The line between drug stores, dollar stores, grocery stores,
convenience stores, and restaurants 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 food options at a wide and growing array of outlets
across almost every channel: convenience stores, chain drug stores,
restaurants, grocery stores, club stores, vending and even more non-food
retailers the likes of furniture retailer Ikea.
Tacoma, WA based Foodservice Solutions® Grocerant
Guru® Steven Johnson stated “as manufacturers, retailers, and restaurants worry
about choice overload, consumers have embraced these new avenues of
distribution, the new choices, mix and match meal bundling, and show no signs
of returning to the old ways. A food fight is taking place in what is called the
grocerant niche for a larger share of the customer’s stomach are you positioned
to win new migrating customers?”
Regular readers of this blog know 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. With continued year over year customer count declines we ask; How
is that Working?
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.)
Increase in Drug Store and Dollar store Meal Occasions
Our Grocerant Guru® stated “it is at the intersection of the
consumer, fresh prepared food, and technology we fine that consumer path to
purchase behavior evolving.” Consumer
adoption and migration within the Ready-2-Eat and Heat-N-Eat space and is now
beyond the control of traditional legacy chain food marketers.”
Simply put consumers are evolving the culture and lifestyle of
meals and purchasing of meal componeants faster that most legacy retailers ever
could have imagined. There is a set of
new consumer demographics along with the new uncertain economy are all putting
pressure on the legacy food retail brands.
Time starved consumers are suffering from the 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.
Should you care if Walgreens is selling
fresh prepared Ready-2-Eat and Made-2-Order sandwiches? 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?
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 Like Today’s New Retail Food Formats
Trader Joe's and Whole Foods have
created grocerant niche fresh foods with distinctive offerings. More important
each is leading with innovative products and package size that create value and
have positioned each chain as a food shopping destination for meal components
customized and personalized for immediate consumption or mix and matched for a
meal time at home. In short they are stealing your customers.
Consumer’s believe that Walgreens fresh
prepared food is restaurant quality.
They know it is 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.
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.
FIVE P’s of Grocerant Marketing: Product, Packaging, Placement,
Portability and Price
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 the
brand and reinforce consumer relevance restaurateurs must leverage Foodservice
Solutions® 5P's of food marketing.
Many legacy 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 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 4 walls.
