Today Restaurant Differentiation doesn’t Mean Different it means Familiar.

When was the last time you went to a restaurant and were surprised by a menu item or décor change? Corporate marketers with legacy restaurant chains strive to keep up with their competitors. Back in the day when a chain restaurant would lose market share someone would lose their job! Not in today’s world, they simply copy what the industry niche sector leader is doing, quieting disgruntled franchises or shareholders.

Innovation be Dammed, copy to survive. When this occurs success is based on unique points of distribution, price, not product. Then everyone loses; stakeholders, shareholders, franchisees, and most importantly consumers.

Today management complacency and mediocrity seem to be the status quo rather than consumers focused driven brand teams.   The new mantra for restaurant chain C-level executives appears to be, don’t risk innovation, follow the leader, and maintain niche equilibrium, and the stock options and paychecks keep rolling in.  The loser may not just be the consumer from lack of true innovation, brand values drop, consumer brand apathy increases, and market share capitulation is a direct result.

In reality differentiation becomes product, price, and points of distribution rather innovative new products, or service.   When price and location become a more important value than the brand, the undercurrents of brand disequilibrium are already underway.

Consider looking from the consumers perspective, there is very little overall difference between TGI Fridays, Houlihan's, Bennigan’s or between McDonalds, Wendy’s, Burger King.  Within the Pizza sector, a similar set of problems from the consumer perspective exist between Pizza Hut, Dominos; Papa John’s Godfathers they all having the same number one selling pizza pepperoni. Familiar does work.

           

Rarely do menu, pricing and Limited Time Offering’s (LTO’s) combine to create little change or long time loyalty within the niche or with consumers; it quite simply becomes more of the same.  Legacy brands capitulate market share as an unintended consequence of over controlling the brand within the four walls and executive compliancy.

More and more consistent niche equilibrium can be the seductress of compliancy and mediocrity for CEO’s & COO’s of major restaurant chains.  When C-level officers and brand marketers are more focused on the controlling the brand; staying within their niche and within their four walls rather than paying attention to the consumer, a loss of market share is sure to follow.  Consumers are dynamic, brand must be as well.

Steven Johnson is the Grocerant Guru at Tacoma, WA based Foodservice Solutions®, with extensive experience as a public speaker, multi-unit operator, consultant and brand/product positioning expert. Outside Eyes can provide inside results.  Interested in a product, or brand scorecard? Contact: 253-759-7869 or Steve@FoodserviceSolutions.us

Coast to Coast Craft Coffee Drives Success

Ready-2-Eat and Heat-N-Eat fresh prepared food aka Grocerant Niche retail is booming in every sector of retail today. Companies the ilk of Nordstrom’s, Macy’s, Lord and Taylor are joined by the likes of Walgreens, Pinkies Liquor stores, Wawa, Sheetz and even some Home Depot’s selling Ready-2-Eat and Heat-N-Eat fresh prepared food with customized mix and match options.

One of the fastest growing sectors of retail today just may be the coffee sector.  The ability of a craft coffee house to sell both fresh Ready-2-Drink and Heat-N-Drink product simultaneously places the craft roaster unique sustainable position to compete equally with the likes of Seattle’s, Starbuck’s, San Francisco’s Pete’s Coffee, Minneapolis Caribou Coffee and Orlando’s Barnie’s Coffee Kitchen.  Most important it places them in the center of the Grocerant Niche battling for share of stomach and winning. 

Craft coffee houses here in the Northwest are thriving while seemingly on every other block.  Which makes them seemingly just a block away from the nearest Starbucks, yet they are thriving.  The personal touch customer can receive from small-batch roaster ranges from the consistent smile and hello at the door, the full aroma emitting from the roaster as the beans reach that perfect temperature, to personalized customized roasting for home or office (a private label blend). 

The ability of start-ups like Jose Estorino's Orlando, FL Javatino, selling coffee beans and ground coffee simultaneously provides incremental point of purchase profit.  Here is the crux of how the grocerant niche provides retailers an advantage; they either sell the cup of coffee and a bag of beans, or a bag of beans and a cup of coffee, the craft coffee house wins either way with an incremental sale.  Driving top line sales and bottom line profits.  

Starbucks started out selling a cup of coffee.  Then Starbucks sold a coffee cup, a cup for coffee, coffee machines, and bags of coffee To-Go.  While most legacy coffee shops / chain restaurants of the day capitulated market share, some went out of business, others are now considered restaurants. 

Starbucks on the other hand became an Omni-channel retailer. They grew, and grew, all while driving top line sales and bottom line profits.  Today, Starbucks continues driving growth adding products not subtracting them and this time its fresh food including fresh food delivery. 

Craft coffee is not limited to just local, sustainable business. San Francisco-based Blue Bottle, continues to drive growth and is now expanding its online sales with a new $25.75 million round of funding.  In every retail sector, mix and match meal component bundling can drive continued top line sales growth and bottom line profits.  Is your company ready for a Grocerant Score Card? Fresh food fuels sales success. 

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

C-Stores, Grocery Stores, and Restaurants Menu Mayhem

 

Innovation in menus and meal offering elevate the debate.  Who will win grocery stores or convenience in the menu battle to obtain restaurant consumers?

Proactive and acting entrepreneurial both grocery stores operators and convenience stores operators are entering the Ready-2-Eat and Heat-N-Eat prepared food niche. All the while restaurants are going full speed ahead from coast to coast, each sector is increasing the number of new high quality offerings to entice restaurants consumer to make the switch.

Here are just a few new menu offerings:

1.  Publix Bacon Peppercorn Flavored Rotisserie Chicken
2. Trader Joe’s Wine Country Chicken Salad: with white-meat chicken, pecans, celery, poppy seeds and dried cranberries
3.  Rutters Breakfast subs with double egg, double cheese and double meat
4. Central Market with Chimichurri Rostisserie Chicken
5. Whole food roman style pizza
6. Sheetz Grilled Chicken Cesar Wrap and Garlic Fryz

NPD Group restaurant industry analyst Bonnie Riggs stated "This is something that had been happening prior to the recession, and it has only gotten exacerbated by the recession,…Riggs expects supermarkets to continue to see decent takeout business as the recession fades, largely because NPD projects takeout meals eaten in-home will grow by 20 percent during the next decade.

Grocerant Ready-2-Eat and Heat-N-Eat food is growing in number of locations, quality of offerings and in many cases a pricing advantage over traditional restaurants.  Consumer retail foodservice patterns are repositioning and new sector leaders are beginning to surface.

 Outside eyes can deliver top line insights and bottom line profits.  Invite Foodservice Solutions to provide brand, product, or pricing positioning assistance. Since 1991 Foodservice Solutions of Tacoma, WA has been the global leader in the Grocerant niche for more visit: www.FoodserviceSolutions.us or call 253-759-7869.

Plane Good Food While Flying

Take-Out and Take-Away food has been flourishing lately. Now food from the plane ride can be fast food, and fine food. Hard charging business travelers are accustom to full-flavored meals delivered to them while they work aboard a flight coming and going to and from sales call or clients offices.

One online German grocery store called Allyouneed.com is launching an Airline Meal Delivery service — called Air Food One— to deliver either a "classic" or "vegetarian" Airline prepared meals to your home once a week. Where do you sell food?  Who are you partnering with to find new points of distribution?

Allyouneed.com is teaming up with LSG Sky Chefs, the food provider for Lufthansa airlines in Europe cater to many U.S. Airlines. They are not planning to sell the meals served in the back of the plane (steerage). They are focusing on first class meal service and business class meals.

Here is how it works; each week,” the delivered meal will match the business class menu currently available on planes. Meals are delivered on Wednesdays, and can be frozen until the want-to-be traveler is ready to throw them in the oven.” This option is consider it an alternative to restaurant takeout. This service is only available currently in Germany, but it won’t be long before hits the U.S.

LSG Sky Chefs is not stopping there with direct home meal delivery either.  They now provide a wide array of professional catering services to meet client’s increasingly diversified needs. “These range from the management consultancy of staff restaurants and clubs to providing tailor-made school meals on an individual basis; from organizing open-air parties to sumptuous VIP banquets.”

Sky Chefs is a traditional fresh food retailer commonly known as a B2B retailer. These progressive Non-traditional avenues of distribution open up the competitive landscape that is retail foodservice today. Do you know who your next competitor will be? Are you thinking outside your branded box?

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization? Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Fresh Food Sales Success Convenient Convenience Drives Consumer Convergence

The convenience store sector continues to outperform other retail sectors, in large part driven by ever-increasing sales of fresh prepared food. In fact, fresh prepared food sales are the root cause of the undercurrents of disruption changing the price, value and service equilibrium within the retail food sector today.

Companies the ilk of Wawa Inc., Sheetz Inc., Rutter’s Farm Stores, Casey’s General Stores Inc. and 7-Eleven Inc. are all expanding year-over-year sales while building new units. Differentiation with quality ready-to-eat and heat-and-eat fresh prepared food is one way to created marketing buzz and customer trial. However, that model is changing and changing fast, driven by evolving demographics, technology and virtual convenient concepts.

Five years ago, many leading convenience store operators were worried about other c-stores stealing their ideas. Then, they began to think they should only worry about the day when they stop stealing ideas. Well, that day may have arrived. The current convenience store business model is under attack.

Even after seven successful years of seeing convenience stores’ retail fresh food sales leading the food industry in growth, c-store operators cannot rest on their laurels. I’ve seen how “footprint malaise” can be a leading contributor to consumer discontent and migration to other channels. Although fresh food continues to be the driver of customer frequency, retailers have seen gasoline volume tapering off with improved gas efficiencies taking a toll.

Youth-Targeted C-stores

A recent study found that Americans aged 16 to 24 who have driver’s licenses fell to 67 percent in 2011, the lowest level in roughly a half-century. This same segment of consumers would rather have a smartphone than a driver’s license.

The consumer is dynamic, not static; business models must be as well. Are you building or remodeling stores for yesterday’s customers or tomorrow’s?

While smartphones and technology are driving disruption in seemingly every sector of the economy, new technology and startups led by 20-something CEOs are now taking aim at the convenience store sector and all fresh-food retailers. Burger King’s purchase/merger with Tim Horton’s is just one example of a legacy food retailer trying to mitigate customer migration with daypart expansion, but that may not be enough.

Who’s Competing In Convenient Convenience?

In an omnichannel/cross-channel retail world, simply doing what you have always done and doing it the same way does not work.

Back in 2011, when Scott Stanford and Shervin Pishevar led separate investments in Uber’s $37-million Series B round, fellow investors and friends scoffed. “Why are you guys investing in a limo company?” the naysayers asked. Today, Uber is operating in 128 cities and valued at $18 billion.

Today, Uber also is offering a free delivery service called Uber Corner Store as a means to garner more customers. Yes, the company is serving young customers that don’t drive, aging customers who are too old to drive and lower-income customers who can’t afford a car full-time to drive. Since Uber’s store is a virtual location, the return on investment is much less than a brick-and-mortar store.

Stanford and Pishevar did not stop there, though. They formed a venture capital firm called Sherpa Ventures. One of their first big bets was a $28-million Series B investment in a San Francisco-based food delivery startup called Munchery, which makes meals and delivers them within one hour.

Munchery and Uber are putting the “convenient” in convenience. Now, you may be thinking that technology-based food companies will not affect your business. Tell that to Waldon Books, Barnes & Noble, Crown Books and maybe your favorite local bookstore.

Are you building a convenient brand beyond your four walls?

Technology: Once A Friend, Now a Foe

Sherpa Ventures co-founder Stanford said, “When you introduce something like Uber or Munchery, you change the paradigm with not only how that service or product is consumed, but how it is provided … If you can change the underlying economics of that delivery platform or that value chain, it puts you in a really interesting position from a financial perspective.”

When Red Lobster opens a new restaurant these days, it does it very much the same way it did 46 years ago. Sure, it will have an updated menu, décor and messaging, but the business model has not been changed. Red Lobster and maybe your company’s business model might just look more like yesterday’s business model than tomorrow’s business model.

There is a growing trend of companies that, thanks to smartphone technology, are providing efficient and innovative on-demand services. They can make your business look outdated. Consumer expectation has changed as a result of greater connectivity. From brick-and-mortar locations, consumers are fast looking to “point, click and eat” solutions for immediate consumption — no gas required.

The Migration of Legacy Grocery Stores

Legacy grocery stores are migrating into the "convenient convenience" space as well.

Sharon Price, grab-and-go food guru for the Fresh & Easy Neighborhood Market chain (formerly owned by Tesco plc), recently said: “We set out to develop more breakfast options that are delicious but not overloaded with calories, perfect for the customer looking for healthier options on the go.”

These grab-and-go breakfast items are priced to compete with c-stores and quick-service restaurants. They will complement the lunch and dinner fresh-prepared, ready-to-eat and heat-and-eat offerings.

Whole Foods, meanwhile, not only offers fresh prepared food for breakfast, lunch and dinner, but it also has entered the catering and holiday meal business, as well creating a whole concept around family food and fun that continues to drive sales and bottom-line profits.

From Handheld Food to Hand Held Food Ordering

Every retail food sector has noticed a discontinuity in consumer food shopping behavior, and all are fighting for share of stomach. Contributing to this displacement is technology and demographics. Where once the family dinner was the bastion of American household, today 32 percent of dinner occasions are eaten alone.

Are you trapped doing what you have always done and doing it the same way? How long before virtual location startups garner 5 percent, 10 percent or even 20 percent of your market share?

Outside eyes can deliver top sales and bottom line profits.  Invite www.FoodserviceSolutions.us  to provide brand and product positioning assistance or a grocerant program assessment. Have you completed a Grocerant Scorecard? Contact: 253-759-7869 or Steve@FoodserviceSolutions.us

McDonald’s is the Most Aspirational Retail Food Brand in the U.S.

Naysayers filled the airways, newspapers, social media, and trade magazines yesterday when McDonald’s reported negative sales numbers once again calling for ‘change’ or simply calling out McDonald’s for their personal priority.  The naysayers were for the most part uninformed Micro analyst wannabes wonderful space filler for the press, and nothing more than a distraction for industry.

McDonalds is changing, evolving, and garnering contemporized relevance.  McDonalds has led the industry breaking long traditions of chain restaurant brand protectionism as regular readers of this blog know. Monthly sales numbers aside, McDonald’s AUV’s are the gold standard of the QSR industry.  The simple fact that there is not another QSR that would not like to trade AUV’s numbers with them should be enough. 

How can anyone be surprised when all leading economic indicators for three months have pointed to a slowing Europe, slow Japan, and deflationary fears here in the U.S.?  Industry sector leaders often reflect both the economy and the trend of the economy first.  McDonald’s is the global industry standard. 

Last month when Foodservice Solutions® released it’s Top 20 Grocerants for 2014 McDonald’s was the highest ranking chain restaurant on the list. McDonald’s is evolving with the consumer as fast or faster than most other legacy chain restaurants. Technology has evolved, and consumers are more time starved, than ever before leveraging new technology for food information, and finding new points of fresh food distribution at the same time. 

While consumers have more part-time jobs there are still 45+ million U.S. households receiving Supplemental Nutrition Assistance from the USDA (Food Stamps).  Foodservice Solutions® Grocerant Guru™ believes it’s the primary reason McDonald’s was found to be the restaurant chain grocery shoppers would like to visit more often.  Simply put for millions of Americans McDonald’s is Aspirational.

The Micro analyst wannabes just might take a minute to reflect on what a treat it would be for a single parent and child to go out for a meal.  McDonald’s is a powerhouse of a brand and while overlooked by the elite, it is a treat for the street. Did your kids get to go to McDonalds?

McDonalds is a dynamic company not static.  They have tried, bone in wings, mix and match game day meal boxes, and customized touch ordering all within the last 12 months.  No company is perfect, but no one can fault McDonalds for being static, for brand protectionism, or for having the highest AUV’s in the industry.  Success does leave clues and everyone else is following McDonald’s. 

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.

Mom’s Want Help at Dinner Time.

Foodservice Solutions® Grocerant Guru™ found that “at noon 83% of households do not know what’s for dinner and at  4 PM 69% still don’t know what’s for dinner.  One thing is clear; families are looking for dinner solutions every day. 

Recently a conference titled, Marketing to Mom’s was held in Chicago and while we were not surprise with the findings we think you will be.  The number one finding from the conference; “Mom’s biggest Frustration is Dinner!”

While not a surprise to our regular readers the conference insights found that “Moms are faking it while Quietly Freaking Out”.  In fact 82% of Moms believe that brands can help them out.  We agree.  All food retailers need to be focusing on Ready-2-Eat and Heat-N-Eat meal solutions.

The second most reveling insight was that Moms are far more “digital than ever before spending 25 hours a week online.”  In fact a “full 81% of moms report they are more likely to order online if there is some sort of loyalty / reward point system.” Where is your brand being viewed and by whom?

Bundling meal components that can be customized into a personalized family meal is the key factor driving the successful growth of the grocerant niche. The battle for share of stomach at dinnertime is well underway everyday by noon.

The Mom’s conference reveled that there are “9.8 million moms in Canada alone, and that they buy everything for everyone everywhere”.  Where are you offering your food, selling food, traditional channels of fresh food distribution are slowing fading away as new non-traditional avenues are moving from trial, too trials, too highways.  

Are you trapped doing what you have always done and doing it the same way?  Interested in learning how Foodservice Solutions 5P’s of Food Marketing can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit:  www.FoodserviceSolutions.us for more information.