Theline between restaurants and food retailers is growing ever thinner. The fightfor America’s food dollars continues to intensify as consumers find freshprepared ready-2-eat food options at a wide and growing array of outlets acrossalmost every channel: convenience stores, chain drug stores, restaurants,grocery stores, club stores, vending and even more non-food retailers likedollar stores. While manufacturers,retailers and restaurants worry about choice overload, consumers have embracedtheir new choices and show no signs of returning to the old ways. This fight istaking place in what is called the grocerant niche.
Therestaurant industry is not an industry known for trying to be first as infastest to market with an ideation, food or technology advance. In the UnitedStates the larger the chain in almost all cases the more slowly they are toadopt something than a smaller chain or independent restaurants will. Chain restaurants goal is simple feed onemeal at a time in the restaurant while protecting and edifying the brand.
Historicallychain restaurant 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 to delivery onlyoutlets and now take-N-bake is garnering market share in the pizza sector.
Atthe intersection of the consumer, fresh prepared food and technology we finethat consumer eating behavior is evolving and is now beyond the control oftraditional food marketers. Evolving culture and lifestyle, demographics alongwith the new uncertain economy are all putting pressure on the American foodconsumer: Demands of work, economic shrinkage, demands of raising a family,commuting, social interaction, kid’s after-school activities, all contribute toa food marketplace 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 puteveryone.
Whyshould you care if Walgreens is selling fresh prepared ready-2-eat andmade-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 sellingSeattle Best Coffee at 1,000 locations for $1.00?
Youshould care because they are selling it, and you are not! The fastest growingsector of retail food service for the past four years has been the Conveniencestore sector. The C-store sectors growthin large part has been driven by fresh prepared food. Non-traditional avenuesof distribution are growing, gobbling market share while establishing newpatterns of consumption, price points and customer loyalty.
Trader Joe’s and Whole Foods have created ready-2-eat and heat-N-eat freshprepared food items with qualitative differentiation as an entity with identitythat has help propel them into ready-2-eat fresh prepared food leadership. In fact recent research shows that bothTrader Joe’s and Whole Foods are each known for high quality (restaurantquality) ready-2-eat and heat-N-eat foods with distinctive offerings. More important each is leading withinnovative products and package size that create value and have positioned eachchain as a food shopping destinationfor meal components customized and personalized for immediate consumption ormix and matched for a meal time at home. In short they are stealing yourcustomers.
Walgreens fresh prepared food is restaurant quality and priced less thanPanera Bread or Corner Bakery. BothPanera Bread and Corner bakery thrive in urban locations. Walgreens is nowgrowing price, quality and speed of service advantages over legacy retailers. Legacy restaurant chains must reconsider thespeed at which they evolve and adapt or non-traditional outlets will captureprofits margins as well.
Traditionalviews of meals and mealtime can pretty much be discarded. Legacy retailerswaiting for the “next big thing” to copy simply might be out of luck thistime. Legacy food retailers may not liketo be first movers very much but it may prove that waiting too long will notwork this time.
Theretail food world is evolving at an ever increasing pace filled with innovationin food, portion size, points of distribution, and quality fresh prepared mealsolutions. The price, value, serviceequilibrium is resetting in retail foodservice. In order to edify the brand and reinforceconsumer relevance restaurateurs leverage Foodservice Solutions® 5P’s of foodmarketing:Product, Packaging, Placement, Portability and Price.
Many legacyfood retailers continue to practice brand protectionism, stifle the brand whilediminishing consumer relevance. The consumeris dynamic not static. Brands must bedynamic, evolving with the consumer. Fouryears of watching other retail sectors thrive should be long enough. Success inthe restaurant world is no longer simply about what happens within your 4walls.
Invite FoodserviceSolutions® to complete a grocerant program assessment, brand, product placementor positioning assistance. Since 1991 Foodservice Solutions® of Tacoma, WA hasbeen the global leader in the Grocerant niche visit Facebook.com/StevenJohnson, Linkedin.com/in/grocerant ortwitter.com/grocerant.
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