Who’s afterrestaurateurs food dollars and why they should care. While food consumers are ahighly fragmented group there are universal commonalities creating channeldisruptions. Consumers want what they want when they want it! Today it is allabout the consumer buying what the type of food they want, where they buy itand how they buy it is in flux. You can buy food from large format foodretailers the ilk of Safeway Lifestyle stores, Kroger’s Fred Meyer,Walmart Supercenters and, Whole Foods, or Smaller Format retailers like TraderJoe, Fresh & Easy (Tesco), Dollar Stores, Walgreens, and of course restaurants.
The line betweenrestaurants and food retailers is growing ever thinner. The fight for America'sfood dollars continues to intensify as consumers find fresh preparedready-2-eat food options at a wide and growing array of outlets across almostevery channel: convenience stores, chain drug stores, restaurants, grocerystores, club stores, vending and even more non-food retailers like dollarstores. While manufacturers, retailers and restaurants worry about choiceoverload, consumers have embraced their new choices and show no signs ofreturning to the old ways. This fight is taking place in what is called thegrocerant niche.
The restaurant industryis not an industry known for trying to be first as in fastest to market with anideation, food or technology advance. In the United States the larger the chainin almost all cases the more slowly they are to adopt something than a smallerchain or independent restaurants will. Chain restaurants goal is simple feedone meal at a time in the restaurant while protecting and edifying the brand.
Historically chainrestaurant leaders have denied the credibility of start-up competitors asnon-relevant. The pizza sector is a great example; evolving from family dinningindependents to national chain of "Red Roof" Italian, then todelivery only outlets and now take-N-bake is garnering market share inthe pizza sector. (Note: Home Made Pizza Company and Papa Murphy's are further examplesof take and bake pizza operators.)
Trends in the FoodIndustry Point to an Increase in Non-Traditional Meal Occasions
At the intersection ofthe consumer, fresh prepared food and technology we fine that consumer eatingbehavior is evolving and is now beyond the control of traditional foodmarketers. Evolving culture and lifestyle, demographics along with the newuncertain 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 foodmarketplace where convenience vies with price over legacy brands. Recentadvances in food packaging and new points of non-traditional food distributionhave empowered consumer choice, and Americans are embracing these choices evenas legacy marketers cringe. Who's after restaurant food dollars… simply put…everyone.
Why should you care ifWalgreens 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 areselling ready-2-eat and or heat-N-eat fresh pizza? Why should you care ifCoinstar is selling Seattle Best Coffee at 1,000 locations for $1.00?
You should care becausethey are selling it, and you are not! The fastest growing sector of retail foodservice for the past four years has been the Convenience store sector. TheC-store sectors growth in large part has been driven by fresh prepared food.Non-traditional avenues of distribution are growing, gobbling market sharewhile establishing new patterns of consumption, price points and customerloyalty.
The Shopper is inControl Spurring New Retail Food Formats
Trader Joe's and WholeFoods have created ready-2-eat and heat-N-eat fresh prepared food items withqualitative differentiation as an entity with identity that has help propelthem into ready-2-eat fresh prepared food leadership. In fact recent researchshows 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 distinctiveofferings. More important each is leading with innovative products and packagesize that create value and have positioned each chain as a foodshopping destinationfor meal components customized and personalized forimmediate consumption or mix and matched for a meal time at home. In short theyare stealing your customers.
Walgreens fresh prepared food is restaurantquality and priced less than Panera Bread or Corner Bakery CAFE. Both Panera Bread and Corner Bakery CAFEthrive in urban locations.Walgreens is now growing price, quality and speed of service advantages overlegacy retailers. Legacy restaurant chains must reconsider the speed at whichthey evolve and adapt or non-traditional outlets will capture profits marginsas well.
Traditional views ofmeals and mealtime can pretty much be discarded. Legacy retailers waiting forthe "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 mayprove that waiting too long will not work this time.
Product, Packaging,Placement, Portability and Price are Foodservice Solutions® 5 P’s
The retail food world isevolving at an ever increasing pace filled with innovation in food, portionsize, points of distribution, and quality fresh prepared meal solutions. Theprice, value, service equilibrium is resetting in retail foodservice. In orderto edify the brand and reinforce consumer relevance restaurateurs must leverageFoodservice Solutions® 5P's of food marketing.
Many legacy foodretailers continue to practice brand protectionism, stifle the brand whilediminishing consumer relevance. The consumer is dynamic not static. Brands mustbe dynamic, evolving with the consumer. Four more years of watching otherretail sectors thrive should be long enough. Success in the restaurant world isno longer simply about what happens within your 4 walls.
Steven Johnson isGrocerant Guru at Tacoma, WA based Foodservice Solutions®, with extensiveexperience as a multi-unit restaurant operator, consultant, brand / productpositioning expert and public speaking. Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant
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