Battle Brewing Between Fresh Food Fast Vs. Shelved Food Stocked

Where are we buying fresh prepared food?  Today, the evolving food consumer is driving restaurant, C-store, and grocery change specifically a renewed focus on ‘fresh’.  This new set of food preference including likes and dislikes is creating food retail discontinuity.  That discontinuity is driven by Generation Z, ages 0-23, and Millennials, ages 24-37, according to Foodservice Solutions® Grocerant Guru™.

The merger announced this week between Heinz and Kraft Foods creating the world’s fifth largest food company with sales of $28 billion says more about a growing generational food consumption divide, than the long term success for such brands as Jell-O or Maxwell House according to our Grocerant Guru™.

Regular readers of this blog know that Gen Z and Millennials are looking for food transparency.  They prefer food that is ‘fresh’ with fewer artificial ingredients, and perceived as better for you. Baby Boomers and Gen X aka older generations grew up counting calories, monitoring price and eating more at home than away from home. Simply put this is becoming a battle of Fresh Food Fast over Shelved Food Stocked. 

Incremental Change

Restaurants continue to garner share of wallet.  Morgan Stanley research found recently that Millennials go out to eat once a week or more 53% vs 43% for the general population.  Here is how they define the groups. QSR means a "quick-service restaurant," like McDonald's or Subway. CDR refers to casual-dining establishments like Olive Garden or Applebee's. And FCR stands for fast casual restaurants like Chipotle, Panera Bread, and Five Guys.

Fresh Fast Food

While Millennials are different from their parents there are some similarities one being they visit McDonalds but are unwilling to tell anyone one that they do. The Morgan Stanley report found that McDonalds is the most visited restaurant Millennials and yet least likely to receive an endorsement. 

NPD Groups Ms. Bonnie Riggs found that;   “Americans made 61 billion visits to restaurants last year. Three out of four visits were too fast food restaurants, like McDonald’s. Which reminds us that in the United States 50% of Americans over the age of 18 are single, and as our Grocerant Guru™ states they prefer Fresh Food Fast over Shelved Food Stocked. 

With all the talk of ‘fast casual’ dinning growth Millennials make up 51% of fast casual customers although they represent only 31% of the people surveyed by Morgan Stanley and the battle in the fast casual space is for Millennials dollars vs Millennials grocery dollars.  At this time Millennials are showing little appetite for Shelved Food Stocked. 

Millennials have become accustom too fresh prepared Ready-2-Eat and Heat-N-Eat food options that can be personalized and customized. They will be key to driving sales of fresh prepared food sales across all food platforms an additional 8.5% over the next three years according to Foodservice Solutions® team. 

They enjoy eating fresh fruit and fresh vegetables. More important they enjoy them all day, as a snack, or with a meal.  They are ‘hand held’ and ‘better for you’ foods that provide the instant gratification Gen Z and Millennials are seeking. That’s a perfect driver for the future growth of the Quick Service restaurant sector and the Fast Casual sector.

The Customer Has Moved

The simple fact that Trader Joe’s has the highest Sales Per Square Foot in the grocery sector and does not accept Slotting Fees and is largely dismissed by main-street grocery stores that say “O That’s Just Trader Joe’s”. The simple fact that Aldi is the fastest growing grocery store in the US and does not accept slotting fee’s  tells us that maybe just maybe the Heinz and Kraft Foods mega merger will be great for international growth but is very likely to do nothing for U.S. sales. 

Customer migration drove that Sales Per Square Foot at Trader Joe’s!  Consumers consider Trader Joe’s a value store not a specialty store.  Consumers are not wrong.  Consumer do prefer Fresh Food Fast over Shelved Food Stocked according to our own Grocerant Guru™

Visit: www.FoodserviceSolutions.us  if you are interested in learning how Foodservice Solutions® 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization or you can learn more at Linkedin.com/in/grocerant or twitter.com/grocerant or call 253-759-7869 Email: Steve@FoodserviceSolutions.us

Starbucks is a Food Merchant Extraordinaire

Ready-2-Eat and Heat-N-Eat fresh food was denied a spot at the table for the first 20 years under the leadership of Howard Schultz at Starbucks. In fact on many occasions Schultz would comment that Starbucks would never sell food.  Great leaders show great leadership, Schultz is one of the first to embrace Omni Channel retail and evolve Starbucks into a restaurant success surpassing all but one company.

Technomic reported in its 2015 Top 500 Chain Report that, Starbucks has passed Subway to become the No. 2 restaurant chain in U.S. sales, second only to McDonald's. Great companies evolve with consumers, Starbucks continues to evolve. 

The Top Five Chain Restaurant’s in the U.S. According to Technomic are:

 Restaurant, 2014 U.S. sales (billions), change from 2013

1. McDonald's, $35.4, -1.1%
2. Starbucks, $12.7, 8.2%
3. Subway, $11.9, -3.3%
4. Burger King, $8.6, 1.6%
5. Wendy's, $8.5, -0.4%

Starbucks understands day-parts, retail food channels, and customers much better than many other restaurateurs, grocers, C-stores, or new non-traditional fresh food retailers.  One driving success factor Starbucks focused on share of stomach rather than share of visit.  A second driving success clue is Starbucks evolves with consumers rather than following them. 

Abandoning brand protectionism has set Starbucks apart from the competition. Abandoning brand protectionism has allowed Starbucks brand to resonate customer relevance with consumers of all ages, during all day-parts.  Howard Schultz is an outstanding icon of all Omni-channel food retailers, restaurateurs, and our leading candidate for Grocerant retailer of the year!

www.FoodserviceSolutions.us  specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging marketing integration strategy.  Foodservice Solutions of Tacoma WA is the global leader in the Grocerant niche and has been since 1991 Contact: Steve@FoodserviceSolutions.us

A Billionaire’s Comfort Zone the Good Old Days of Static Fresh Food Fresh Not so Easy

After two steps backwards Fresh & Easy looks forward, maybe.  Here we go again with Fresh & Easy a new day a new spin.  One thing is clear a billionaire’s comfort zone in what he did once is not what customers wanted today.

When you hire C-level team from legacy food retailers, category managers from legacy industries who were successful in the past, it appears as if they brought the past with them not the success.  The consumers have moved.  Category managers, continuous category managers, and advanced category managers call them what you will; they are the Achilles Heel of the grocery sector according to Foodservice Solutions® Grocerant Guru™. 

There was a time when grocery customer service was frictionless.  There was a time when all value metrics within the grocery sector were static. That time was 1970’s, 1980’s, 1990’s and category managers thrived during that period. That time has come and gone. That business model has evolved.  The customer has evolved.  Today, the consumer is dynamic not static seeking interactive participatory interaction in today’s retail food world. Simply put Fresh & Easy did not get it. 

While the name and consumer mandate was Fresh & Easy.  Just what the hell were they thinking when they brought in all the new products from legacy manufactures?  Clearly they were look backwards, utilizing wall-street metric’s that measured success by basket size rather than customer relevance.  Fresh & Easy became yesterday’s retailer in today’s reality and was stuck looking back not forward. 

After shuttering 50 units once again we hear they are going to focus on ‘fresh food convenience stores’?  Do you think they understand what that is today?  How many growler stations do they have in the remaining Fresh & Easy units?  How many digital menu boards do they have posting customer relevant messaging? How many salad artists do they employ?  

We all find comfort reading stories of our hero’s from the past Ben Franklin, Thomas Jefferson, Babe Ruth, George Washington, Dwight Eisenhower, John F Kennedy but we live in the moment, we line in the day.  We like our cash machines rather than visits into the bank, we like Email over snail mail, and we prefer fresh food fast over shelved food stored according to Foodservice Solutions® Grocerant Guru™.  

Consumers today want Ready-2-Eat and Heat-N-Eat fresh prepared food; Grocerant Niche food. They are not seeking a frictionless, efficient, sterile environment that measures metrics of yesterday. Rather they are seeking an interactive participatory interaction platform that elevates consumer convenient meal participation, differentiation and individualization. 

Are you trapped doing what you have always done and doing the same way.  Interested in learning how Foodservice Solutions 5P’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.

Millennials Migration Brews Success at C-stores

Fresh is the recipe for success in retail sales in 2015 according to Foodservice Solutions® Grocerant Guru™.  The kids are growing up, and after years of buying root beer Slurpee’s at convenience stores Millennials are not abandoning convenience stores they are driving change including leaving bottled beer for Growlers (Fresh tapped local Keg brewed beer).

Grocery stores have found success offering ice cold draft beer where customers can select from a variety of branded local beers and fill a 32-ounce or 64-ounce refillable bottle with beer and it take home.

Draft beer taps where customers can have 64-ounce growlers filled with beer to go have been installed in dozens of gas stations, grocery stores and other retailers around the country. Paul Gatza, director of the Brewers Association, a national industry group stated; “It's definitely becoming more popular," The American public wants to be able to control their experience. They want to be able to take their beer home and pour as much or little as they want."

Today, close to  35 states allow retailers to sell the refillable, half-gallon glass jugs known as growlers, according to the Brewers Association, and several states, including Florida, Iowa and Missouri are considering laws to allow the practice.

The Brewers Association found that, craft beer sales grew 22% in 2014 to $19.6 billion, although a portion of the increase was due to a looser definition of craft breweries. One of the first retailers to embrace growlers was Sunoco. The fuel and convenience store company opened its first "Craft Beer Exchange" in 2011 in a Buffalo, N.Y., gas station.

Sunoco fills growlers in 65 convenience stores in New York and South Carolina. Each has six to 12 beers on tap ranging from $8 to $20 per half-gallon. Customers can bring in an empty growler or buy one for about $4. Employees trained to work the taps fill and seal the growlers.

 Success does leave clues outside eyes can deliver inside sales. What are you bundling with you core products? Who are your customers?  Where and how can you sell your customers more? For more Visit www.FoodserviceSolutions.us  or http://www.linkedin.com/in/grocerant or twitter.com/grocerant