Grocerant Undercurrents Create New Competitors

Foodservice Solutions® Grocerant Guru® tracks the undercurrents of consumer migration. Local, sustainable new To-Go, Take-Out, and Take-Away fresh food options threaten restaurant growth. Companies the ilk of Buc-ee’s, Green Zebra Grocery, and Everytable are driving change.   These new fresh food options are coming from unexpected non-traditional retailers. Many of these non-traditional food retailers are fast becoming the new normal in food retail.  Do you know how The Home Meal Replacement fad of the 1980’s evolved into the Grocerant Niche and is today is now garnering restaurant customers and market share?

Can you harkin back in the day, during the late Home Meal Replacement frenzy grocery stores, C-stores and restaurants all studied with excitement the successful developments of Phil Romano's Eatzi's. Eatzi's is Where Phil turned the page from restaurateur too foodservice retailer and food merchant. Phil's experiment was a smashing success.

The first grocerant according to our Grocerant Guru®, Eatzi’s was then and remains a concept that is consumer interactive, participatory with visceral authenticity recording sales of 17 Million a year at the original store. Today Eataly is Eatzi’s on steroids doing close to 60 Million a year in sales.

The Home Meal Replacement focus quickly faded away as grocery stores tried to make fresh prepared food a CPG product and in many cases they continue trying to do that today. Today the grocerant niche is the strategic path of choice for non-traditional fresh prepared food retailers, targeted at restaurant customers, profitable, and expanding at an ever increasing pace.

Fresh Food can be Omni-Channel

One example is Wawa, it was once considered a convenience store now the Wawa positions it's brand as Fresh First, Built-To Order and Ready-To-Go with focus of serving Fast Casual Food - To Go. At Wawa customers are now finding; What's for Breakfast, What's for Lunch, and now What's for Dinner.

Sheetz once a convenience store now calls themselves a restaurant that sells gas. Sheetz Made To Order food is a hit with customers. Sheetz is successful contemporizing legacy C-store products with differentiation, customization and personalization.

McDonald’s learned from companies like Wawa and Sheetz that consumer like the variety, 24 hour menu serving all day parts - all day long - with a wide range of consumer meal and snacking needs. Breakfast 24 / 7 at McDonalds is proof positive success does leave clues.  That’s right Sheetz is a Restaurant that just happens to sell Gas.

Rutter's is another convenience store in transition. Rutter's understands the unique balance between palate, price, pleasure, and the consumer's drive for qualitative distinctive differentiated new messaging and Rutter's is meeting that need set.

The food value proposition equilibrium for the consumer today balances; better for you, flavor, and traditional products all blended into something with a twist. In industry speak, differentiated does not mean different to the consumer it means familiar. Rutter's is an example of brand identity extending beyond consumer expectations within the traditional conveniences store sector. Too the consumer Rutter's is a direct valued competitor within the QSR space.

Today's Grocerant

The grocerant niche is a result of the blurring of the line between restaurants, grocery stores, convenience stores, and drug stores all selling fresh prepared, portable convenient meal solutions. Targeted at the time-starved consumer with Ready-2-Eat or Heat-N-Eat fresh prepared food components that are "better for you", portable and portioned for one or two. All of these operators want a larger share of the retail food market. They want to take share from the restaurants.

Whole Foods is no longer Whole Paycheck but Whole Foods 365 Fresh Food Fast and consumers find that is "better for you". They are driving customer frequency while building loyalty with Fresh prepared Ready-2-Eat and Heat-N-Eat better for you food. Whole Foods focus is on convenient meal participation, better for you differentiation, and individualization.

Safeway's has integrated Mix and Match Meal Bundling marketing into daily and weekly iphone app's and legacy print flyers. With a focus on Fresh Prepared Food, Safeway is leveraging The 5 P's of Food Marketing: Product, Packaging, Placement, Portability and Price establishing contemporized consumer relevance. In what was once restaurant food space alone grocery stores, C-stores and Drug stores are now garnering consumer attention.

Duane Reade Fresh Food Is a Disruptive Force in the Retail Food Sector.

This video of Walgreens in San Francisco entering the fresh food space is evidence that no food retailer should dismiss as not my competitor. Walgreens with over 80 Billion in sales has the capital and resources to repeatedly try and try again until they get it right. Walgreens might just be The Next Biggest Competitor in the retail food space.

 Duane Reade is part of Walgreens that has 8,177+ retail outlets. Who is selling what in your back yard? With Walgreens entering the fresh food area again with meats, wraps, soups "and other on-the-go meal options, as well as convenient alternatives for tonight's family meal, it is clear that the future of fresh food retail leadership may be up in the air.

Foodservice Steps Forward

Food Retailing never takes a step backward. Consumers are dynamic not static always looking to save both time and money. The new normal is the grocerant niche propelling new quality points of fresh food distribution and competitors that are well financed. Remember, when it is 4pm, do you know what your customers want to make for dinner ?

Steven Johnson is the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, with extensive experience as a multi-unit operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more Foodservice Solutions® visit The Grocerant on LinkedIn or @Grocerant on Twitter

Technology helps Restaurants stifle Grocery Store Sales

Today restaurants outnumber grocery stores 27 to one.   Simply put restaurants have become more successful in online digital customer adoption.   I admit the restaurant format is more conducive given the limited number of SKU’s, however it is and remains the primary pantry buster of the grocery sector. 

The fact is overall growth of the restaurant sector continues to flourish with new non-chain restaurants and independent non-traditional fresh food retailers according to US Census numbers.  

Regular readers of this blog know that consumers are fresh food focused. The increased demand for grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food continues to fuel all sectors of retail foodservice growth according to NPD. Many legacy grocery retailers continue to treat grocerant niche fresh food as if it were a CPG product. 

Consumers understand fresh, they like fresh even more important they believe in transparency.  Treating grocerant niche fresh food like a CPG product has created a void in customer relevance for companies the ilk of Harris Teeter, Whole Foods, Mariano’s, and Sprouts Farmers Market as all are trying to reestablish relevance by evolving formats and concepts.

Salesforce’s Marc Benioff warned this week at Davos that “Technology’s frantic speed will create ‘digital refugees’ with no clear fix.” Foodservice Solutions® Grocerant Guru® askes have restaurants leveraged digital technology to garner a larger Share of Stomach already? 

Millennials migrate to faster, fresh food at and increased rate according to Foodservice Solutions® Grocerant Guru®. Pew Research Center found “Consumers between the ages of 18 and 35—so-called millennials—are expected to spend more than $200 billion annually starting next year and $10 trillion in their lifetimes” Roughly 77% of consumers ages 18 to 29 have purchased something on their phones, while 64% of consumers 30 to 49 have done the same.

That compares to a drastically smaller portion of older Americans that are doing so. Only 36% of consumers 50 to 64 years old have bought something on their phone and only 17% of those 65 and above.

The team at Foodservice Solutions® contends that if grocery stores continue to treat fresh prepared food like a CPG product of a bygone era they will continue to capitulate market share to chain restaurants, convenience stores, and new non-traditional locations.  

It appears that many legacy grocery stores will soon become a favorite spot for seniors, food stamps recipients, and ‘digital refugees’. If that is the case and if ‘digital refugees’ begin to expand at opposite ends the conundrum for grocery stores is that this are no margins in those groups.

Here is one example from Pew, “63% of consumers under 30 years old say they’ve used their phone in stores to check online reviews of a product. Only 13% of Americans over the age of 65 have done the same.”  The same numbers can be used when looking for mix and match meal components.

Millennials and GenZ continue to drive customer migration to grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food meals and meal components according to data gleaned from over 6,750 Grocerant ScoreCards.  Digital food discover drives path to purchase and right now the restaurant sector is leading the way. 

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

Eight Clues for Grocerant Niche Mix and Match Bundling Success

Success does leave clues and the team at Foodservice Solutions® continually pointed out over the past several years that empowering consumer choice around grocerant niche Ready-2-Eat and Heat-N-Eat fresh food would garner incremental customer transactions, larger share of food dollars, and larger share of stomach.

Today the consumer continues to evolve and grocerant niche consumers reflect the undercurrents of evolving consumer demands.  Those demands include a more diversified shopper population, new non-traditional competitors, and high shopper expectations around freshness, convenience and transparency. Steven Johnson Foodservice Solutions® Grocerant Guru® outlined our evolving landscape:

1. Evolve or Fade Away: Increased completion had elevated the blurring of retail channels expanding foodservice fragmentation.  According to a study by Deloitte, consumers on average shop at four to five different types of stores to fulfill their grocery needs. Foodservice Solutions® team has found increased SKU’s of grocerant fresh food at restaurants, online Meal Kits, drug stores, dollar stores, supercenters, discount, specialty, convenience, club stores and Mobile e-commerce ‘home’ stores.  

2. Ethnic Melting Pot:  The US Census reports the undercurrents of our evolving demographics will continue broaden, expanding the population of “multicultural consumers.” In fact in a new Nielsen study found that the “buying power from the Hispanic, Asian and African-American populations will be 17% of a $4.2 trillion market. The Melting Pot of opportunity is overflowing with grocerant niche success points according to the team Looking A Customer Ahead at Tacoma, WA based Foodservice Solutions®.

3. Halo of ‘Better-for-You’: Consumer tell us that grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food is ‘better-for-them’ as the halo includes not doing dishes or cooking from scratch. Acosta found that “nearly one-third of shoppers surveyed considered leaving a store if fresh and healthy options were not available.”

4. Customization and Personalization:  Retailers the ilk of Green Zebra Grocery, EveryTable, and Wegmans continue to attract loyal customers with convenience, quality, value, and customer service. Customization and personalization via mix and match meal component bundling are hallmarks of success found within the grocerant niche according to the Grocerant Guru®.  Restaurants continue capitulating customers as consumers seek fresh food in non-traditional fresh food retail outlets that are becoming more of a priority.

5. Price and Private label: Trader Joe’s private label products have the ‘halo of better-for-you’ according to non-client information aggraded from over 6753 Grocerant ScoreCards. A recent Nielsen/PLMA study, sales of private label products generated a record $120 billion last year, and continued to outpace national brands. Trader Joe’s, Aldi, Lidl will continue to increase market share leveraging price and quality private label foods.

6. Hand Held Marketing:  Mobile smart phones continue to garner adopting in fact according Nielsen 85% of Millennials have a smart phone. Consumers of all ages continue to embrace digital technology and social media as a means to connect and communicate about food or when looking for food. A recent study showed that 37% of shoppers use their mobile devices in store for comparing prices, searching for product information, or checking product availability.

7. Mini Meals at Mini Locations:  Rent is expensive and more and more retailers have no locations or smaller locations virtual dining from a home or local kitchen is a growing trend. According to a Package Facts study, even the average square footage of supermarkets has fallen since 2006 and is now approximately 46,000 sq. ft. Even smaller size formats of 25,000 sq. ft. or less, modeled by chains like Trader Joe’s, Aldi’s and Lidl, have proven to be successful.

8. The Price Value Service Equilibrium is Resetting:   Foodservice Solutions® team identified, quantified and qualified a new formula for the foodservice Price, Value, Service, Equilibrium. That formula can be found with this link. Consumers are dynamic not static and food retailers must evolve their brands to both maintain and garner consumers frequency levels.

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for a Grocerant ScoreCard , Grocerant Index 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

Portability, Packaging, Profits, Rutter’s Farm Stores Success

Foodservice Solutions® Grocerant Guru® Steven Johnson says “success does leave clues and Rutter’s Farm Stores expanding fresh fast food portability with new packaging empowers consumer choice while highlighting the key driver of the grocerant niche mix and match meal component bundling.”

Millennials in search of fresh food discovery will find the new Grab-and-Go pouch (bags) at Rutter’s convenient, transparency, elevating the halo of ‘better-for-you’ and elevating the food program once again at Rutter’s Farm Stores according to Johnson.

Mix and Match hot food meal component bundling is how Rutter’s will be "attacking snacking".  Consumers continue to eat smaller meals, smaller plates, and have smaller households according to our Grocerant Guru® these new grab-and-go pouches for hot fresh-food items elevate, accommodate, and integrate fresh prepared food ‘snacking, small plates in to the daily lives of consumers meal planning.

This new state-of-the-art fresh prepared food packaging, “the Rutter's-branded bag is breathable, microwavable and re-sealable, holds heat well, and has a handle for optimum convenience and freshness.”

Ryan Krebs, director of foodservice for Rutter's, stated “I think it’s a breakthrough”.  The team at Foodservice Solutions® agrees. Krebs continues "I've seen so many things people have tried that just don't seem to work," Krebs said of the bag's development process. Many kinds of hot food carryout packaging uses cardboard, with a plastic window for integrity, but results in greasy, soggy food due to a lack of ventilation.

It has been widely reported that “Rutter's new bag is "sturdy but incredibly thin" and has ventilation holes to avoid trapping steam inside, keeping the product crispy. The window allows customers to see the product, and the branding serves as a miniature walking billboard.”

Fresh, Fast, Portable Ready-2-Go the bag sits in the hot hold kiosk, offering the appeal of freshly cooked items such as chicken wings and mozzarella sticks, but without forcing customers to wait several minutes for their order to be freshly prepared.

Krebs continued, adding that he wants “Rutter's customers to visit the stores for "a hot snack, a quality snack," and not just packaged snacks like candy and potato chips.” "This one I am excited about even though it's a bag," Krebs said. "It just screams technology and advancement."

The new pouch /bag is driving change as Rutter's is adding 13 new items to its hot grab-and-go program: mozzarella sticks, BBQ beef short ribs, chicken wings, sweet corn bites, onion rings, fried sweet bologna, jalapeno and cheese bites, French fries, boneless chicken chunks, chicken tenders, macaroni and cheese bites, hash browns and fried pickles. Now that’s empowering mix and match bundling.

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 Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Collision Course Wawa or Race Trac

Retail foodservice growth at times can be elusive, particularly when two companies that had not been direct competitors begin opening stores in new territory as direct competitors.  In the case of Wawa and Race Trac in Florida consumers will decide if they want to continue to roll, roll, roll away with a roller grill or refresh with fresh, fast, flavorful food offerings according to Foodservice Solutions® Grocerant Guru® Steven Johnson.

The convenience store sector continues to garner customers from the restaurant sector increasing from the fast food companies the ilk of Popeyes Louisiana Kitchen, McDonald’s, Wendy’s, and Burger King according to Johnson. 

Johnson continues saying “the convenient store sector ability to leverage grocerant niche mix and match meal component offerings will position the sector to outperform both the restaurant sector and grocery store sector for growth for at least the next four years or until either of those sectors evolves their business models to reflect a new retail environment.  That environment is the grocerant niche.  This has become a battle for a larger share of retail food dollars and larger share of stomach.

It’s a battle of retail food concepts that represent yesterday vs today and tomorrow. In the case of Race Trac and Wawa at this point Wawa has been leading the way with fresh, fast, flavorful food.  However Race Trac is moving forward fast while they still utilize a vestige of the past the ‘roller grill’ they are evolving fast with fresh food offerings as well. 

Consumers will decide the pace of change from vestiges of yesterday’s roller grill to Ready-2-Eat and Heat-N-Eat fresh prepared food according to Johnson.  Many retailers rely heavily on consumer favorites from the roller grill that are hand held Ready-2-Eat food perceived as fresh garnering simple quick profit from reduce labor and food cost.  While others cultivate customer loyalty, frequency and incremental profit focused on fresh.

In the case of RaceTrac their customers are evolving albeit somewhat slower than 7-Eleven, Wawa, or Sheetz. In new insights from RaceTrac found that its “TracFanatics purchase a wide range of items during the early hours of the day — like hot dogs, energy drinks and bags of ice. The purchases were made between 5 a.m. and 10 a.m.” 

In addition the insights found:

1.        RaceTrac customers are all about caffeinated drinks in the morning: 60 percent bought coffee, 26 percent bought fountain drinks and 14 percent bought energy drinks.

2.       Three in five people chose hot dogs over doughnuts in the morning,

3.       16,901 roller grill items were sold in the morning compared to 9,694 doughnuts.

4.       Customers purchased 30,360 pounds of ice daily between 5 a.m. and 10 a.m. thus Mix & Match

5.       In one year, TracFanatics ate 588 miles of roller grill items.

6.       Last winter TracFanatics drank 1 million gallons of coffee.

Race Trac continues to evolve as it does and we have previously noted it will continue to garner incremental customers.  What is important to note is that seemingly the entire convenience store sector is evolving with more food, fresher food, while expanding mix and match meal component offerings creating a platform that continues to outperform others within retail foodservice.  Does your brand look more like yesterday than tomorrow?

Are you growing incremental customer counts, top line sales, bottom line profits, while garnering positive word of mouth advertising?  That what change does.  Customers are dynamic your brand must be dynamic as well.  Do you need outside eyes for inside profits?  

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

Grocery Store Conundrum Fresh Food

Non-traditional fresh food outlets continue to garner sales from legacy grocery stores for one simple reason. That reason is legacy grocery stores simply don’t do a good job with fresh food.  Here is one example from grocery research company Blue Yonder:

“Specifically, 81% of shoppers said they are unable to get produce they want in store, online and at discount retailers, yet 91% of grocery retail professionals are confident they are meeting customer expectations of availability.”

The Blue Yonder research report went on to say “Shopping experiences both online and in-store are not only failing to meet customer expectations of purchasing goods anytime, anywhere, but 35% of shoppers stated they are let down at least once a week. Sixty nine percent (69%) said there is a lack of availability online, while 85% found the same struggles in supermarkets.”

They continued “Replenishment practices are also lacking across supermarket chains, as 30% of all shoppers abandoned their carts if they were unable to find the produce they wanted. Meanwhile, 28% saying that they felt unsatisfied when buying a similar product as a substitute, data revealed.” 

Here is what was shocking fact they were lacking produce availability had much wider implications for profitability. “It has prompted 20% of shoppers to stop shopping with a retailer permanently or for a period of time. This figure rises to 31% for online retailers,” the report said. 

Legacy retailers that can’t even stock fresh produce properly surly cannot be expected rollout a quality grocerant niche Ready-2-Eat and Heat-N-Eat fresh food program on their own.  Thus, other are and doing a good job as they garner market share depriving grocery retailer’s pantry sales as well.  Are you ready for Outside Eyes for Inside Profits?

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 Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Grocerant Fresh Food Engagement Drives Customer Migration

Millennials and Gen Z quest for discovery includes engagement with a halo of ‘better-for-you’ according to Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Grocery stores service deli’s, Convenience stores, Restaurants, Dollar Stores, and Drug Stores are all increasing the number for fresh food SKU’s that that offer seeking a larger share of dollars and share of stomach according to Johnson.

Echoing those findings recently was Colin Stewart, SVP at Acosta who stated ““The experiential factor is driving today’s shoppers to make food choices rooted in what will bring them personal satisfaction and enjoyment,”… “As we head into 2017, it’s important that brands and retailers think about how their product offerings contribute to grocery shoppers’ positive experiences from the moment the item is spotted on the store shelf to when it reaches their kitchen tables.”

In fact a recent report from Acosta they detailed many of the findings for 2017 and here they are:

1.        Forty-five percent of shoppers eat healthy foods even though they are more expensive.

2. Thirty-eight percent of shoppers agree, "I often buy natural/organic products because I know they are better for me."
3. On a typical shopping trip, Millennial shoppers indicated that 39 percent of the items in their grocery carts were organic products, while total U.S. shoppers indicated just over 25 percent of the items in their typical carts were organic products.

4.        Twenty-six percent of Millennial shoppers indicated they usually stay on the store perimeter — such as the produce, meat and dairy sections — only visiting select center-store aisles during stock-up trips.

5. More Millennial shoppers are familiar with non-meat diet choices, with 18 percent following a non-meat/low-meat diet daily.

6.        Nine in 10 shoppers indicated shopping most often at the same grocery retailers as last year.

7. Fifty-four percent of shoppers enjoy the experience of shopping for ingredients to prepare the meals they have planned.
8. Seventy-seven percent of shoppers are buying the same grocery brands as last year.
9. Thirty-seven percent of shoppers want their grocery brands to be transparent about their ingredients, processing or production.
10. Forty-six percent of shoppers agreed they want their grocery brands to be ones they can trust.
11. Thirty-five percent of shoppers buy grocery brands that are socially responsible.
12. Cooking as a culinary experience, not a chore
13. Many shoppers enjoy the experience of planning and creating meals at home.
14. Fifty-six percent of shoppers enjoy the experience of planning meals for their households.
15. Sixty percent of shoppers enjoy preparing new dishes.
16. Forty-five percent of Millennial shoppers want to take cooking classes to learn how to prepare new meals and dishes.
17. Fifty-four percent of shoppers often check out new items in the grocery store.

18.     sixty-one percent of shoppers have redeemed digital/mobile coupons in the past month for grocery items.

19.     Fifty-nine percent of shoppers who have grocery e-commerce available said they had ordered grocery items online in the last year.

20. Fifty-three percent of shoppers get recipe ideas online.
21. Nineteen percent of shoppers — and 25 percent of shoppers with children — have posted food or recipe content to social media.

Stewart continued “From online grocery ordering and a desire to explore new foods, to natural products and socially responsible brands, consumers are at the wheel when it comes to steering the CPG industry in a new direction”.  That direction has been and continues to be the Grocerant niche fresh prepared food.  I guess success does leave clues and www.FoodserviceSolutions.us is one heck of a good clue.

www.FoodserviceSolutions.us  is the global leader in grocerant niche business development.  We can help you identify, quantify and qualify additional food retail segment opportunities.  Has your company had a Grocerant ScoreCard completed?  Want one?  Call 253-759-7869 Email: Steve@FoodserviceSolutions.us