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Retail Food Consumers Shop Around

Today the line between food trucks, fast food,  grocery stores, convenience stores, dollar 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.

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?

The restaurant industry is not an industry known for trying to be first, as in fastest to market, with an ideation, food, or technological advance. In the United States, the larger the chain, in almost all cases the slower they are to adopt something compared to a smaller chain or independent restaurants. A 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 dismissed start-up competitors as nonrelevant. The pizza sector is a great example: evolving from family dining independents to national chain of "Red Roof" Italian, then to delivery-only outlets, and now take-n-bake is garnering market share. ( Note: Home Made Pizza Company and Papa Murphy's are further examples of take and bake pizza operators.)

Increase in Drugstore and Dollar Store Meal Occasions

food fastIt is at the intersection of the consumer, fresh prepared food, and technology that we find the consumer path to purchase behavior evolving.  Consumer adoption and migration within the Ready-2-Eat and Heat-N-Eat space 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 components faster than most legacy retailers ever could have imagined. There is a set of new consumer demographics along with the new uncertain economy that are 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 and kids 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 nontraditional 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. Nontraditional 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 importantly, each is leading with innovative products and package sizes that create value and have positioned each chain as a food shopping destination for meal components customized and personalized for immediate consumption or mixed and matched for a meal at home. In short, they are stealing your customers.

Consumers 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 nontraditional outlets will capture profit 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, stifling 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 four walls.

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