Restaurant Food Channel Disruptions Continue to Garner Strength.

Who’s after restaurateurs food dollars and why they should care. While food consumers are a highly fragmented group there are universal commonalities creating channel disruptions. Consumers want what they want when they want it! Today it is all about the consumer buying what the type of food they want, where they buy it and how they buy it is in flux. You can buy food from large format food retailers the ilk of  Safeway Lifestyle stores, Kroger’s Fred Meyer, Walmart Supercenters and, Whole Foods, or Smaller Format retailers like Trader Joe, Fresh & Easy (Tesco), Dollar Stores, Walgreens, and of course restaurants.

 

The line between restaurants and food retailers is growing ever thinner. The fight for America's food dollars continues to intensify as consumers find fresh prepared ready-2-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 like dollar stores. While manufacturers, retailers and restaurants worry about choice overload, consumers have embraced their new choices and show no signs of returning to the old ways. This fight is taking place in what is called the grocerant niche.

 

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.

 

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.)

 

Trends in the Food Industry Point to an Increase in Non-Traditional Meal Occasions

 

At the intersection of the consumer, fresh prepared food and technology we fine that consumer eating behavior is evolving and is now beyond the control of traditional food marketers. Evolving culture and lifestyle, demographics along with the new uncertain 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 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. Who's after restaurant food dollars… simply put… everyone.

 

Why 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?

 

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.

 

The Shopper is in Control Spurring New Retail Food Formats

 

Trader Joe's and Whole Foods have created ready-2-eat and heat-N-eat fresh prepared food items with qualitative differentiation as an entity with identity that has help propel them into ready-2-eat fresh prepared food leadership. In fact recent research shows 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 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 destinationfor 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.

 

Walgreens fresh prepared food is restaurant quality 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 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.

 

Product, Packaging, Placement, Portability and Price are Foodservice Solutions® 5 P’s

 

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 more 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.

 

Steven Johnson is Grocerant Guru at Tacoma, WA based Foodservice Solutions®, with extensive experience as a multi-unit restaurant operator, consultant, brand / product positioning expert and public speaking. Facebook.com/Steven Johnson, Linkedin.com/in/grocerant or twitter.com/grocerant

 

Views: 109

Tags: Convenience, Dollar, Food, Grocerant, Grocery, Johnson, Packaging, QSR's, Restaurant, Steven, More…Supermarkets, store, stores

Comment

You need to be a member of FohBoh to add comments!

Join FohBoh

Advertisments

 

DEPARTMENTS

Social Wine Club for Craft Wineries

Smartbrief

The Sip

The Sip: Stay up-to-date on the beer, wine and spirits category with original content from SmartBrief -More

New food offerings helped Starbucks boost sales

Baked goods, breakfast sandwiches and the first price increases in nearly four years helped lead Starbucks to a 7% same-store -More

JOBS & CAREERS

Posting a job or finding a job starts here at FohBoh. Call us about special $50 posting packages to syndicate across all major jobs boards.

National News

Ward Whitworth Named President for On The Border Mexican Grill

On The Border Mexican Grill & Cantina, which was recently acquired by Border Holdings, LLC, an affiliate of Argonne Capital Group, today announced the appointment of Ward Whitworth as President of On The Border.

The Melting Pot Targets Houston and El Paso, Texas for Franchise Expansion

Restaurants, Inc. announced today that it is actively seeking franchisees to expand its presence throughout the Lone Star State, naming El Paso and Houston as target markets for future franchise development.

Encore Restaurants Purchases 8 Existing Five Guys Restaurants, Plans to Develop 45 More

Encore Restaurants, LLC, a subsidiary of Dallas-based Encore Enterprises, Inc., has announced the purchase of eight existing Five Guys Burgers and Fries restaurants across central California including Elk Grove, Fresno, Lodi, Natomas, Roseville, Stockton, Tracy, and West Sacramento.

Takeout Orders to Hotels Jumped 125% in Popularity in Last Three Years

For many Americans, hotel room service is considered a travel luxury; however, data from PFK Hospitality Research1 suggests that room service revenues fell 9.5 percent from 2007 to 2012, with some hotels shuttering unprofitable operations altogether.

National Restaurant Association Praises House and Senate Commerce Committee Passage of Travel Promotion Act

Yesterday the National Restaurant Association (NRA) praised the House passage and Senate Commerce Committee markup of the Travel Promotion, Enhancement and Modernization Act of 2014. The bipartisan legislation reauthorizes Brand USA, the nation’s first global marketing campaign, to promote the United States as a destination for international travelers.

CROWD FUNDING

If you are looking for capital to start or grow your restaurant, create the next 501c3, develop and launch the next app for the restaurant industry,or want to help your peers in some meaningful way, we want to know about it.

TED TALKS VIDEO

TED: Ze Frank: Are you human? - Ze Frank (2014)

Have you ever wondered: Am I a human being? Ze Frank suggests a series of simple questions that will determine this. Please relax and follow the prompts. Let's begin …

TED: Heather Barnett: What humans can learn from semi-intelligent slime - Heather Barnett (2014)

Inspired by biological design and self-organizing systems, artist Heather Barnett co-creates with physarum polycephalum, a eukaryotic microorganism that lives in cool, moist areas. What can people learn from the semi-intelligent slime mold? Watch this talk to find out.

TED: Shih Chieh Huang: Sculptures that’d be at home in the deep sea - Shih Chieh Huang (2014)

When he was young, artist Shih Chieh Huang loved taking toys apart and perusing the aisles of night markets in Taiwan for unexpected objects. Today, this TED Fellow creates madcap sculptures that seem to have a life of their own—with eyes that blink, tentacles that unfurl and parts that light up like bioluminescent sea creatures.

TED: Nikolai Begg: A tool to fix one of the most dangerous moments in surgery - Nikolai Begg (2013)

Surgeons are required every day to puncture human skin before procedures — with the risk of damaging what's on the other side. In a fascinating talk, find out how mechanical engineer Nikolai Begg is using physics to update an important medical device, called the trocar, and improve one of the most dangerous moments in many common surgeries.

© 2014   Created by FohBoh.

Badges  |  Report an Issue  |  Terms of Service