularly those with value price points or a spicy profile, added NPD, which recently merged with Information Resources Inc. to create a leading global technology, analytics and data provider.

4.       In the past 12 months ending July 2022, Gen Zs made 5 billion restaurant visits; 4.3 billion of those visits were to QSRs and 736 million were to full-service restaurants.

5.       Quick-service traffic was flat compared to a year ago, while Gen Zs fast casual visits were up 4 percent in the period compared to a year ago. Members of the consumer group favor major fast-casual chains that provide the menu items they want, value for the money, and messaging that reflects their interests, like organics and sustainability, according to NPD's recently released Winning Gen Z Consumers study. 

6.       The report also discovered an increase in spending in categories like apparel and overall inflationary pressures have heightened Gen Z's price sensitivity, in which half of the consumer group revealed that higher menu prices have impacted their restaurant visits.

We recommend, you take some time and check out just what, The NPD Group has to help clients grow their businesses in today's retail landscape and prepare for the future. 

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

Conundrum Eating-Out or Eating-In

 

Grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food continues to drive Top-line sales, bottom-line profits, and returning customer in every sector of retail foodservice today according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Consumers don’t want to cook from scratch, nor do they want to spend a hour walking through a grocery store looking for six items to make two meals as they are trying to save money according to Johnson. Here are some interesting numbers from The NPD Group on the price of meals:

·         At-home food (8.7% sales growth versus year ago) is outpacing away-from-home food (6% versus year ago)

·         While inflation is more moderate for food away-from-home (7.1% versus year ago) compared to food at-home (10.3% versus year ago), away-from-home food still costs 3.4 times more than at-home food)

·         Up to 20% of U.S. workers work from home, which keeps 62.5% of the food dollar based on retail at-home sales, while 37.5% is based on away-from-home sales

Let’s talk; that information tells us your restaurant meal must be 3.4 times better in some form. It might flavor, no cooking, no cleaning the dishes, time saving and or even simply fun.  Restaurant meals must become a better alternative than cooking a meal at home.

A recent price index study conducted by FreshRealm found that meals are up by wallet-shattering percentages year over year. The price index evaluated the places consumers shop for meals out of home — fast food, quick service, and table service. The index showed that for example, at McDonald’s, the Big Mac that was $5.29 last summer now costs $7.39 (and that’s without fries) while in some cities, the price of a Steak Burrito Bowl at Chipotle jumped from $8.95 to $12.70 between 2021 and 2022. Outside of drive-thru and fast casual, the cost of Red Lobster’s Wild Caught Snow Crab Legs rose from $22.99 in 2021 to a whopping $39.99 this year.

Consumers Get Creative

Consumers are not immune to these rising costs – and they are already on the hunt for viable new ways to navigate inflationary prices. According to a recent CNBC report, second quarter reports from McDonald’s and Chipotle confirmed that customers squeezed by inflation are opting for cheaper menu items and visiting both restaurants less overall. And when it comes to traditional restaurants, consumers reported similar levels of spending at restaurants in June 2022 compared to June 2021 amid signs of slowing growth according to Morning Consult’s 2H 2022 The State of Food and Beverage report.

As consumers look to lower their food costs, they have been replacing trips to restaurants with trips to the grocery store. Leading to the growth of the “hybrid meal,” where consumers are making meals by cooking some items from scratch, and some items are either semi-prepared or fully prepared, according to IRI’s Fresh Pulse podcast.

Dining Out at Your Grocery Store

Fresh prepared high-quality meals at retail present a great value for consumers in both single serve and family formats. According to the FreshRealm price index study, fresh prepared meals at grocery retail range from $6.99 - $9.99 for a single serving meal and family meals that serve 4+ range from $5.00 - $6.00 per serving. FreshRealm’s recently launched branded meal portfolio, Kitchen Table, includes delicious, chef-tested microwave-ready and oven-ready meals including Wild Caught Everything Spice Salmon, Alfredo Truffle Cavatappi with Spinach, and Family Meals that include Butter Chicken with Turmeric Rice and Cheese Enchiladas with Rice and Beans.

Now according to NPD, dwindling sales and declining foot traffic for restaurants are translating to a boost for supermarkets, with consumers who increasingly turn to bargain grocery shopping and eating more meals at home, according to new data.

Despite the fact that inflation is more moderate for food away-from-home (7.6% versus a year ago) compared to food-at-home (13.1% versus a year ago), the typical away-from-home eating occasion still costs 3.4 times more than in-home food sourced from retail, according to data from recently-merged companies Information Resources, Inc. and The NPD Group. The result, according to the data, is more people choosing to grocery shop and make meals at home. 

So, the nearly $1.5 trillion at- and away-from-home food market is forecast to grow around 8% in 2022, with at-home food (8.7% sales growth versus a year ago) outpacing away-from-home (6% versus a year ago), according to the research by NPD. 

 Here are some other key NPD findings include:

·         Hybrid and flexible work schedules allow some 20 million U.S. workers to work from home, which keeps the substantial majority – 62.5% – of the food dollar based on retail at-home sales, while 37.5% represents foodservice spending​​​​​​

·         Consumers are bargain hunting, preferring more mainstream and value brands over premium brands, choosing private label foods in select categories and occasionally buying premium products as affordable luxuries

·         Consumers are migrating to more at-home food to offset rising costs, as noted by the deceleration in foodservice traffic, down 3% in July. Even when dining out, consumers trade down to more value foodservice outlets, like quick service restaurants, as evidenced by the growth in average customer check versus menu prices

·         Market bifurcation intensifies as higher-income households prefer premium products and lower-income shoppers prefer mainstream and value products. More growth is driven by higher-income households, as lower-income households are more economically challenged

How and where are you selling meals?  If you are a restaurant owner, are you bunding meals to go for more than one meal occasion? If no, it just might be time to call the team at Foodservice Solutions®.

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

Restaurants Face an Up Hill Battle for Customers

 

Will it never end, the fight for a larger share of stomach?  The restaurant sector topped out in 2018 with 30.34 restaurants for every legacy grocery store.  A battle for share of stomach that seemed unstoppable as year after year the restaurant sector opened new units and grew by more units than any other retail food sector according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®  

Once again in a new report that found that inflation and other rising costs have consumers looking to cut expenses, and eating more dinners at home is one way they do it.  The retail food tide seems to pushing back on the restaurant sector. 

According to The NPD Group's latest report, "Future of Dinner," out-of-necessity dinners at home peaked during the pandemic but have since normalized and are still above the pre-pandemic levels. Ultimately, in-home dinners will remain at a heightened level through 2024. 

Darren Seifer, NPD food and beverage industry analyst, stated, "More dinner meals at home are here to stay. The shifting population life stages and economic situation will create greater reliance on dinner at home," … "Consumers across all ages will look for breaks from routine, like making the same dishes out of habit.

"Food manufacturers and retailers can help consumers with dinner prep fatigue with convenient new foods and dishes that fit various cooking skill sets and needs. Value will also be top-of-mind with consumers during this time of high inflation" Seifer added.

Seifer continues, “The research firm also noted that foods that require more effort and time will face headwinds through 2024. For example, seafood, hot and cold sandwiches, and homemade baked goods face headwinds as consumers reset their dinner rituals.”

Yet, there is more, also facing headwinds are foods some may consider convenient, like pasta, an essential go-to during the pandemic.   Although in-home dinners will remain popular, consumers have resumed their busy lifestyles and will look for convenience when preparing dinner, according to NPD.

Our Grocerant Guru® has been documenting this for years as regular readers of this blog know. Here let’s review:

1.       Recent Grocerant ScoreCards found 81.1% of consumers don’t know what’s for dinner at Noon, and 61.1 don’t know what’ s for dinner at 4PM %.

2. Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.
3. 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.
4. 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.
5. Seventy-three percent of retail prepared food purchases are taken to go
6. Prepared food purchases are frequently a planned purchase among 61.2% of shoppers, while 40.9% of shoppers said they buy prepared foods on impulse. Dinner has the highest amount of prepared food buys with 81.7% of respondents making purchases for that meal, while lunch comes in at 76.9% and breakfast at 61.4%.
7. 57.8% of consumers would like to add Alcohol to a dinner order

 

NPD found that little or no prep and fast dinner fixes, like frozen meals and ready-to-eat snacks, especially during the work week, will also grow through 2024.

The pandemic escalated the pairing of foodservice and retail prepared foods with in-home prepared dishes to create blended meals. This behavior will continue through the near future, reported NPD, which tracks all aspects of U.S. consumers' eating behaviors daily.

The NPD Group’s "Winning Gen Z Consumers" study found that Gen Z consumers, whose outside recreation like restaurant visits was thwarted by the COVID-19 pandemic, made 218 annual restaurant visits per person in 12 months through February 2022. 

The report also pointed out that price is the most important attribute among consumers 18 to 24 years old when choosing a restaurant. The team at Foodservice Solutions® recommends the NPD Group’s “winning Gen Z Customers”

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

Success Does Leave Clues for Food Retailers

 

Giving credit where credit is due.  The grocerant niche filled with Ready-2-Eat and Heat-N-Eat fresh prepared food continues to drive top-line sales and bottom-line profits in every channel of retail foodservice.  According to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® the recent insights by the NPD group show just have important the Drive-thru and digital ordering have become.  Here let’s take a look: 

“With consumers seeking the next level of convenience, restaurant carry-out has declined, reported The NPD Group. Instead, delivery and drive-thru orders took hold during the COVID-19 pandemic and have continued since, based on NPD's continual tracking of the U.S. restaurant industry.

From February 2020 through February 2022, digital and non-digital carry-out restaurant orders declined by 2 percent while delivery increased by 116 percent, and drive-thru grew by 20 percent. Digital ordering, which grew by 117 percent in the two years, contributed to the delivery and drive-thru growth.

Although digital carry-out orders doubled during the pandemic, these gains were offset by a double-digit decline in non-digital pickup orders that account for the bulk of pickup orders. In the year ending February 2022, 76 percent of carry-out were non-digital orders, and these orders declined by 16 percent compared to the prior year. Non-digital drive-thru orders increased by 20 percent in the same period, and non-digital delivery, which represents 25 percent of delivery orders, increased by 25 percent. 

In a Battle for Share of Stomach

You Can Win

"Several factors have encouraged consumers to move away from ordering carry out. The convenience of drive-thru’s, delivery and mobile ordering, in addition to dining room closures, have influenced consumers' willingness to get out of their car, walk into a restaurant, and order to go," said David Portalatin, NPD food industry advisor and author of Eating Patterns in America. "Convenience rules and the more convenient options will win."

Today, the focus is on customized diets, nutrient intake and functional foods, according to NPD's recent "America’s Health Pulse: Closing the Gap Between Wants and Needs" report.

Four macro needs drive all consumption: fueling, wellness, connecting and gratifying. Fueling is the top driver, influencing one-third of all eating occasions. The need for wellness grew throughout the pandemic and is second to fueling as a consumption driver. Wellness now directly impacts 21 percent of all eating occasions, which amounts to billions of occasions annually. With most meals sourced from home — a behavior established long before the pandemic — NPD expects wellness as a consumption driver to remain elevated into the foreseeable future.

If you are coming to the National Restaurant Show in Chicago I suggest that you stop by the The NPD Group  booth and see what else you can learn.

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