Wonder Why Restaurant Customer Migration is Growing?

Overall restaurant customer migration is driven by the 65 Inch HDTV Syndrome according to Foodservice Solutions® Grocerant Guru Steven Johnson found that the line between restaurants and food retailers is growing ever thinner. The fight for America's food dollars continues to intensify as consumers find fresh prepared Ready-2-Eat and Heat-N-Eat fresh food options at a wide and growing array of outlets across almost every channel; including convenience stores, chain drug stores, restaurants, Liquor stores, grocery stores, club stores, vending and even more non-food retailers the ilk of Ikea.

While manufacturers, retailers and restaurants worry about choice overload, consumers have embraced their new choices and show no signs of returning to the old ways. This fight is taking place in what is called the grocerant niche.

Foodservice Solutions® Grocerant Guru® noted in 1991 that the restaurant industry is not an industry known for trying to be first as in fastest to market with an ideation, food or technology advance. In the United States the larger the chain in almost all cases the more slowly they are to adopt something than a smaller chain or independent restaurants will. Chain restaurants goal is simple feed one meal at a time in the restaurant while protecting and edifying the brand.

Historically chain restaurant leaders have denied the credibility of start-up competitors as non-relevant. The pizza sector is a great example; evolving from family dinning independents to national chain of "Red Roof" Italian, then to delivery only outlets and now take-N-bake is garnering market share in the pizza sector. (Note: Home Made Pizza Company and Papa Murphy's are further examples of take and bake pizza operators.)

Trends in the Food Industry Point to an Increase in Non-Traditional Meal Occasions

Our own Grocerant Guru® found that at the intersection of the consumer, fresh prepared food and technology we fine that consumer eating behavior is evolving and is now beyond the control of traditional food marketers. Evolving culture and lifestyle, demographics along with the new uncertain economy are all putting pressure on the American food consumer:

Demands of work, economic shrinkage, demands of raising a family, commuting, social interaction, kid's after-school activities, all contribute to a food marketplace where convenience vies with price over legacy brands. Recent advances in food packaging and new points of non-traditional food distribution have empowered consumer choice, and Americans are embracing these choices even as legacy marketers cringe. Who's after restaurant food dollars simply put everyone and that means every retailer.

You better start paying attention. Why should you care if Walgreens is selling fresh prepared Ready-2-Eat and Heat-N-Eat fresh food? Why should you care if Whole Foods, Trader Joe's, Safeway and Wegmans are selling Ready-2-Eat and or Heat-N-Eat fresh pizza? Why should you care if Coinstar is selling Seattle Best Coffee at 1,000 locations for $1.00?

It’s quite simple. You should care because they are selling it, and you are not! The fastest growing sector of retail food service for the past four years has been the Convenience store sector. The C-store sectors growth in large part has been driven by fresh prepared food. Non-traditional avenues of distribution are growing, gobbling market share while establishing new patterns of consumption, price points and customer loyalty.

Consumers are Driving Change Spurring New Retail Food Formats

Trader Joe's and Whole Foods have created Ready-2-Eat and Heat-N-Eat fresh prepared food items with qualitative differentiation as an entity with identity that has help propel them into Grocerant niche Ready-2-Eat fresh prepared food leadership. In fact recent research shows that both Trader Joe's and Whole Foods are each known for high quality (restaurant quality) Ready-2-Eat and Heat-N-Eat foods with distinctive offerings.

Even more important both Whole Foods and Trader Joe’s are leading with innovative products and package size that create value and have positioned each chain as a food shopping destination for meal  FIVEcomponents customized and personalized for immediate consumption or mix and matched for a meal time at home. In short they are stealing your customers.

Walgreens fresh prepared food is restaurant quality according recent consumer studies  and priced less than Panera Bread or Corner Bakery Cafe. Both Panera Bread and Corner Bakery Cafe thrive in urban locations. Walgreens is now growing price, quality and speed of service advantages over legacy retailers. Legacy restaurant chains must reconsider the speed at which they evolve and adapt or non-traditional outlets will capture profits margins as well.

More bad news is on the way  for legacy foodservice operators. Traditional views of meals and mealtime can pretty much be discarded. Legacy retailers waiting for the "next big thing" to copy simply might be out of luck this time. Legacy food retailers may not like to be first movers very much but it may prove that waiting too long will not work this time.

Foodservice Solutions® FIVE P’s are Driving Sales Success

Millennials continue to drive change as the retail food world is evolving at an ever increasing pace filled with innovation in food, portion size, points of distribution, and quality fresh prepared meal solutions. The price, value, service equilibrium is resetting in retail foodservice. In order to edify your brand and reinforce consumer relevance restauranteurs and other legacy foodservice operators should be integrating Foodservice Solutions® FIVE P’s of Food Marketing.

Today, many food retailers continue to practice brand protectionism, stifle the brand while diminishing consumer relevance. The consumer is dynamic not static. Brands must be dynamic, evolving with the consumer. Four more years of watching other retail sectors thrive should be long enough. Success in the restaurant world is no longer simply about what happens within your four walls.

Steven Johnson is the Grocerant Guru® at Tacoma, WA based www.FoodserviceSolutions.us with extensive experience as a multi-unit operator, marketing brand/product positioning expert, and Grocerant Niche development. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche.  For more visit http://www.linkedin.com/in/grocerant or twitter.com/grocerant Steve@FoodserviceSolutions.us

 

The Speed of Foodservice Change is Accelerating Rapidly

Consumers are evolving faster than many legacy chain restaurants, grocery stores, and C-stores according to Foodservice Solutions® Grocerant Guru®.  So do you ever wonder from time to time why legacy branded foodservice companies don’t evolve faster? 

Let’s look at some movement from consumers today:

1.       In US today, 68% of people and 85% of millennials own smartphones.

2.       91% of smartphone users turn to their phones for ideas in the middle of a task.

3.       In 2012, there were 20 million photos posted per month on Snapchat

4.       In 2016 it's 20 million every 28 minutes.

One thing is clear the speed of change is accelerating rapidly. In foodservice the migration away from grocery stores, and restaurants to non-traditional fresh food outlets the ilk of C-stores is another great example.

In fact sixty-four percent of Millennials ate prepared food from a grocer in the three months prior to August 2015, compared to 51% of Boomers the simple point is eating meals from a non-traditional location is now common place.  Has your marketing team repositioned your concept lately?

Recently more than 10,000 people took part in the poll by Market Force Information, which ranks gas stations in two separate categories: traditional convenience stores and gas stations, and grocery stores and big-box retailers with gas stations. Kwik Trip took the top spot away from Wawa in Market Force Information's latest annual study on consumers' favorite convenience stores.

What is very interesting to all of us at Foodservice Solutions® was, Market Force found that 23 percent of customers bought a fresh food item during their last visit and 89 percent were satisfied with the quality. Our Grocerant Guru® wondered aloud how many fresh food retailers can report that 89% of consumers are ‘satisfied with the quality’ of their last visit?

Market Force went on to say that Wawa, Kwik Trip, Casey's, Sheetz and QuikTrip led in fresh food purchases and had relatively high marks for food quality satisfaction.  Success does leave clues and it is clear that the C-store industry is picking up all the right clues.  Are you evolving fast enough?

For international corporate presentations, educational forums, or keynotes contact: Steve@FoodserviceSolutions.us the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  His extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking will leave success clues for all. Visit: www.FoodserviceSolutions.us for more information.

From Private Label to Branded Success Laredo Taco is Growing Fast

Private Label brand managers have been more aggressive, more focused, and more authentic and many legacy restaurant chain brand managers for quite some time according to Foodservice Solutions® Grocerant Guru®.

The team at Foodservice Solutions® was not in any way surprised that Sunoco LP continued the expansion of proprietary food offering, Laredo Taco Co., in the first quarter of 2016 — and the convenience store operator is just getting started with 20 new locations planed for outside of Texas this year. 

Currently Laredo Taco Co. has approximately 450 locations, with the majority in Texas. However, Sunoco opened its first non-Texas Laredo Taco Co. location on Jan. 9 outside of Pittsburgh and since then, another five locations have welcomed customers primarily around the Nashville, Tenn., area and in Pennsylvania, President and CEO Robert Owens revealed during Sunoco's first-quarter earnings call May 5, 2016. 

Owens continued saying that expansion plans for the proprietary foodservice program, they  acquired when it took ownership of Stripes convenience stores will be a key driver moving forward. 

Laredo Taco offer large portions of consumers' favorite Mexican food, handmade with the freshest ingredients every day. Eggs, bacon, potatoes, chorizo, beans and cheese are served up exactly how the customer wants, wrapped in handmade tortillas made fresh daily in Laredo Taco Co. kitchens.

Foodservice is driving success within the c-store sector and at Sunoco's Aloha Petroleum Ltd. business in Hawaii, they inked a store development agreement with Dunkin' Donuts to be the exclusive developer of Dunkin' Donuts restaurants in the Aloha State for an initial term of eight years. Aloha has committed to building and operating 15 units as a start. 

Approximately half of the 15 restaurants will be built on existing Aloha-controlled Island Mart c-store properties, Owens said. The remaining half will be standalone restaurants developed on properties the company will acquire in the future.

From private label too Branded foodservice there is no doubt that Sunoco understand the undercurrents driving retail today and grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared food is key to continues growth and success at Sunoco.  Foodservice Solutions® team salutes Sunoco’s success. 

Invite Foodservice Solutions® to complete a grocerant program assessment, grocerant scorecard, brand, or product placement assistance.  Since 1991 www.FoodserviceSolutions.us   of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us 253-759-7869 

Restaurants Customer Discontinuity Growing

The Grocery store sector Achilles Heel has long been time.  Most consumers don’t want to spend the time to walk around the store looking for the 7 or 8 items that they need.  After all most consumers buy only 100 different items from the grocery store per year, they buy those items over and over again. 

Saving time has become a valued reason for shopping at new venues including convenience stores as they are building loyalty by offering shoppers convenient and effortless ways to get the products, meals and meal components for Take-Out they want, in the shortest time possible according to Foodservice Solutions® Grocerant Guru®. 

Let’s face it consumer no longer want to cook from scratch, let alone spend the time walking around a grocery stores with 60,000 items that they will never buy.  In a new report released by Acosta edified restaurant customer discontinuity growing as restaurant customers increasingly relying on someone else to handle the kitchen work, even if the meal is enjoyed at home.

Acosta’s  high-level look at today’s consumption patterns finds consumers turning to such new food channels as third-party delivery services, subscription meal kits and so-called frictionless takeout programs. Our Grocerant Guru® began speaking about this in 1997, and we can’t help but wonder why restaurant chains are so reluctant to evolve? 

Today Supermarkets and convenience stores  have evolved to the point that consumers say their Ready-2-Eat and Heat-n-Eat fresh prepared food is equal to or better than restaurant quality according to Foodservice Solutions® latest study.  In fact the Acosta study found that they garnered 16 % of consumers in any three-month stretch.  That’s 16% not going to restaurants for Ready-2-Eat or simply prepared food. 

It does not get better for the restaurant sector the study found that 57 percent of consumers had eaten a prepared supermarket meal at home during the three months preceding the survey, while only 42 percent had ordered delivery from a restaurant. Sales of the supermarket meals have doubled since 2006, to $27.5 billion, according to the study.

Meal kits companies are however pantry busters for the grocery sector.  Meal Kits are simply boxes of prepped and pre-measured ingredients that consumers receive through a shipping service to cook at home.  Five years ago they did not exist the study found 8 % of customers are buying the kits. With one in five consumers with children, or 20 percent, are opting for that source of meals.  

Millennials are drive change as they grew up with the internet and are constantly in search of discovery new ways to do the same things their parents did but they are trying to do it better and faster.  Seeking a frictionless food solution seems second nature to Millennials according to our Grocerant Guru®.   All the while restaurant chains C-level suites are filled with Boomer CEO’s trying do what they always have done. 

Helping foodservice operators evolve into a consumer Grocerant niche position is what Foodservice Solutions® does best.  Invite Foodservice Solutions® to complete a grocerant program assessment, grocerant scorecard, brand, or product placement assistance.  Since 1991 www.FoodserviceSolutions.us

of Tacoma, WA has been the global leader in the Grocerant niche. Steve@FoodserviceSolutions.us