Meal Kits are Not Dead: Why Restaurants and C-Stores Should Worry

 

As families across the nation gear up for the back-to-school season, meal kit companies like HelloFresh are stepping up their game, catering to the needs of time-starved parents and cash-strapped families. With a focus on convenience, customization, and affordability, meal kits are far from dead—in fact, they are thriving.

According to Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions® for restaurants and convenience stores (C-stores), this growing trend poses a significant threat, as these meal solutions become increasingly popular among consumers looking for easy and nutritious options. Let’s delve into why restaurants and C-stores should be concerned about the resurgence of meal kits, particularly in the context of the back-to-school season.

HelloFresh's New Family-Friendly Menu: A Game-Changer

HelloFresh has recently launched a comprehensive family-friendly menu that promises to make mealtime easier for busy parents and engaging for children. The new menu features:

·         “Build-a-Plate” Options: Allowing families to customize meals with various sides, toppings, and add-ons. Options like the Spaghetti & Meatball Bar or Grilled Cheese Sandwich Bar cater to individual tastes, making meal prep fun and interactive.

·         Six-Serving Meal Plan: Perfect for larger families or those who enjoy leftovers, this plan accommodates households with hearty appetites.

·         “Big Batch” Recipes: Dishes like Slow Cooker Slammin’ BBQ Chicken Sandos provide double portions, making it easy to plan for multiple meals.

·         Kid-Oriented Meals: Quick and child-friendly options such as Turkey Gouda Pinwheels and Cheesy Flatbread Pizza ensure that even the pickiest eaters are satisfied.

·         Quick Prep Time: Meals like Hail Caesar Chicken Wraps can be prepared in 20 minutes or less, catering to parents juggling busy schedules.

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In addition, HelloFresh's partnership with No Kid Hungry adds a socially responsible aspect, donating $1 for every kids' meal purchased in September, helping to provide 10 meals for children facing food insecurity.

Five Reasons Restaurants Should Worry

1.       Convenience Factor: Meal kits offer unparalleled convenience. With everything pre-measured and ready to cook, parents can skip the meal planning, grocery shopping, and lengthy prep work. This convenience is a strong selling point, especially for busy families balancing school, work, and extracurricular activities.

2.       Cost-Effective Options: The new six-serving meal plan from HelloFresh is a boon for budget-conscious families. As parents spend heavily on back-to-school supplies, the affordability of meal kits can be a more appealing alternative to dining out, where the costs can quickly add up.

3.       Customization and Variety: The “Build-a-Plate” concept and diverse menu options cater to individual preferences, something traditional restaurants may struggle to match. This customization appeals to families with picky eaters, ensuring everyone gets something they enjoy.

4.       Health Consciousness: Many parents are increasingly concerned about the nutritional value of their meals. Meal kits often come with detailed nutritional information and balanced ingredients, making it easier for families to make healthier choices compared to dining out.

5.       In-Home Dining Experience: The pandemic has shifted many families toward enjoying meals at home. Meal kits provide a restaurant-quality experience without the need to leave the house, making it a comfortable and safe option.

Five Reasons C-Stores Should Worry

1.       Decline in Impulse Purchases: Meal kits provide all the necessary ingredients, reducing the need for last-minute grocery runs. This trend can lead to a decline in impulse purchases, a significant revenue stream for C-stores.

2.       Convenience and Quality: While C-stores offer convenience, they often lack the quality and freshness of ingredients provided in meal kits. HelloFresh's curated, fresh ingredients offer a superior alternative, especially for families prioritizing quality over quick grabs.

3.       Targeted Marketing to Families: Meal kit companies like HelloFresh are increasingly targeting families with child-friendly options and educational elements, something C-stores typically do not offer. This focus on family dynamics can draw customers away from quick, less personalized C-store meals.

4.       Sustainability and Waste Reduction: Many meal kit companies emphasize eco-friendly packaging and portion control, reducing food waste. As environmental consciousness grows, consumers may prefer meal kits over C-store offerings, which often come with excessive packaging and processed foods.

5.       Loyalty Programs and Partnerships: With initiatives like the partnership with No Kid Hungry, meal kit companies are building brand loyalty and social responsibility. This community-focused approach can resonate more deeply with consumers than the convenience-driven focus of C-stores.

Think About This

Meal kits are not just surviving; they are thriving by adapting to the changing needs of consumers. The back-to-school season amplifies the appeal of these kits, as families seek convenient, cost-effective, and nutritious meal solutions. As meal kits like those offered by HelloFresh continue to innovate and cater to families, restaurants and C-stores need to be wary. The blend of convenience, customization, quality, and social responsibility is a powerful combination that is capturing the hearts (and wallets) of consumers. It’s time for traditional dining and retail outlets to rethink their strategies or risk being left behind in the wake of the meal kit revolution.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Chicken's Undercover Growth Leader: Krispy Krunchy Chicken

 

In the bustling world of quick-service chicken, a quiet yet powerful player is emerging as a growth leader. While legacy chains scramble to retain market share amidst a highly competitive landscape, Krispy Krunchy Chicken (KKC) is stealthily carving out its niche, capturing the attention of savvy consumers and industry insiders alike. Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, is ready to dive into the under-the-radar success story of KKC and explore why its growth is set to continue.

The Quiet Evolution of the Chicken Market

Legacy chicken chains, long considered stalwarts in the industry, are facing significant challenges. Brands that once dominated the market are now witnessing a decline in customer loyalty and market share. Factors such as menu fatigue, pricing wars, and a lack of innovation have left these giants vulnerable. Meanwhile, smaller, more agile players like Krispy Krunchy Chicken are seizing the opportunity to differentiate themselves and attract a new wave of consumers.

KKC's growth is particularly remarkable when considering the brand's unique positioning. Founded in Louisiana in 1989, KKC has quietly expanded its footprint to nearly 3,000 locations across 47 states. Unlike traditional standalone QSRs, KKC operates primarily through a "store-in-store" model, partnering with convenience stores, truck stops, universities, casinos, and big-box retailers. This strategy allows KKC to offer its signature hand-breaded, mild Cajun-spiced fried chicken and tenders in convenient, accessible locations, enhancing profitability for its partners and driving customer traffic.

5 Reasons Why Krispy Krunchy Chicken's Growth Will Continue

1.       Value Proposition: In an era where consumers are more budget-conscious than ever, KKC's introduction of the $4 Value Meal is a masterstroke. This offering provides customers with a choice of two pieces of dark meat bone-in fried chicken or two hand-breaded Cajun tenders, served with crispy potato wedges. As CEO Jim Norberg aptly puts it, "We represent quality, cravability, and value." This balance of affordability and quality ensures that KKC continues to attract a broad customer base, particularly during economically challenging times.

2.       Strategic Location Partnerships: KKC's store-in-store model is a game-changer. By partnering with high-traffic locations like convenience stores and big-box retailers, KKC ensures consistent visibility and accessibility. This model reduces overhead costs and provides KKC with a steady stream of customers who are already shopping at these locations. The result is a mutually beneficial relationship that boosts sales and enhances the customer experience.

3.       Product Quality and Uniqueness: KKC distinguishes itself with its mildly Cajun-spiced offerings, a nod to its Louisiana roots. The chicken is marinated and breaded in small batches, ensuring freshness and a superior taste. This commitment to quality and unique flavor profile sets KKC apart from competitors and keeps customers coming back for more.

4.       Flexibility and Innovation: Unlike many legacy brands, KKC is not bogged down by a rigid corporate structure. This flexibility allows the brand to quickly adapt to market trends and consumer preferences. For instance, the launch of the $4 Value Meal demonstrates KKC's ability to respond to demand for affordable, high-quality meals. This nimbleness is a key factor in the brand's sustained growth.

5.       Focused Marketing and Brand Positioning: KKC's brand messaging is clear and consistent. The emphasis on value, quality, and a distinctly Cajun culinary experience resonates with a diverse consumer base. Furthermore, the brand's limited availability on delivery platforms such as DoorDash, UberEats, and GrubHub creates an exclusive, must-visit appeal, encouraging customers to visit in person and potentially increase impulse purchases.

Think About This

Krispy Krunchy Chicken's rise as a growth leader in the chicken QSR segment is no accident. The brand's strategic focus on value, quality, and convenience, combined with its innovative store-in-store model, has positioned it as a formidable player in the industry. As legacy chains struggle to retain relevance, KKC continues to thrive, offering a compelling alternative for consumers seeking delicious, affordable chicken options.

In a market ripe for disruption, Krispy Krunchy Chicken's formula for success is clear: stay adaptable, prioritize value, and never compromise on quality. As the Grocerant Guru®, I foresee continued growth for this undercover powerhouse, as it quietly but confidently claims its rightful share of the chicken QSR market. The next time you crave a satisfying meal, keep an eye out for KKC—you might just discover your new favorite chicken spot.

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

Fast Food Drive-Thru’s: The Need for Speed and Beyond

 

In the fast-paced world of quick-service restaurants (QSRs), speed at the drive-thru can make or break a brand. According to recent studies, the average time spent in a drive-thru is 344 seconds, or nearly six minutes. While this might seem like a blink of an eye, for consumers accustomed to instant gratification, every second counts.

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® believes the top performers in the industry have mastered the art of speed and efficiency, while others lag behind, struggling to keep up with evolving consumer expectations. Let's delve into the state of drive-thru service, the leaders of the pack, the stragglers, and how innovative strategies can turn things around.

Top 7 Fast Food Drive-Thru Performers

1.       Chick-fil-A

o    Average Time: 327.1 seconds

o    Key Strengths: Consistently praised for friendly service and accuracy, Chick-fil-A has implemented multiple drive-thru lanes and efficient ordering systems, including digital menu boards and tablet-armed employees taking orders before customers reach the window.

2.       Taco Bell

o    Average Time: 310.2 seconds

o    Key Strengths: Known for its quick service, Taco Bell utilizes innovative kitchen layouts and advanced technology to streamline food preparation and delivery.

3.       McDonald's

o    Average Time: 349.3 seconds

o    Key Strengths: With a global reputation for speed, McDonald's employs a sophisticated order and payment system, along with a well-trained staff to keep lines moving.

4.       KFC

o    Average Time: 322.8 seconds

o    Key Strengths: KFC's streamlined processes and focus on order accuracy have helped it maintain a strong drive-thru performance.

5.       Burger King

o    Average Time: 344.6 seconds

o    Key Strengths: Leveraging digital ordering and efficient kitchen practices, Burger King has been able to maintain a competitive speed at the drive-thru.

6.       Wendy's

o    Average Time: 342.6 seconds

o    Key Strengths: Wendy's commitment to quality and freshness, combined with efficient service, has earned it a place among the top performers.

7.       Dunkin'

o    Average Time: 328.1 seconds

o    Key Strengths: Focused on coffee and breakfast items, Dunkin' has optimized its drive-thru for speed and convenience, catering to the morning rush.

The Challenges for the Rest

While the top 7 brands have mastered drive-thru efficiency, many others struggle with slower service times, order inaccuracies, and inadequate technology. These issues can lead to customer frustration, lower satisfaction, and ultimately, decreased brand loyalty.

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Speed of Service Matters

Common Failings:

·         Slow Service Times: Many QSRs lack efficient kitchen layouts or are understaffed, leading to longer wait times.

·         Order Inaccuracies: Poor communication between the order point and the kitchen often results in incorrect orders, causing delays and dissatisfaction.

·         Outdated Technology: Many chains still rely on outdated POS systems and manual processes, which hinder efficiency.

·         Lack of Staff Training: Inconsistent training and high employee turnover can lead to slower service and mistakes.

Strategies for Improvement

To compete with the top players, other QSRs need to prioritize speed and accuracy. Here are some key strategies:

1.       Embrace Technology: Implementing advanced ordering systems, digital menu boards, and mobile ordering can streamline the drive-thru process. Technologies like AI can also predict peak times and optimize staffing.

2.       Optimize Kitchen Layouts: An efficient kitchen design can significantly reduce food preparation time. Brands should consider flow optimization and equipment placement to speed up service.

3.       Employee Training: Investing in comprehensive training programs can improve staff efficiency and reduce errors. Happy, well-trained employees are also more likely to provide excellent customer service.

4.       Clear Communication: Enhancing communication between order takers and kitchen staff can reduce mistakes and speed up the process. Headsets and digital screens can facilitate better information flow.

5.       Menu Simplification: Streamlining the menu can reduce decision-making time for customers and preparation time for staff, speeding up the overall process.

Brand Messaging and Inviting Inside Pick-Ups

In addition to improving drive-thru efficiency, QSRs can leverage brand messaging and a welcoming invitation to pick up orders inside the restaurant. This approach not only alleviates drive-thru congestion but also offers a more personalized customer experience. Promoting a cozy, clean, and inviting interior can encourage customers to come inside, where they can see food preparation, engage with friendly staff, and enjoy a more relaxed environment.

Why It Matters:

·         Brand Differentiation: A unique in-store experience can set a brand apart from competitors.

·         Increased Sales: Customers who enter the restaurant may be tempted to purchase additional items, boosting sales.

·         Enhanced Customer Loyalty: A welcoming atmosphere and positive interactions can strengthen brand loyalty and encourage repeat visits.

Think about this, while the drive-thru remains a cornerstone of the fast-food industry, the path to success is paved with speed, accuracy, and innovative customer engagement. As the Grocerant Guru®, I see immense potential for brands that embrace technology, optimize operations, and create inviting spaces. By doing so, they can not only improve service times but also enhance the overall customer experience, driving brand adoption and loyalty in an increasingly competitive market.

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

Burger King's Missteps are a Franchisee Conundrum

 

In the competitive fast-food landscape, staying relevant requires innovation, consistency, and an acute understanding of consumer preferences. Unfortunately for Burger King, a series of missteps over recent years has left the iconic chain trailing behind its competitors. Steven Johnson the Grocerant Guru® at Tacoma, WA based Foodservice Solutions®, presents his analysis of these challenges and the opportunities for growth. Let’s delve into seven critical missteps that have contributed to Burger King's current conundrum and how other fast-food giants are "eating Burger King's lunch" with more profitable strategies.

1. Inconsistent Menu Innovations

Burger King has struggled with maintaining a coherent menu strategy. While innovations like the Impossible Whopper garnered attention, many of their limited-time offers (LTOs) have failed to resonate. For example, the introduction of the 'Satisfries' in 2013, a healthier alternative to regular fries, was met with confusion and was ultimately discontinued. This inconsistency contrasts with McDonald's, which successfully leverages its core menu while introducing exciting LTOs, like the McRib, to drive traffic and excitement.

2. Lack of Digital Integration

In an era where digital integration is crucial, Burger King has lagged in developing a seamless digital experience. Competitors like McDonald's and Starbucks have successfully integrated mobile apps, loyalty programs, and delivery options, enhancing customer convenience and engagement. Burger King's efforts, such as the 'Whopper Detour' campaign, were creative but lacked sustainable digital infrastructure to support ongoing engagement.

3. Subpar Customer Experience

Customer experience remains a vital aspect of fast-food success. Reports of inconsistent service quality, long wait times, and poorly maintained restaurants have plagued Burger King. In contrast, companies like Chick-fil-A have built their brand around exceptional customer service, leading to higher customer loyalty and profitability per unit. For instance, Chick-fil-A's average unit volume (AUV) is approximately $4.5 million, compared to Burger King's $1.4 million.

4. Inadequate Franchisee Support

Burger King's relationship with its franchisees has been strained, impacting brand consistency and profitability. Franchisees have raised concerns over high operational costs and a lack of support from the corporate level. This has led to a reduction in franchisee satisfaction and, in some cases, store closures. Meanwhile, Subway has faced similar challenges but has begun addressing them by consolidating leadership and providing more robust support systems.

5. Marketing Missteps

While Burger King has had some notable marketing successes, such as the 'Moldy Whopper' campaign, other efforts have missed the mark. The brand's frequent reliance on shock value marketing has not always translated into sustained sales growth. Competitors like Taco Bell have excelled by aligning their marketing with the tastes and preferences of their target demographics, leveraging humor, nostalgia, and innovative product launches.

6. Health and Wellness Trends Ignored

As consumer preferences shift towards healthier options, Burger King has been slow to adapt. While they have made strides with plant-based options like the Impossible Whopper, they still lag behind brands like Panera Bread and Chipotle, which have fully embraced the health and wellness trend. This oversight has cost Burger King potential market share among health-conscious consumers.

7. Underestimating the Breakfast Segment

The breakfast market represents a significant growth opportunity, yet Burger King's efforts in this segment have been inconsistent. While the brand has tried to capitalize on breakfast with items like the Croissan'wich, it has not matched the success of competitors like McDonald's, which generates a substantial portion of its sales from breakfast items. Wendy's recent aggressive entry into the breakfast market further highlights Burger King's missed opportunity.

Profitability Per Unit: A Critical Metric

The profitability per unit (AUV) is a crucial metric for assessing the health of a fast-food brand. Burger King's AUV of $1.4 million is significantly lower than its competitors. For instance, McDonald's leads the pack with an AUV of around $2.9 million, while Chick-fil-A enjoys an AUV exceeding $4.5 million. This disparity underscores the challenges Burger King faces in driving incremental growth and profitability.

Path Forward: Driving Incremental Growth

To regain market share and improve profitability, Burger King must address these missteps head-on. Here are several strategies that could help the brand reposition itself:

1.       Consistent Menu Innovation: Focus on a core menu that resonates with consumers while introducing LTOs that complement existing offerings.

2.       Enhanced Digital Presence: Invest in a robust digital infrastructure, including a user-friendly app, loyalty programs, and delivery partnerships.

3.       Improved Customer Experience: Standardize service quality across all locations and invest in staff training.

4.       Franchisee Support: Strengthen relationships with franchisees by offering better support, reducing operational costs, and ensuring profitability.

5.       Strategic Marketing: Shift towards more sustainable and brand-aligned marketing efforts that resonate with target demographics.

6.       Health-Conscious Options: Expand healthier menu offerings to cater to the growing demand for nutritious options.

7.       Breakfast Expansion: Capitalize on the breakfast segment with competitive offerings and marketing campaigns.

Think About This

Burger King's journey has been riddled with challenges, but the path to recovery is clear. By addressing these missteps and implementing strategic changes, Burger King can reclaim its position in the fast-food industry. As the Grocerant Guru®, I believe that with a renewed focus on customer experience, digital integration, and menu innovation, Burger King can once again be a formidable player in the market, ensuring franchisee satisfaction and driving incremental growth.

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday than tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.