Ready-2-Eat Heat-N-Eat Success 3 Simple Clues

The success talked about documented and copied the most within the food industry is the success within the Ready-2-Eat and Heat-N-Eat fresh prepared food space aka the grocerant niche.  Regular readers of this blog know who has been wining and who is driving the success.  Today we have are going to focus on who will be driving the success for the next 7 years or so.

The new research report by Packaged Facts helps us get a proactive view of who will continue to drive sales.  Packaged facts found three groups that will play key leading roles.  

1.       Based on Packaged Facts’ analysis of U.S. Census data, the percentage of the U.S. population aged 65 and older will increase from 41 million in 2010 to 56 million by 2020. With this shift, those aged 65 and up will increase their share of the total population from 13 percent in 2010 to 17 percent in 2020 -- accounting for 42 percent of the total population growth over this decade. es

This group of consumers dovetailed with our research simply is tired of cooking.  They enjoy Ready-2-Eat and Heat-N-Eat fresh food options and are willing to experiment with familiar food from non-traditional locations. Here are some examples Betty Crocker Home Style Meals Delivered, Walgreens Ready-2-Eat and Heat-N-Eat fresh prepared food, and Boston Market To-Go. Brands have equity and familiarity and this group has the willingness and ability to spend.

2.       Packaged Facts found Latinos will continue to gain importance and influence in America’s retail landscape, according to Packaged Facts’ latest research. The Hispanic population in the United States will reach 64 million by 2020, and will be a third as large as the non-Hispanic white population (at 199 million) and larger than the African-American population (at 42 million).

Societal assimilation is the key here Latino’s are increasingly educated populace of Latino with a growing number within the Millennial sector.  While this groups is simply growing exponentially.  They have been exposed to previously establish traditional meal components, while introducing flavors of their own.  Many in this group took the time to learn how to cook traditional meals, lack the skill-set to prepare authentic meals or simply lack the desire to learn how to cook which parallels most other sectors today. 

3.       Last but not least by any means women continue leading food focus game-changing consumer buying trends. Package Facts found delayed marriage, combined with a greater propensity to pursue "three letter" degrees, will allow women in the workplace to secure more positions of authority and affluence, ushering the nation into an era of income equality among the genders.

Every food retailer Looking a Customer Ahead needs to understand that while these three groups will play a key role in defining flavor profiles, portion size, and a new price, service, value equilibrium. Retailers must evolve as fact or faster than the consumer in-order to maintain or gain market share.

Foodservice Solutions® specializes in outsourced business development leverage out Outside Eyes for inside Profits. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy Visit www.FoodserviceSolutions.us ,Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Kroger, Publix, and Safeway at Risk of Capitulating 7.5% of sales.

The Dollar store sector continues its twelve year run of opening new units at a seemingly unstoppable rate. Legacy grocery stores appear undaunted, unwilling, and unable to do anything but capitulating market share to the Dollar store sector, let alone accept or understand what is driving consumers away from their units into Dollar stores.  With more and more Dollar stores selling fresh prepared Ready-2-Eat and Heat-N-Eat food, can Kroger, Publix, and Safeway survive?

Foodservice Solutions® Grocerant Guru™ believes that in the short term (next five years) the Dollar store sector will garner an additional 2.5 % of sales from legacy grocery operators. In addition our Grocerant Guru™ believes that Amazon will within five years reach their goal of 2.5% sales from the grocery sector adding additional unwanted, unrecognized pressure on margins for the grocery sector. It must be noted that each of these companies has already said Amazon is no threat.  Alone maybe not but combined with macro evolving Omni-channel retail environment they might need to take another look.

The first two competitive threats would only add up to a 5% loss. Foodservice Solutions® Grocerant Guru™ believes that an additional 1.25% will come from new non-traditional food retailers.  The rapid success of Ready-2-Eat and Heat-N-Eat fresh prepared food will continue to propel success from new non-traditional fresh food retailers including Liquor stores (Pinkies), Department stores (Macy’s, Nordstrom’s, Saks, etc.), the restaurant sector from the ilk of Eataly, Eatzi’s Maggiano’s Little Italy, Boston Market.

What our Grocerant Guru™ anticipates could become the largest and fastest growing sectors of competition for legacy grocery retailers providing at minimum the other 1.25% sales capitulation over the next five years will come from the convenience store sector along with the retail drug store sector.

Walgreens Up-Market stores selling both fresh prepared Ready-2-Eat and Heat-N-Eat food is expanding from unban center to urban center they soon will begin leveraging existing unit metrics to extend into the suburbs. The C-store industry has grown its fresh food offerings.  C-store same store sales fresh food sales have been up 7+% for the past four years with no signs of slowing down all the while opening more and more units are opening. Branded chain drug stores are in very neighborhood in the U.S. and will become the greatest threat to legacy grocery stores over time according to our Grocerant Guru™.

In the United States the improving economy will add additional pressure on the grocery retail sector according to Foodservice Solutions® Steven Johnson who stated recently “the SNAP program has been cut this year by 5%, there is an expected additional cut to the SNAP program to come next year, combined with reduced numbers of consumer eligible for the program due to the improved economy, legacy grocery retailers will capitulate market share to restaurants and non-traditional food retailers for several years.”

Andrej Busch, chief executive of DHL Paket Germany stated recently that “Online sales now made up 5 percent of the British grocery market, compared with less than 1 percent in Europe's biggest economy, ... "Why can't we get from 1 percent to 5 percent?".  He went on to say he thinks that Germany can hit 5% by 2016. If success does leave clues new non-traditional avenues of fresh food distribution are a clue that grocery industry disruption is on the way.  Don’t think that 5% can’t happen in the U.S. either. How much and how fast has Safeway shed stores? How long with that continue, will your company be next? Need help repositioning? The battle for share of stomach continues to intensify.

www.FoodserviceSolutions.us Steven Johnson is 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

Snacking What and When College Students Like

Today with Ready-2-Eat and Heat-N-Eat fresh prepared food in nearly every channel of retail it is interesting to learn what the future may look like.  In a recent study by Boston based marketing agency Fluent looked at what college students crave, they identified many changes from previous studies.

Fluent found that comfort foods of the past the likes of pizza and beer are being replaced by a much more sophisticated set of food choices.  The study reported that “75 percent of college students use snack foods to replace meals at least once per week, while afternoon snacking trumps late-night and evening snacking by a ratio of three to 1.”

These snacking periods as defined in the Fluent study revealed that “healthy options were the first choice among snacking items selected by the respondents.” The snacking survey contradicted what most people would think to be true about college kids and snacking.

When do they snack?  Fluent found the peak of college “snacking actually occurs during the day as opposed to late night, and students are making relatively healthy choices. What’s more, price matters a lot and students use debit cards even for these very small purchases," said Michael Carey, executive vice president of Fluent.  Here are additional key findings within of the survey:

1.       While convenience and price are clearly important in driving snack choices, the single most important factors are satisfying a craving (25 percent of responses) followed by nutritional information (20 percent).  

2.       The top go-to snack food of choice is a granola/energy bar (25 percent), followed by chips (22 percent), fruit (14 percent) and baked goods (12 percent).  

3.       In terms of beverages, water is tops (62 percent), while coffee and tea are the primary caffeinated beverages (13 percent), chosen far more often than soft drinks (7 percent). Juice (5 percent) and milk (4 percent) did better overall than sports drinks (3 percent) and energy drinks (2 percent).  

4.       Most students (44 percent) rely on debit cards to pay for snacks, followed by their ID card and cash (21 percent each).
 

5.       More than 80 percent report spending less than $5 per day, and 48 percent spend less than $3 a day.
 

6.       While students choose familiar tastes and brands most often (43 percent) to meet cravings, the other top influences on their purchases are free samples (35 percent) and coupons (10 percent). Peer recommendations came in fourth.

Foodservice Solutions® specializes in outsourced business development leverage out Outside Eyes for inside Profits. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy Visit www.FoodserviceSolutions.us ,Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Restaurants Free Mobile Online Ordering. Why Pay On-Line Ordering Fees?

In the recent North American Restaurant Consumer Sentiment study by AlixPartners  found “Consumers to dine out less often in 2014”.  The same study found that Loyalty programs, mobile marketing boost traffic.  So why wait, for less than a $100.00 you can get your own mobile app with a loyalty program and on-line ordering.  

Ready-2-Eat and Heat-N-Eat fresh prepared food sold via Mobile App not only expands customer relevance; it is an invitation for your customers to save time and come back to your restaurant more often.

Do you have a one-on-one relationship with your customers?  Foodservice Solutions® Grocerant Guru™ says “an invitation is a hand shake not an advertisement”.  

Mobile Marketing allows you to be in the palm of your customer’s hand welcoming them back daily! Take advantage of the fast growing smartphone market and bring your business to your customers’ pocket.  New companies have new cost metrics to save you money here is one you should consider checking out http://www.budgetbusinessapps.com.  They will build your customized app and charge you less.  Here are the highlights: 

1) Only $99 to build the App 

2) Food Ordering included at no cost: With a single click, anyone can check the available options in a restaurant and can place the order through his/her smartphone. An App menu can be presented in a better way than the traditional printed menu.  The App can include special positioning for Chef’s special or favorite dishes which have higher chances of getting ordered. Your customers can order as much as they want…there is no additional cost or percentage of sales required. That for many can be a big savings.

3) Easy Reservations: Mobile Apps can include an option of making reservations. Budgetbusinessapps.com mobile App’s can show the available tables. Customers can easily check it and make reservation. They don’t need to be listed in the waiting list and wait for their turn. Budgetbusinessapps.com  makes it easier for restaurant owners, as well as for visitors to order. In addition Budgetbusinessapps.com mobile App integrates with most reservation systems including OpenTable. 

4) Mobile Coupons with Push Notifications – 97% Are Opened and Read: Get the Younger Generation into your restaurant frequently

With your own branded restaurant mobile App you interact and keep your customers informed with mobile coupons or SPECIALS. Turn a slow day into a sold out day by getting immediate visits from your customers.

5) Notification for Special Events: Restaurant owners can send notification to people right into their smartphones via their apps, for special days or events. Customers can be made aware of the special offers, events like food festivals etc. An invitation is a hand shake and welcome back.  

6)Mobile Loyalty Programs: Put away the old cards & stamps…..have a fully digital mobile loyalty program, which will get a higher redemption rate & provide you with real time statistics on your clients. Leverage Budgetbusinessapps.com App’s analytics that are all included within the small monthly charge.  

Success does leave clues restaurant customer migration can be reduced with consumer relevance. Budgetbusinessapps.com new metrics can save you money and your customer’s time.

 

Foodservice Solutions® specializes in outsourced business development leverage out Outside Eyes for inside Profits. We can help you identify, quantify and qualify additional food retail segment opportunities or a brand leveraging integration strategy Visit www.FoodserviceSolutions.us Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

Restaurant Consumer Discontinuity Shifting Food Retail Opportunities.

Remember the old adage one step back then two forward. In order to understand what is occurring in the food space today sometimes its best if we take a look back.   The shift in food retail consumer spending patterns or retail food consumer discontinuity started well before the economic down turn. 

I hear regularly from clients that “our consumer is not doing what they have always done”. I have but one simple reply, your consumer is not the same as her/she was a year ago, five years ago nor will they be next year and neither should your brand be. 

The confluence of increasing consumer knowledge about food via TV, the “food network”, and rapid restaurant industry growth, coupled with concept sameness, combined with the weak economy allowed trepidation too crept into restaurant executive planning meetings and board rooms across the industry in 2008 and seemly stay there. 

In far too many restaurant companies the cry was for just wait it’s the economy not us all will be fine. That prevalence of mediocrity and complacency at the C-level was extremely naive.  As an industry restaurateurs concern is and should be share of stomach; first by company, second by niche-market share, and third the restaurant industry overall at all times. 

The economy is not the largest problem it is competition for share of stomach; specifically by the ready-2-eat prepared meal section of the grocery stores, Convenience stores, and Chain Drug stores. Under reported but significantly noted first in 2005 by Foodservice Solutions®. That was the first year that recorded a consumer increase in percent household spending for food in grocery stores and away from restaurants in 25 years. 

The shift had been slow in coming but it has continued since 2005. That was the first such directional move in 25 years. That 25 year span can best be recalled as the golden age of chain restaurants, and marks a huge shift. The timing of this is important.   Those were the boom years for the restaurant industry. During that period we witnessed double digit growth in new units with most tier one players year after year.

It is important to note that in the past 15 years the average grocery store has dropped or discontinued carrying 15,000 Sku’s (individual food ingredients) which is equal to two isles in a standard grocery store. They replaced them with less than 200 ready-2-eat and heat-N-eat fresh prepared food products. They created from those new ready-2-eat and heat-N-eat Sku’s a mix and match components that consumers bundled into customized family meals. Consumers now say most ready-2-eat components are restaurant quality.  Those products are driving an increase in customer frequency and loyalty for Grocery stores, C-stores and Retail Drug store chains. 

On top of that they have integrated the ready-2-eat and multi-daypart meal components food products foods into national advertising and weekly flyers. YES, an ilk equivalent to a restaurant meal bundled and priced very competitive with a focus on fresh better for you. Harris Teeter once described its remodeled stores salad bar and ready-2-eat foods as CASH COWS.  Safeway stock is up sharply over the same period with the proven results from their ongoing remodel prepared food focused lifestyle stores.  It must also be noted here that during that 25 year period while the US population was booming, grocery stores declined in number by 25,000 units while the restaurant industry grew by 200,000 plus outlets. 

The grocery prepared food Industry leadership is being driven by European retailers. Three of specific note are Marks & Spencer, Morrison’s (M-Local) and Trader Joe’s with “tonight’s dinner” mostly refrigerated or quick chilled food components which blend their store brands with branded ingredients and simultaneously put their prepared meals on par with homemade.  Today, Walgreens and Duane Reade both US retail drug stores are aggressively expanding into fresh ready-2-eat and heat-N-eat prepared food. 

Walgreens initiative can best be called convenient meal participation. For the consumer it is interactive, participatory and inviting, providing “like” homemade touches via component bundling creating personal satisfaction. This as extremely compelling because Walgreens is an 81 Billion dollar company well financed and that makes this very competitive for the restaurant industry. This is not a fad but a trend that is now 27 years in the making.  The trend began in 1985 with the food industry focus on Home Meal Replacement (HMR) and has progressed into a full-fledged battle for the consumer’s food dollar and share of stomach by all retail sectors. 

The race for the consumer is transformational with more competitive points of distribution opening up all of the time. The traditional metrics for measuring success at chain restaurants is currently being challenged by the success of chains like; Buffalo Wild Wings, Chipotle, and Papa Murphy’s. These firms have carved out niche’s based on purpose, choice, convenience and price. Realism is reflected in the customer counts and continued sales numbers for these companies. 

The economy is a focus now, however since 2005 clear indicators are now providing a picture of what is important and changing with consumer eating habits particularly HOW THEY EAT, WHEN THEY EAT, and WHY THEY EAT. 

Most notable is the change in consumer vision and role of food: including social eating, eating economically, environmental eating and eating for personal benefit! Yes personal benefit, only in America do consumers go on diets to eat their way thin!  Ok, ask yourself does that work? If no keep reading. 

Recently three chains particularly have addressed these issues and seem to be having success; Domino’s, Starbucks and Cheesecake Factory. Each company has had a dramatic overhaul of menu and positioning are now recovering building new and additional loyal customers.  

The restaurant industry has not proved as agile as the Grocery, C-store or Drug Store sectors when it comes to attracting new consumer while expanding fresh food offerings since 2005. The confluence of events may in fact force our industry to look at how we run our business. It will not however force us to stick to outdated metrics, methods or models. Yes, “times they are a changing”. The challenge is to recapture share of stomach.

The grocery and drug store sector particularly have spent millions studying restaurant quality food, levels of service, packaging and product positioning. They have a wealth of knowledge and it is in play. The restaurant industries legacy of innovation combined with its ability to get products to market faster, places it first in the mind’s eye of the consumer. Increase success in the Grocerant niche call Foodservice Solutions®

Outside eyes can deliver inside sales. What are you bundling with you core products? Who are your customers and where and how can you sell them more? For more Visit www.FoodserviceSolutions.us  or http://www.linkedin.com/in/grocerant or twitter.com/grocerant  

Starbucks Fast Approaching 50 Years Old with Comps Up 7%

It was 42 years ago that the first Starbucks opened in Seattle at the Pike Place market.  Today, as they race to the 50 year mark Starbucks continues to lead its sector and is an example for the entire restaurant industry that evolving with the consumer works.

During the first 20+ years that current CEO Howard Schultz was leading the company Schultz refused to sell food.  Starbucks always sold non-food items that complemented and extended the Starbucks experience and brand yet Starbucks shied away from food.    In fact with ease you can find article after article, and definitive statements from Schultz that Starbucks would never sell food.

Success does leave clues and Starbucks customers were evolving and Schultz listened then began selling food. Selling food did not go so well at the beginning it may have been because the effort appeared half-hearted.  That’s all changed.

In recent presentation Foodservice Solutions® Grocerant Guru™ asked the audience “if your company was 42 years old, had 20,250+ units operating around the world in the current prolonged economic conundrum would your sales be up or down?” The vast majority of the audience responded a resounding DOWN.

Well, we all know today that Starbucks, with 20,850+ units in the fourth quarter of this year marked its 15th consecutive quarter in which comparable sales rose more than 7 percent in the U.S. and more than 5 percent globally.  Have you evolved with your customers? How long has your restaurant been in open?

The Ready-2-Eat and Heat-N-Eat fresh prepared food aka grocerant niche has no better example of success than Starbucks.  Starbucks ability to adapt and evolve with consumers and willingness to extend its brand and products within our current Omni-channel retail environment is an example for all.

For international corporate presentations, educational forums, or keynotes contact: Steven Johnson at www.FoodserviceSolutions.us    His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all.

Fresh Food Retailing Expanding Beyond Traditional Locations

Food consumers are now Omni-Channel consumers. The success of ready-2-eat and heat-N-eat fresh prepared food has been documented, talked about and written about for one reason of late. It is driving top line sales and bottom line profits within existing points of distribution and more importantly at non-traditional points of fresh food distribution garnering share from legacy food retailers.

Is your food company prepared to succeed in 2013, 2014 … 2020? Here are some of the advantages to entering or expanding your business within the grocerant niche:

Exposure to more customers and all Sides of the Food Business

Most large food retailers, big companies, have a narrow focus. That has worked for 50 years. They have honed their brand and supply chain. They have set and defined boundaries, and it is difficult to get outside of them. Time and technology have redefined the consumer playing field. Your brand must become dynamic again or risk losing consumer relevance. There is a huge opportunity for share of market if you elect to evolve you brand with migrating fresh food consumers in take-out and take-way options.

People Reward Potential

Large food retailers typically pay more at the C-level, and are seen as stable employment currencies (not-taking risk). However the grocerant niche when vertically integrated into an existing brand creates a new level of excitement within the entire company. When sales grow, the opportunity for advancement expands, building team momentum, excitement explodes like a wildfire. Customers can feel the proactive positive buzz from employees. Doing nothing Boring Doing Something Soaring.

Proactive Change is Exposure to Success

Change is incredibly dynamic, consumer focused changed is contagious. Change evolves and will go through a bell curve, and you see the whole thing step by step when you vertically integrate change into brand and consumer values. If not integrated you do not really get to escape the velocity of the event, but change is exciting nonetheless and customers will still follow.

Impacting Consumer Relevance Means Thriving not Simply Staying Alive

Are you going to tangibly impact your company or maintain the status quo? Today like never before companies have the ability to evolving a brand at a speed not seen since your company was a start-up. What impact are you going to have on your company? There is a difference between the work you do and the impact you have. Fresh Food retailing is evolving at break neck speed, evidenced by the Dollar Store formats selling more foods and Walgreens selling fresh foods and doing it well as you can see from this video of a Walgreens in San Francisco. Is your brand evolving fast?

Spin Out, Spin Off or Springboard to more Profitability

If you do nothing but wait, watch or blame the economy you are very likely to simply spin out of control. Redefining your brand with consumer relevance will position you too either create a positive spin off or springboard to the next level. Legacy organizations need to be mindful that springboards do great things for your organization, your team and your shareholders.

Success Does Leave Clues and Foodservice Solutions® is clue # 1

LTO's (Limited Time Offers) can drive top line sales and bottom line profits while taking you in a new direction. Are your LTO's leading your brand, testing your brand or simply copy-cat marketing tactics absent strategy?

Fresh prepared ready-2-eat and heat-N-eat food in non-traditional outlets poses an ever increasing threat to restaurant growth. Want to know how to best address these new competitive threats?  Contact Steven Johnson Grocerant Guru at: www.FoodserviceSolutions.us