Fast Casual Restaurant Customer Migration is Intensifying

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The line between restaurants and food retailers is growing ever thinner.The fight for America's food dollars continues to intensify as consumers findfresh prepared ready-2-eat food options at a wide and growing array of outletsacross almost every channel: convenience stores, chain drug stores,restaurants, grocery stores, club stores, vending and even more non-foodretailers like dollar stores. While manufacturers, retailers and restaurantsworry about choice overload, consumers have embraced their new choices and showno signs of returning to the old ways. This fight is taking place in what iscalled the grocerant niche.The restaurant industry is not an industry known for trying to be first asin fastest to market with an ideation, food or technology advance. In theUnited States the larger the chain in almost all cases the more slowly they areto adopt something than a smaller chain or independent restaurants will. Chainrestaurants goal is simple feed one meal at a time in the restaurant whileprotecting and edifying the brand.Historically chain restaurant leaders have denied the credibility ofstart-up competitors as non-relevant. The pizza sector is a great example;evolving from family dinning independents to national chain of "RedRoof" Italian, then to delivery only outlets and now take-N-bake is garnering marketshare 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 inNon-Traditional Meal OccasionsAt the intersection of the consumer, fresh prepared food and technology wefine that 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 put…everyone.Why should 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? Whyshould you care if Coinstar is selling Seattle Best Coffee at 1,000 locationsfor $1.00?You should care because they are selling it, and you are not! The fastestgrowing sector of retail food service for the past four years has been theConvenience store sector. The C-store sectors growth in large part has beendriven by fresh prepared food. Non-traditional avenues of distribution aregrowing, gobbling market share while establishing new patterns of consumption,price points and customer loyalty.The Shopper is in Control Spurring New Retail FoodFormatsTrader 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. Infact recent research shows that both Trader Joe's and Whole Foods are eachknown for high quality (restaurant quality) ready-2-eat and heat-N-eat foodswith distinctive offerings. More important each is leading with innovativeproducts and package size that create value and have positioned each chain as afood shopping destination for meal components customized andpersonalized for immediate consumption or mix and matched for a meal time athome. In short they are stealing your customers.Walgreens fresh prepared food is restaurant quality and priced less than Panera Bread orCorner Bakery CAFE. Both Panera Bread and Corner Bakery CAFE thrive in urban locations. Walgreens is now growingprice, quality and speed of service advantages over legacy retailers. Legacyrestaurant chains must reconsider the speed at which they evolve and adapt ornon-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 simplymight be out of luck this time. Legacy food retailers may not like to be firstmovers very much but it may prove that waiting too long will not work thistime.Product, Packaging, Placement, Portability and Price areFoodservice Solutions® 5 P’s The retail food world is evolving at an ever increasing pace filled withinnovation in food, portion size, points of distribution, and quality freshprepared meal solutions. The price, value,service equilibrium is resetting in retail foodservice. In order to edify thebrand and reinforce consumer relevance restaurateurs must leverage FoodserviceSolutions® 5P's of food marketing.  Many legacy food retailers continue to practice brand protectionism, stiflethe brand while diminishing consumer relevance. The consumer is dynamic notstatic. Brands must be dynamic, evolving with the consumer. Four more years ofwatching other retail sectors thrive should be long enough. Success in therestaurant world is no longer simply about what happens within your 4 walls.StevenJohnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions, withextensive experience as a multi-unit operator, consultant and brand/productpositioning. Since 1991 Foodservice Solutions® of Tacoma, WA hasbeen the global leader in the Grocerant niche for more on Steven A. Johnson andFoodservice Solutions® visit http://www.linkedin.com/in/grocerant ortwitter.com/grocerant