Family at Home Meals Triumph while Restaurant Meals Slide

 

Three strikes and your out is the rule in Baseball.  Within the restaurant sector has three big strikes that look to be getting the best of them.  Consider first that wholesale food prices were up 6.7% year over year in October and should reach 7.0% by years end.

While still dubbed the service sector within the restaurant sector limited-service restaurants speed of service has dropped 13% year over year and at full service it’s down 3%.  All the while on a two-year basis year over year restaurant industry sector overall customer traffic is down still 15%.  

There is more bad news for the restaurant sector.  Specifically, meal counts from in newly released research from Progressive Grocer “What’s Next for the Way America Eats.” The survey findings document shifts in behavior as well as evolving expectations and preferences of shoppers in relation to what, how and where meals are consumed, which included the following:

·         Home cooking has gained ground. Slightly more than 40% of meals were made at home with at least one component from scratch, an uptick from the prior year. Prepared foods accounted for another 20% of meals.

·         Consumers continued to cook at home more, because they enjoyed most of the meals they made (55%), they saved money (43%), and they tried new recipes and/or flavors (42%).

·         Home cooking is better than restaurant food, according to 45% of respondents, while perceptions of restaurant quality and service have slipped as prices have increased.

·         Convenience, taste, quality and cost-effectiveness were top reasons that consumers chose foodservice at retail. Nearly 60% said that it’s more affordable than restaurant food.

Battle for Share of Stomach

·        Restaurants still trumped retail, with 42% of those surveyed of the opinion that restaurants are “far better” than prepared foods from a retail store. However, 27% did say that retailers’ food is as good as or better than restaurants.

·         Those who have shied away from foodservice at retail cited concerns about safe handling and preparation methods, as well as fatigue regarding the choices offered.

·         The data showed 2.1 out of 10 meals were prepared foods, and the drivers of preference are a combination of grocers’ reliable strengths.

·         Sixty-three percent said [foodservice-as-retail] is a convenient option. We also saw things like taste of food, quality of food, and the cost-effectiveness or affordability of prepared foods as commonly mentioned reasons why consumers like prepared foods.

·         The survey asked consumers who said they are buying prepared foods more why they are doing so, and the top reason was affordability, with 59% saying it’s more affordable than restaurant food.

·         Most consumers still generally prefer the quality of restaurant food to prepared foods, but we do see that 27% feel prepared foods are at least as good as or better than restaurant food.

The true key for any food retailer in 2022 will be price, value, service equilibrium success which was defined by the team at Foodservice Solutions® as: 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.  Here is the question you need to ask yourself.  How high can you raise prices before your competitor has the advantage?

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Tim Hortons Makes Mother's Day a Family Day

 

There are times that a limited time offer does more than drive sales.  Tim Hortons has been refocusing on consumer touchpoints that edify the brand to consumers.  The Tim Hortons Donut Disguise Box does just that according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

So, the Mother’s Day Donut Disguise Box is available on May 8 and May 9 with the purchase of a six-pack of donuts at $5.49 at U.S. locations in the Buffalo, Columbus, and Detroit metro areas, while supplies last. Success does leave clues and offering a six-pack of donuts is a perfect size to complement the average family.  The price point extends the price, value, service inflection point, consumers have been migrating to for the past 15 years according to Johnson.

Now that, Tim Hortons U.S. has introducing the Donut Disguise Box in honor of Mother's Day. The Donut Disguise Box looks like a book on the exterior but inside, reveals a six-pack of Mom’s favorite Tim Hortons donuts. The product is available in two book titles, Glazed Expectations and Twenty Thousand Timbits Under the Sea edifying choice while not slowing down service.

The Mother’s Day Donut Disguise Box is available on May 8 and May 9 with the purchase of a six-pack of donuts at the recommended price of $5.49 at four select Tim Hortons U.S. locations in the Buffalo, Columbus, and Detroit metro areas, while supplies last. Simply ask for the Donut Disguise Box at the counter or in the drive-thru at any of the four available locations. 

Don’t forget that Tim Hortons marketing team understands interactive participatory marketing.  They are also bringing back the Mother’s Day DIY Donut Kit. This year’s kit features beautiful flower-shaped donuts that the whole family will enjoy decorating and eating. The DIY Donut Kit includes six bloom yeast donuts and four containers with fondant and sprinkles for decorating, at the recommended price of $6.99. Available from May 5 through May 9 at all Tim Hortons U.S. restaurants while supplies last, the DIY Donut Kit is a delicious gift and fun family activity all in one.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Walmart Vs Amazon with Technology / Service

 

Is copy-cat marketing a competitive tatictc or s lackadaisical strategy?  If you are looking for a true point of competitive differentiation according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions® you need to remember that differentiation does not mean different it means familiar but with a noticeable differentiated twist.

Recently Walmart announced that it was removing the $35 order requirement for its Express delivery service just a few months after scrapping the same minimum order rule from its Walmart+ subscription service. Service is about more than just price and when combined with first mover advantage Amazon still leads the pack.

Battle for Share of Stomach

This move from Walmart is just the latest in the ongoing battler to garner market-share back from Amazon and bid to attract more shoppers to its e-commerce offering. While Walmart's growth in the e-commerce segment has been higher than Amazon in the last three fiscal quarters, but they were at a very low level.  In the case of Walmart thank goodness for the pandemic as the company has attracted new wave of shoppers to its grocery pickup service during the pandemic, some may not have wanted to walk into a store at any cost.

Now, Walmart's Express delivery service empowers customers to order both, food or non-food, delivered to their doorstep in two hours or less. Just, like Walmart’s pickup and delivery service, there is no up-charge any item everything is priced the same as it is on the shelf. Express delivery costs $10 on top of the existing delivery charge. Walmart+ members simply pay the $10 Express fee.

“Tom Ward, SVP of customer product at Walmart stated, “Many customers use Express delivery for when they’re in a pinch, whether it be a missing ingredient for a weeknight dinner or a pack of diapers,”  “Customers told us sometimes the items they needed in a hurry didn’t meet the minimum, so we’re removing it, making it even easier for customers to get what they need when they need it.”

With over 126 Million Amazon Prime members in the US Johnson wonders if once again Walmart is doing too little to late? Express delivery is currently offered in nearly 3,000 Walmart stores, reaching nearly 70% of the U.S. population. It is one of several no-contact pickup and delivery options at Walmart. Several of Walmart's other e-comm options continue to carry a $35 minimum, however: grocery pickup, regular delivery and Walmart+ delivery.

Walmart keeps pushing forward in a copy-cat style according to Johnson, while they are pushing to create more local fulfillment centers in its stores. The vision of what they can do to edify the customer with a point of differentiation seems to still allude them. Amazon Go is simply a fresher, fast, avenue of distribution that edifies the one-on-one customer relationship with interactive participatory technology and the tactile familiarity that consumers grew up with. That is hard to beat with yesterday’s distribution model.

As Ward defines it, a local fulfillment center (LFC) “is a compact, modular warehouse built within, or added to, a store. In addition to fresh and frozen items, LFCs can store thousands of the items we know customers want most, from consumables to electronics. Instead of an associate walking the store to fulfill an order from our shelves, automated bots retrieve the items from within the fulfillment center. The items are then brought to a picking workstation, where the order can be assembled with speed.”

While Walmart’s focus on LFCs looks a bit dated we wonder if it might be prudent to edify the technology and ease some of the pain points for consumers.  While distribution in the early years was the foundation of Walmart’s success it looks as if its dependence within ongoing strategy might just become it Achilles’ heel.

Looking for a true point of competitive differentiation? 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

Grocerant Niche Breakout is Sustainable

  

The line between grocery stores, convenience stores, and restaurants continues to grow ever thinner. The fight for America's food dollars and share of stomach continues to intensify as consumers find fresh prepared Ready-2-Eat and Heat-N-Eat fresh food options at a wide and growing array of outlets across almost every channel including liquor stores, chain drug stores, club stores, vending and even more non-food traditional fresh food retailers like dollar stores.

Today, while manufacturers, retailers, and restaurants worry about choice overload, consumers have embraced their new choices and show no signs of returning to the old ways. This fight is taking place in what is called the grocerant niche. Food retail sales has evolved into a focused battle by each retailer for a larger share of stomach.

Specifically, the restaurant industry is not known for trying to be the fastest to market with an ideation, food, or tech advance.  Restaurants are slowly understanding that the consumer never takes a step backwards from technology or fresh prepared food quality, speed of service, prepared food meal component options according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

In the United States, the larger the chain in almost all cases the more slowly they are to adopt something than a smaller chain or independent restaurants will. Chain restaurants goal is simple to feed one meal at a time in the restaurant while protecting and edifying the brand according to Johnson.  That said 2020’s unusual retail conditions edified the long-term migration, adoption, and top of mind focus of new non-traditional grocerant niche products and points of distribution.

Battle for Share of Stomach

Historically chain restaurant leaders have denied the credibility of start-up competitors as non-relevant. The pizza sector is a great example; evolving from family dining independents to a national chain of "Red Roof" Italian, then to delivery-only outlets and now take-N-bake is garnering market share in the pizza sector. Now Virtual Restaurants, Virtual Kitchens, and Virtual brands are elevating the importance of brand marketing while reducing the cost to extend a brand’s reach according to Johnson.

Again, it is at the intersection of the consumer, freshly prepared food, and technology we find that consumer eating behavior is evolving and is now beyond the control of traditional food marketers. We have four meal periods today rather than the traditional three, many are smaller meals, some call them snacks.  That all depends in which age group you fall Gen Z & Millennials snack, Boomers like smaller meals according to Johnson.

Our evolving culture, lifestyle, demographics, along with the new uncertain economy are all putting pressure on the American food consumer: Demands of work, economic shrinkage, demands of raising a family, commuting, social interaction, kid's at home schooling, and after-school activities, all contribute to a food marketplace where convenience vies with price over legacy brands.

Recent advances in fresh food packaging combined with new points of Non-traditional fresh food distribution have empowered consumer choice, driving incremental customer migration and adoption of grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food according to the team at Foodservice Solutions® recent Grocerant ScoreCards. Americans are embracing these choices even as legacy marketers’ cringe. Who's after restaurant food dollars? Simply put everyone including retailers from Tommy Bahama, Macys, Del Monte Produce and Ikea. The shopper is in control spurring new retail food Formats.

Trader Joe's, Costco and Amazon -Whole Foods have created Ready-2-Eat and Heat-N-Eat fresh prepared food items with qualitative differentiation as an entity with an identity that has helped propel them into Ready-2-Eat fresh prepared food leadership.

There is no doubt that traditional views of meals and mealtime can pretty much be discarded. Legacy retailers waiting for the "next big thing" to copy simply might be out of luck this time. Legacy food retailers may not like to be first movers very much but it may prove that waiting too long will not work this time.

The retail food world is evolving at an ever-increasing pace filled with innovation in food, portion size, points of distribution, and quality fresh prepared meal solutions. The price, value, service equilibrium is resetting in retail foodservice. In order to edify the brand and reinforce consumer relevance restaurateurs must leverage Foodservice Solutions® Five P's of food marketing (Product, Packaging, Placement, Portability, and Price)

Many legacy food retailers continue to practice brand protectionism, stifle the brand while diminishing consumer relevance. The consumer is dynamic, not static. Brands must be dynamic, evolving with the consumer. Success in the restaurant world is no longer simply about what happens within your four walls.

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

2021 Top 10 Grocerant Grab-N-Go Trends

 

Convenience Stores, Dollar Stores, Service Deli’s, Coffee Drive-Thru’s, and Restaurants all have empowered consumers to choose them over their competitors with success in 2020, with both new CPG offerings, and fresh prepared grocerant niche food, according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

In new research from the team at Foodservice Solutions found the following 10 trends are most likely to have the greatest impact within the foodservice category 2021:

1. Sustainable Plant Based Menu & Side Items will Highlight 2021

The shift to healthy eating continues with breeze in like a warm wind in the summer. This year Convenience Stores, Dollar Stores, Service Deli’s, Coffee Drive-Thru’s, and Restaurants will introduce bold flavor, price favorable entrees and side items. Bold Flavors will the top driver for away-from-home purchases.

2. Mix & Match Meal Bundling Customization

Dollar stores will drive down entrée prices with a full range of mix & match affordable options slowing the growth at Fast Food outlets and C-stores. Price with the perceived drive but range of offerings and allow for more consumer customization.

3. Marketing Matters

Daypart dynamics will drive limited-time offers (LTOs) in every sector of retail foodservice as consumers seek to eat out once again.  In 2021 the foodservice competition (marketing messaging) will focus more on daypart than menu item.

4. McDonald’s Global Menu and Copy-Cats

McDonald’s proven global ethnic items such as egg rolls, empanadas and sushi are craveable and will be an example to all brands to expand flavors and rollout existing international successful menu items into the U.S. Adding global flavors to ubiquitous items is another way to add a taste of the world and increase variety. 

5. Branding the Impulse Menu Buy 

Prepared food purchases are frequently a planned purchase among 59% of shoppers, while 41% of shoppers said they buy prepared foods on impulse. Dinner has the highest amount of prepared food buys with 79% of respondents making purchases for that meal, while lunch comes in at 77% and breakfast at 62%.

6. Grocerant: Fresh Prepared

Five Gallon buckets of 21-day shelf-life product won’t sell in the service deli. That kind of food just won’t fly in 2021, as consumers are looking for fresh food and bold flavors. Grocerant niche mix and match bunding of baked goods, fruit, veggies, salads, and dairy items will.

7. Pizza Bundling at C-stores

Delivery of fresh pizza for dinner will continue to drive C-store foodservice sales.  In 2021 the bundling of Milk, Eggs, Bread, Coffee and Ice Cream will be all it takes to garner customer from both the restaurant sector and the grocery store sector.  

8. Indulgent Snacking

Mini-meals driven by full flavored single item the ilk of pint of rich dairy free ice cream, ¾ pound of Pulled Pork, or single serve mac-n- cheese. For those buying dinner for one.

9. Technology 

45% of all restaurant meals are eaten at home. It’s technology via an app or online ordering and delivery that will continue to drive top line sale and bottom-line profits in 2021.

10. Dinner Diner Drama

The drama will unfold in 2021 when we see just who is cooking dinner. Cook from scratch or buy grocerant niche fresh prepared food. Dinner has the highest amount of prepared food buys with 79% of respondents making purchases for that meal, while lunch comes in at 77% and breakfast at 62%.

Interested in learning how Foodservice Solutions FIVE P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Battle for Share of Stomach