Quality Fresh Ready-2-Eat Food in Convenience Stores.

Harkin back to the days that employee’s uniforms were back & white.  Employees all dawned paper hats, a time that the roller grill was introduced and ready-2-eat hot prepared food was introduced in the Convenience store channel.  It was a time when the availability of food staples in extended hours of operations drove sales in this dynamic channel. 

The Convenience store channel continues to be dynamic; currently it is booming in the prepared ready-2-eat and heat-N-eat food sector or what I call the grocerant sector.  I believe that differentiation does not mean different it means familiar within each food niche and this one is no different.  Consumers young and old are demanding more choice, fresher quality and more contemporary food options and convenience stores are stepping up. 

Niche and industry global leader 7-Eleven de-emphasize the roller grill and recently has introduced Fresh Bananas, Pizza, and Chicken Wings.   They are testing in new pilot stores their “latest insights into market trends to provide a range of 45 freshly prepared food products, including a hot breakfast menu and toasted sandwiches cooked to order.” This test includes a “café-esque range of hot lunch alternatives and will combine with Lavazza to offer barista-made coffee.” 

Sheetz & Wawa both offer a full range of prepared food choice including fresh salads and fruit options. Good companies do good things over and over again.  Recently Wawa CEO Howard Stoeckel detailed several efforts the convenience store chain is undertaking in during the economic slump the US is in, He stated "we're performing better than the vast majority of retailers,"  Fresh prepared ready-2-eat and heat-N-eat food products are strongly contributing to on-going sales and profit success.

Outside eyes can deliver top line sales and bottom line profits.  Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

Legacy Fast food is in the throes of drive-thru Darwinism

Times they are a changing as the song goes.  Regular readers of this blog understand the rapid currents of growth taking place within the grocerant niche filled with ready-2-eat and heat-N-eat fresh and prepared food.  Part of that niche includes QSR’s, however that seems to be the one sub-sector struggling with repositioning while attracting new consumers.

Tiffany Hsu of the Los Angles Times wrote the following which all of my regular readers will enjoy

“Fast-food eateries are in the throes of drive-through Darwinism as more upscale upstarts, such as Chipotle Mexican Grill and Panera Bread Co., grab market share from the likes of Taco Bell, Subway and Wendy's.

Chains that are fancier than fast-food options but cheaper than sit-down alternatives are part of a hybrid sector known as fast-casual that is maturing into one of the food industry's strongest.

That category is tapping into growing demand for more healthful, specialty foods that are still speedily served and moderately priced. Fast-casual is steadily poaching fast-food customers looking for better quality and sit-down diners seeking cheaper prices, said NPD analyst Bonnie Riggs.

"There's no end in sight to their growth," Riggs said. "They've delivered on consumers' value expectations far more than most fast-food places." …

But the boundaries are blurring. Eateries such as Carl's Jr., with its Six Dollar Burger, and foodie-favorite In-N-Out straddle the line between fast-casual and fast food. Drive-throughs are appearing at Panera locations. Some fast-casual chains are experimenting with delivery, usually an option provided by sit-down restaurants.

"We're going to continue to see more fuzziness in how to define these restaurants," said Robert L. Sandelman, chief executive of food service research group Sandelman & Associates.”  Folks let’s face it this is the GROCERANT NICHE.  Want to get caught up on the niche read some of our pervious blogs. 

Outside eyes can deliver top line sales and bottom line profits.  Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

Duane Reade food is for those who are ready-2-eat.

Duane Reade is part of $72 billion dollar Walgreen Company, which acquired the chain of over 250+ stores nearly two years ago.  While Walgreen’s has 450+ CafeW’s  located within some of their 7,500+ stores when it comes to ready-2-eat or heat-N-eat  food innovation Duane Reade takes the lead for Walgreens.

Duane Reade has put fresh food on the menu not just the shelves. Select Duane Reade locations are now serving sushi, sandwiches, beer and frozen yogurt.  Walgreen’s with Duane Reade and CafeW’s is clearly helping grow the grocerant niche.

 All food retailers should be taking note because as Adrianne Pasquarelli reported and I quote “Linda Alexander used to grab lunch at one of the numerous eateries near her office on Broadway. But lately, the public relations executive is buying her grub at Duane Reade. 

“It's insanely convenient,” said the foodie, who favors the chain's salads, frozen TV dinners and Eli Zabar sandwiches. “They're cheap as hell, which is a problem, because I certainly want to patronize the local delis, but Duane Reade is much cheaper.”

Duane Reade's ready-2-eat prepared fresh food options are obviously a big hit.  Paul Tiberio, senior vice president of merchandising and marketing at Duane Reade stated “that already almost a third of Duane Reade's sales come from food, including its own private label Good & Delish branded products. “We certainly are making things more convenient” for consumers, he said. Ok, yes these stores are in New York City, but have you seen the food isle at your local Walgreen?

Foodservice Solutions® 5 P’s of food marketing: Product, Packaging, Placement, Portability and Price are all utilized by Walgreens and Duane Reade.   Step by step, Walgreens has picked up the clues and is turning into a local grocerant nationwide.

Outside eyes can deliver top line sales and bottom line profits.  Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

Where is the beef: are there too many burger joints?

When it comes to ready-2-eat fresh prepared food, there is nothing that sells better in the U.S. than the hamburger.  In fact two of 2011’s fastest growing restaurant chains sell hamburgers as their mainstay product Smashburger and Five Guys Burger and Fries.

However the USDA reports that over the past 10 years, per capita beef consumption at 57.4 lbs., down 13 percent and down about 25 percent from 1980. In 2012, USDA predicts, Americans will eat 54.1 lbs. of beef on average.

There is a confluence of events particularly the rise of the grocerant niche pulling consumers away from traditional home cooked meals and cooked from scratch meals with beef as the main dish.  Today a plethora of outlets offer ready-2-eat and heat-N-eat fresh prepared meal components that are utilizing leaner meats as well as vegetarian offerings and many meals / components that simply focus on the “better for you” health-conscious.

Chris Calkins professor at University of Nebraska said that “Beef suppliers, like Tyson Foods, JBS, Cargill, and National Beef, are carving up beef carcasses in interesting new ways. Carcass portions that were once meant for ground meat or roasts, such as rounds and chucks, are now sliced into cheaper cuts of steaks for the American palate. These less expensive cuts became popular during the recession.”

However the recession will end.  Grocerant retailers are not going away they are expanding offerings, locations and even more competitive pricing. What will become of the over supply of burger joints?

Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

McDonalds heating up Denmark

It not so cold this year in Denmark now that McDonalds is heating it up with a little spice.  Customers of the Denmark McDonald’s will be the first to try their new Big Hot Jalapeno Burger or Chicken Jalapeno Burger. Made with sliced chiles, the new additions to McDonald’s menu will hopefully signal an openness to add more spiciness to the menu.

With a brand as large as the Golden Arches, it’s always a hard to find somewhere test a new item.  Let’s face it McDonalds has a focused yet bland menu.  With a global audience it is hard sell to bring in an item with any exemplary amount of “heat” for fear of alienating their customer base. We’ve seen a few LTO’S that were spicy here in the States.  I’m guessing that if it fly’s well here it will roll out on a globally. 

When the world is ready-2-eat McDonalds is there!  Jalapeno Burger Lovin it!

Here is the YouTube line to the TV commercial running with the promo: http://www.youtube.com/user/McDonaldsDanmark?feature=watch

Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

Jollibee Foods Corp. plans to grow Pho24 in 2012

Philippines fast-food ready-2-eat giant Jollibee Foods Corp. (JFC) has a road map for growth with a $60-million deal to buy half of the business of a food group that operates a chain of Highlands Coffee, Hard Rock Cafe and Pho24 restaurants across the region.

JFC has advanced $5 million to the SuperFoods group, which very recently acquired Pho24, which has 48 stores across the region, specifically in Vietnam, Indonesia, Philippines, Hong Kong, Cambodia and Japan. Pho24, which serves Vietnamese dish with rice noodles as its core product, and provides the platform for continued growth in Asia.

Highlands Coffee serves Vietnamese coffee and ready-2-eat light meals in 54 trendy coffee shops in Vietnam. It also sells packaged coffee through retail outlets. The combined synergy will propel JFC to become a long term growth player in Asian retail foodservice for years to come and the grocerant niche.

Invite Foodservice Solutions® to complete a grocerant program assessment, brand, product placement or positioning assistance.  Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche visit Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant.

Is your Restaurant like a Kodak Camera or a Disney movie?

I have you noticed that Kodak is nearly out of business. Growing up in the 1960’s and ‘70’s, every family had a Kodak Camera and I still have one of mine. Those yellow boxes were everywhere and getting your very own Kodachrome camera was seemingly a rite of passage, heck, Paul Simon even wrote a song about it.

As digital cameras gained popularity, Kodak stuck to what they believed. They sneered at digital’s quality, righteous in their knowledge that Americans would NEVER give up shiny pictures for their photo albums.  

Today, cell phone cameras take most of the pictures and they are rarely printed. Kodak will shut the doors, correct in their assertion that professionally developed pictures look better than low-resolution versions uploaded to Facebook.

Being dead and correct is not a great strategy.  Today chain restaurants are either growing or dying much the same as Kodak. Simply look at restaurants that filed bankruptcy of late: Claim Jumper, Mr. Pita, Friendly’s, Chevys, Sbarro, Perkins.  They are not all dead but they have been far from right. 

These are statements frequently heard from legacy restaurant operators. Like Kodak, crystal clear that what has always worked will continue to work.

• Our executives have 30 years of experience and know how to run the business.
• We never use coupons, nor do we deliver.
• We don’t allow our brand to wander, we protect our brand.
• We don’t use online ordering, I-pad ordering or voice screen ordering.
• We don’t advertise on Google, Twitter or Facebook.
• We don’t open for breakfast.
• We like the umbrella approach each store different personality but under one umbrella.
• Video menus and video signage is visceral gimmickry.
• We don’t measure ingredients, we create daily specials and simply show employees how to make it
• We can’t raise our menu prices.

How did a dominant brand and sector leader like Kodak, in a rock-solid consumer staple lose everything? Simple, they determined the market, the direction of that market and took the steps to conquer it.  If that sounds like your restaurant, retail food sector or niche leader, you better keep reading. 

There is little about today’s market, the consumer or food marketing / promotions that was predictable 3 years ago. In the next three years the rate of change will continue to increase. So let’s look at the above list: 

Reliability and a comfortable working relationship is correctly a key to success.  However, if you find your team is blaming the economy, minimum wages increases, cost of health care and rising food cost for disappointing results. Do not forget that many restaurants companies are growing both the top and bottom line, number of units and garnering market share.  It might be time for Outside Eyes. 

We always/never use coupons – coupons and promotions are very complicated today. Add the online aggregators the ilk of Livingsocial and Groupon and how can you know what works. Here is the point, what you measure you manage. All advertising must have a objective that is clear and measurable to insure a proper marketing ROI.

We don’t deliver – face it, convenience is a driving reason why foodservice is popular. If you do not want to deliver, consider outsourcing.  Delivery is not about you. That’s right it is about the consumer. 

We protect the value of our brand and its integrity for the consumer, our shareholders and stakeholders.  We know the consumer is dynamic not static, but our customer’s comeback because we have a brand promise and they trust in us to keep that promise. Sounds a lot like Kodak, don’t you think?

We don’t use online ordering our food does not “carry” well.  Think about this if you don’t have a way to connect your menu to computers and mobile devices, your competition will woo your customers. Consumers are time starved, and hooked on technology, make it easy.

Google or Facebook – as above, set up a Facebook page, it costs nothing. Have someone help if you need it and then monitor your page 5 minutes a day.  Don’t think about it get started today.

We don’t open for breakfast – you pay rent 24/7, find ways to increase the utilization of your “factory”. Considering catering or school lunch program, contract out your kitchen.  Don’t become the next Kodak of chain restaurants.

Different store brands / personalities under one large corporation and all expected to operate utilizing a uniform set of metrics.  Worked well in the 70’s, 80’s but you have the answer.  Let me know just how well that works out. 

Visceral gimmickry does not replace high quality food and great service ever.  Who defines quality service? You via your brand promise or the consumer?

We don’t measure ingredients; my employees know how much to use – why have menu prices, let customer pay whatever they want. If you don’t care what your product costs, you CAN’T make money.
We can’t raise our menu prices – tell that to the gas station owner on the corner, or the farmer growing your food. Costs are up, you must raise your menu prices or you will not exist.

Kodak management, smart and hard working as they were, did not see the world changing, fortunately you do. Realize that change is good and necessary. Act now to challenge your assumption, create new revenue streams and increase profits.  Success does leave clues, Disney movies leave you with a smile, being dead and correct is not a great strategy.

Foodservice Solutions® specializes in outsourced business development. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging 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.

Ed Zimmerman contributed to this blog and can be found: http://www.thefoodconnector.com/