Foodservice Disruption the “Hermit Consumer”

 

Fred Diamond, Senior Food Consultant Consumer Custom Solutions, at GlobalData has identified, quantified and qualified a new type of consumer that has emerged from the post-pandemic recovery. Referred to as the “hermit consumer”, they are staying in more and going out less with continued implications for foodservice.

Regular readers of this blog know that Steven Johnson Grocerant Guru® likes data, facts, and insights.  Fred Diamon, has described the state of the food industry and the consumer with a term that resonates extremely well with him and the team at Tacoma WA based Foodservice Solutions®.  Johnson wants to share Diamond’s findings with you and believes you will find comfort in a view often discussed by industry insiders but rarely published.  So here we go, enjoy:

As we begin 2024 there are several reasons to believe that, generally speaking, economic conditions will become more favorable. Global inflation is set to continue falling, and the supply-chain issues left over from the pandemic years are being resolved. However, it is becoming ever more apparent that many foodservice channels are not on the path to “recovery” in the way many expected during the initial tumult of the pandemic.

According to leading data and analytics company GlobalData, the global foodservice industry has not returned to any kind of pre-pandemic normalcy during 2023. Value sales have increased just 3% since 2019 with overall transactions down 3% over the same period. Revenue from dine-in sales is down 12% compared to 2019 while notably revenue from takeaways is up 46%.

“The idea of a post-pandemic recovery for the foodservice industry assumes that 2020-21 was a blip - an exogenous, once-in-a-lifetime event which would halt progress for a year or two before normal trends and consumer behavior resumed,” said Fred Diamond, Senior Food Consultant Consumer Custom Solutions, at GlobalData. “However, during that period something changed. We have changed. People are still spending, and still consuming, but in a radically different way. This new type of consumer has been termed the "hermit consumer" giving rise to the "hermit economy"."

Behavioral change on a global scale

The hermit economy overlaps with concepts like “cocooning”, a word used to describe the phenomenon of people staying in more and focusing on improving the comfort and convenience of their homes at the expense of outdoor experiences. Examples would include someone foregoing eating out and instead using the savings over time to improve their kitchen; or substituting a supermarket “fake-away” meal kit for an actual takeaway. Concepts like these also overlap with the effects of inflation on consumer behavior.

Globally, 46% of consumers stated they will be eating out less frequently over the next three months, and a further 11% stated they will stop altogether, according to GlobalData’s Q4 2023 consumer survey.

Diamond comments: “So, in 2020-21, people stayed in more because of the coronavirus. In 2022-23 people stayed in more because of price rises. This is four years of behavioral change on a global scale. The idea things could snap back to the way people saw the future from the vantage point of 2019 has to be abandoned, and the new landscape embraced."

Impact of the “hermit economy” on key regions

In Western Europe alone, foodservice transactions are down 9% for dine-in meals and up 23% for takeaways in 2023 compared to 2019; all while overall transactions are down 3%. Similar trends are seen in Asia and North America.

Diamond continues: “In a way, this is no surprise. The major beneficiaries of lockdowns, such as delivery platforms, have of course aimed to maintain their new-found dominance. The rise in "ghost kitchens", which are delivery-only foodservice outlets, has also served to cement this new landscape. But this is not simply an equal shift from dine-in to takeaway. In many regions, such as Asia and Europe, foodservice markets are down on 2019 levels.”

This is a combination of both a mass exodus from one channel to another and a general loss of interest in the sector. This loss in interest could be attributed in part to the rise of the “hermit economy”.

What can foodservice operators do about it?

Product innovation is something that should always be considered when facing the dual challenges of falling footfall and reduced spending. Limiting the time when new menu items or offers are available can create artificial scarcity and prompt consumers to get out and spend while the product that caught their interest is still available. In the process, consumers will be susceptible to further influences from the brand, which could help to build customer loyalty.

Appealing to concepts such as authenticity and heritage can resonate strongly with consumers. Consumers all over the world are becoming skeptical of products that appear “mass-produced” or otherwise unoriginal. Outlets also need to lean into their ties to the community they serve. This can be achieved through sourcing ingredients locally, reflecting local culture in the food served, or manufacturing some part of the food nearby.

75% of global consumers say that authenticity is “essential” or “nice to have” when deciding which product to purchase, according to GlobalData’s Q4 2023 consumer survey.

Finally, operators without a takeaway or delivery option need to introduce one. One way of doing so is to join a third-party delivery app. The cut they take would have to be either absorbed by the business or passed on to the consumer, which is not always desirable. However, the price of having no visibility online can be much greater.

Diamond adds: “Before attempting to cut prices even further, operators need to keep in mind that consumers already have the ability to choose cheaper food options; this is why concepts like "fakeaways" exist. Indeed, actual takeaways have historically been cheaper than a dine-in experience. Therefore, to entice the hermit consumer back into their outlets operators should focus on conveying that they have good portion sizes, while also highlighting the best ingredients they have to offer, contrasting them with what consumers might find in cheaper alternatives."

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors. CCS24001

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

Can Grocerant Niche Meals and Meal Components Save the Grocery Store

 

Regular readers of this blog know that legacy grocery stores have lost market share to non-traditional formats including restaurants, convenience stores, dollar stores and fresh food delivery services that provide grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  

One bright spot in 2023, for the grocery sector was deli prepared foods, their home for grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food. Let’s see why:

According to research from CreatorIQ:

1.       More than 78% of participants use delivery services every so often, while just 21.2% say they never order delivery.

2.       The survey found that Americans spend over $1,566 annually on food delivery services, with an average order cost of $35.42. On average, they order 3.7 times monthly, and delivery eats up 3.7% of their annual income.

3.       When ordering delivery, participants are most often in the mood for American (26.8%), pizza (23.2%) and Chinese (15.3%) out of every other type of cuisine. Regarding the most popular food delivery app, we found that DoorDash was the most widely used (45.5%), followed by direct orders placed through the restaurant (21.1%).

4.       Some Americans take their food delivery game seriously, with 23.5% members of delivery programs like Grubhub or Uber One. An Uber One membership offers attractive benefits like a $0 delivery fee on Uber Eats and up to a 10% discount on eligible Uber Eats delivery and pick-up orders.

Long wait times, inaccurate orders, service gaps and a lack of human interaction frustrate guests and pose challenges for operators and staff.

a.       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.

b.       68.2 % of consumers would order alcohol with a meal or meal components from a restaurant if available when ordering.

c.       Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.

d.       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.

e.       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.

f.         Seventy-three percent of retail prepared food purchases are taken to go

g.       88.2 % of consumers prefer hand held food over sit-down meals with a knife and fork

Stop here and just consider the ramifications for legacy grocery stores if consumers deep down for most meals do not want to use a knife and fork for most meals.  Now let’s look at some more grocery info:

Deli market share in traditional supermarkets fell to 31.2% in 2023, down from 33.4% in 2019, and bakery share fell to 38.7%, down from 41.1%.

Across all outlets, deli prepared was up 5.6% in dollar sales and 1.2% in unit volume for 2023. That compares with a 3.6% gain in dollar sales for the deli category overall, and a decline in 0.9% in unit volume. Among prepared foods, strong dollar sales gains in prepared meats, sandwiches, and pizza helped offset declines in breakfast and combo meals.

Grab-and-go cheese also saw gains in both dollar sales and unit volumes, up 3.5% and 0.6%, respectively, and several deli entertaining sub-categories also saw gains in both dollars and units, including trays and spreads.

Bakery, meanwhile, notched dollar sales gains of 7.1% for the year across all outlets, and a decline in unit volumes of 1.1%. How much time do you want to spend in the kitchen this week?  What is the future of the legacy grocery store?  We know one thing, it is not, a Kroger and Albertson tie up. Nor is Walmart as it is positioned today (in the middle) the answer. 

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

Expanding Dayparts Subway will find Success

 

Mini-meals, snacks, treats are the perfect way today to expand dayparts and Subway is doing all the right things by looking a customer ahead giving today’s customers just what they are looking for fresh fast food and beverages that both satisfies and or treats at a cost that complements time saved going somewhere else. Building brand relevance requires a clear focus on consumers wants, desires, and need-sets according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Subway announced a big customer focused relevant menu update with the debut of Sidekicks, a collection of three new footlong snacks available only at Subway restaurants nationwide on January 22. Subway Sidekicks give fans more of what they love about Subway as the perfect pairing for their favorite footlong, or as a sweet and savory snack any time of day.   

To take snacking to new lengths, Subway’s culinary team joined forces with Cinnabon and Auntie Anne’s to create a craveworthy new twist on their classic snacks to drive new electricity into daypart sales. Subway also spent a year perfecting the recipe for its Footlong Cookie to complete this irresistible new addition to Subway’s menu that’s big on size, taste and value: 

·         A new Cinnabon Footlong Churro for $2, is baked to perfection, served warm and topped with Cinnabon’s world-famous Makara cinnamon and sugar. 

·         The Auntie Anne’s Footlong Pretzel for $3, reimagines Auntie Anne’s buttery and salty classic, served with a side of Subway’s Honey Mustard that takes each bite to another level. 

·         The Footlong Cookie for $5, is back nationwide and better than ever after popping up in select restaurants on National Cookie Day in 2022 and 2023 – it’s thick, gooey and packed with chocolate chips. 

“The introduction of Sidekicks builds on six decades of equity and expertise in all things footlong,” says Douglas Fry, President of Subway North America. “This whole new category on our menu offers Subway fans something they can’t get anywhere else and kicks off a year of culinary innovation and delicious new menu items. 2024 may be the most exciting chapter yet in our growth story.” 

Choice Drives Convenience

What a Larger Share of Stomach

Subway’s multiyear transformation journey began in 2021 with an overhaul of its pantry of ingredients and continued to crescendo with significant changes to its entire guest experience, whether dining in or ordering online. While previous menu and experience updates have been focused on Subway’s signature sandwiches, Sidekicks puts a deserved spotlight on the rest of Subway’s menu.  

“We’re excited to team up with Subway to bring guests the fun and flavor of two of our iconic brands – Cinnabon and Auntie Anne’s,” says Dave Mikita, President of International and Retail Channels at Focus Brands. “These fan-favorite snacks will delight in new, craveable ways.”  How do you plan to garner new customers? What is your cost of customer acquisition?

Do you want to keep your current customers while building new electricity? According to Johnson, “Brand relevance is in part driven with innovation in new food products in combination with new avenues of distribution all of which are the platform for the new electricity.” 

Johnson stated “that in my minds-eye the new electricity must be very efficient for the supply and includes such things as fresh foods, developing brands, unique urban clothing, grocerant positioning, fresh food messaging, autonomous delivery, cashier-less retail, plates, glasses, cash-less payments, digital hand-held marketing. Don’t limit your ideations to just a new menu item. Think local, grow with others that are successful around you.

All retailers to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing fresh food that is portable, fresh, with differentiation that is familiar not different. 

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

Digital Natives are Drawn too Frictionless Foodservice

 

Are you giving your customers what they want?  If your brand wants to be around in 10 years you had better be focusing on what digital natives like, want, and expect from their brands.  According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® when it comes to foodservice Gen Z and Millennials have discovered self-checkout and frictionless menu and meal planning and they want it. Once again in a new study commissioned by Avery Dennison shows that most consumers have tried self-checkout.

According to the new Avery Dennison study, Gen Z consumers don’t just like frictionless shopping – they’ll switch stores if they can't get it. A survey commissioned by digital solutions company Avery Dennison found that 52% of consumers born after 1996 would likely buy groceries at another store that offers DIY checkout. 

The data went on to show that 49% of this young cohort of shoppers tends to spend more money with retailers offering an automated or connected checkout experience. Additionally, 52% agreed that connected stores would make them more loyal to a particular retail brand.

While Gen Z may be leading the way, but shoppers across demographic groups appreciate the convenience of self-checkout. Two-thirds of survey respondents said they would choose retailers that offer self-scanning at the end of their grocery shopping trip, while 59% said the same about the ability to scan items as they shop. 

When consumer fell time starved, speed is the main reason why shoppers gravitate towards frictionless buying. More than a third – 34% – of those polled also noted they don't like to stand in line for regular checkout and 33% said that they appreciate less interaction with people.

Life is not perfect, there are some drawbacks of self-checkout, most respondents cited the difficulty in getting help from a store employee if there was an issue with their transaction. Only 18% responded that there is no benefit to this form of in-store purchasing.

Francisco Melo, president, solutions group, at Avery Dennison, stated, “Considering that most people haven’t yet had the opportunity to try a full check-out free store, our research shows a high percentage would be more likely to switch retailers for the experience, which demonstrates a clear shift in consumer expectations. At the same time, a growing number of leading retailers are turning to digital ID solutions to truly transform the customer experience.”

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

Coca-Cola Solid Brand, Solid Partnerships, Drive Branded Continuity

 

If you ever wondered why, you might pay just a little bit more for a global legacy branded product, stop wondering.  You don’t become a global brand without first producing a quality consumer approved, accepted, and apricated product. According to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® they become a global successful brand by focusing on consumers and clients consistently with a continuity in proactive branded messaging.

The Coca-Cola Company recently announced the launch of “Coca-Cola Leader Lab, a people-centric leadership program that addresses a significant issue facing the future of foodservice: attracting, developing and retaining an engaged frontline workforce.

Labor challenges, particularly the high turnover rates of frontline service employees, continue to be primary concerns of the foodservice industry. According to the most recent National Restaurant Association survey on restaurant business conditions, more than six in 10 restaurants are understaffed and 79 percent of operators say their restaurant currently has job openings that are difficult to fill. While wages continue to be a driving factor in attracting talent, 70 percent of the variance in frontline employee engagement and performance is attributed entirely to frontline managers (Gallup Workplace, 2022). 

Coca-Cola saw a tangible opportunity to support its foodservice and on-premise partners in solving this issue. “No single foodservice brand can fix this problem on their own. As more of Gen Z enters the workforce and steps into leadership roles, the entire industry needs to think about how they are attracting and developing their current and future frontline talent,” says Dagmar Boggs, Coca-Cola’s President of Foodservice and On-Premise, North America. “As a total business partner dedicated to helping our customers grow their brands, Coca-Cola is uniquely positioned to provide an industry-wide solution that will help equip and transform our current and future foodservice leaders.”

Through actionable, video-driven content, Coca-Cola Leader Lab helps develop frontline people-leaders by giving them the skills they need to grow in their careers and help others grow in theirs. The program is hosted on an easy-to-navigate website, and its quick-hitting, “bingeable” video modules account for the minimal margin of time foodservice employees have for additional training. 

If you want a Larger

SHARE OF STOMACH

Partnerships Can Drive Success

The training modules focus on building core capabilities in an engaging and relevant way for a multicultural audience of emerging Gen Z leaders. Participants will gain insights into six transformational leadership skills, with an optional add-on module on culture building:

1.       Casting Vision: Starting a leadership growth journey by knowing the direction and why

2.       Critical Thinking: Turning obstacles into opportunities that improve team performance

3.       Communication: Communicating in a way that is simple, specific and connects to both hearts and minds

4.       Conflict Resolution: Understanding conflict types and how to create a plan for resolution

5.       Collaboration: Knowing how, where and when to include others

6.       Coaching Mentality: Embracing different perspectives and actions to achieve specific results

“It’s no secret that a brand’s customer experience will never be better than its employee experience. Employees are naturally wired for growth, and there’s a critical need for foodservice brands to improve how they engage and foster the professional growth of their frontline teams,” said Boggs. “Coca-Cola Leader Lab gives our partners a meaningful way to invest in the frontline individuals directly responsible for driving their customer loyalty.”

If you have not tried Coca-Coca’s Leader Lab yet, it is free to all Coca-Cola’s Foodservice and On-Premise Partners.  The team at Foodservice Solutions® thinks you should.

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.