Packaging Innovation Drives Non-Traditional Outlets Food Sales By Steven Johnson Grocerant Guru, at Tacoma, WA based Foodservice Solutions®
Five years from now restaurant chain leaders will understand that packaging advances help create new points of non-traditional food distribution have empowered consumer choice (Grocerant)
46 Million Reasons Restaurants Should be Concerned:
In three years between 2009 and 2012 NPD reported that the grocery/supermarket sector increased sales of prepared meals by 46 Million. That occurred in a short three year period. Chain Drug stores have taken notice and continue testing, fresh prepared food at locations from coast to coast. Five years from now as restaurant chain leaders return to Chicago for the restaurant show they will be focused on Non-traditional fresh food competitive growth.
Restaurant Customer Migration Expanding
Five years from now chain restaurant leaders will be attending the National Restaurant Show in Chicago networking, learning and laughing aloud about the money they wasted sending employees to Fast Casual Summits. Laughing aloud about how a multi-billion dollar restaurant industry missed the Consumer Marketing Migration that took place from 1999 to 2013.
Coddling Brand Protectionism
Five years from now chain restaurant leaders will wonder how Mintel, NPD and Technomic reported on but missed the Consumer Marketing Migration. Five years from now chain restaurant leaders will laugh at the fact that the undercurrents of the evolving face of retail food competition has been all around yet while they practiced brand protectionism, drug stores, C-stores and grocery stores simply catered to the evolving consumer preferences garnering share of stomach and did so within in the ready-2-eat and heat-N-eat fresh prepared food grocerant niche .
Five years from now chain restaurant leaders will wonder why when in 2013 Technomic reported that revenue from prepared foods at supermarkets had increased more than six percent annually during the past five years. Why they continued to host, speak and pontificate on Fast Casual when the consumer had migrated. More important T echnomic reported that the prepared food number grows to 13 percent for mass merchandisers and superstores during the same period. All the while the margins on prepared food were expanding creating a fast growing new revenue center for fresh prepared food in this non-traditional fresh prepared food retail sector.
Looking Outside Current Boundaries
Five years from now all food retailers will evaluate how they do business not how they did business. Five years from now chain restaurant leaders will be laughing how they missed the universal commonalties the drug store, grocery and c-store food marketers did not. Five years from now they will understand that successful competition comes from outside well established operating boundaries.
Five years from now no one will wonder about the findings in a Harris Poll of 2,496 adults surveyed online between February 13 and 18, 2013 by Harris Interactive found that Americans continue to be reducing how often that they eat out at restaurants : Fast food restaurant chain (26% less, 14% more),Local casual dining restaurant (20% less, 14% more),Casual dining restaurant chain (24% less, 11% more),Local fine dining restaurant (21% less, 7% more),Fine dining restaurant chain (23% less, 4% more).
Five years from now all food marketers will understand that channel blurring exist only in the minds-eye of legacy food marketers not in the minds-eye of consumers.
Five years from now Food retailers will understand the 65 Inch HDTV Syndrome Foodservice Solutions® Grocerant Guru Steven Johnson found: 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.)
Future Trends Point to an Increase in Non-Traditional Meal Occasions
Five years from now restaurant chain leaders will understand that packaging advances help create new points of non-traditional food distribution have empowered consumer choice
Trends in the Food Industry Point to an Increase in Non-Traditional Meal Occasions
Five years from now at the intersection of the consumer, fresh prepared food and technology they will have found 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. That one in 10 shoppers choose higher-end cuts of meat in order to recreate a restaurant dining experience (FMI, 2013).
Packaging Advances Extended Acceptance
Five years from now restaurant chain leaders will understand that packaging advances help create new points of non-traditional food distribution have empowered consumer choice, and American embraced 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 destination for 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 i s restaurant quality and priced less than Panera Bread or Corner Bakery CAFE. BothPanera 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 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 operator, consultant and brand/product positioning. Since 1991 Foodservice Solutions® of Tacoma, WA has been the global leader in the Grocerant niche for more on Steven A. Johnson and Foodservice Solutions® visit http://www.linkedin.com/in/grocerant or twitter.com/grocerant
We’ve all probably had the experience where we ordered at a fast food place when the place was dead and returned to our table with luke-warm food. Most luke-warm food is within the health code, but that doesn’t mean that I don’t stand at the register and watch how close the timer is to zero. If I wanted cold food, I’d be eating ice cream.
Not that the timer tells me much. Current and former fast food employees know that the countdown lies at times. We know that employees lazed into not caring about health codes and belligerent that they have to work in such mind numbing environments at times restart the timer without switching out the food leaving the unsuspecting customer with food that the health code prohibits the company from selling. It’s not the companies fault—not really.
Individual Items Produced Relatively Fast
I’ve worked fast food. I know how long it takes to cook the food. The fries, the hamburgers, and the chicken nuggets can all be cooked in less than five minutes. The chicken sandwiches and the baked potatoes take a little longer, but most of the items can be made for the individual pretty fast.
I tend to be of the opinion that I want quality food and am willing to wait for it. Five minutes seems a fair trade for food just off the burner or out of the oil. Five minutes seems like a fair trade for food that isn’t limp and cold.
Then I remember the times when I zoomed through the drive-through on the way to work or school. Or those times when I stopped in briefly for my half hour lunch break. At those times you can’t afford to wait five minutes let alone the half an hour that you would have to wait for your food if fast food wasn’t fast.
You have to consider that the speed that fresh food would be delivered to your table would be relative to the number of people currently ordering meals at the restaurant. If you come during the busy lunch hour you could end up waiting as long as you would at a restaurant for your food. Let’s face it while fresh fast food can be good, it’s not so good that we’d be willing to wait a half an hour to eat.
Current Set Up Impossible
The change from fast to slow would force the stores to revamp their kitchens. The hamburgers would be easy to make as the orders come in. Other items would be trickier to cook when the place is busy due to the current kitchen set-ups of many fast food establishments.
The main problem would be deep-fried food. The hash browns, the fries, and the chicken products. Currently fast food places tend to have a deep fryer with two sections. Each section contains 1 or 2 medium sized deep fryer baskets. Current fast food protocol has deep fried food cooked in bulk, and then stored under heat lamps or insulated drawers. When the product is needed or past their serve time, drawers are emptied and new product takes its place.
If the protocol changes from bulk cooking the current set up would be insufficient. The employee would not be able to drop a spicy chicken into a container that already holds spicy chicken because there would be no way to tell if the chicken you fish out is the fully cooked or partly cooked spicy chicken. The whole affair would be a lawsuit waiting to happen, so if you ordered a spicy chicken, you would need to wait while the fries, chicken nuggets, fish fillet, and chicken sandwich is made for the people ahead of you before they could even begin cooking your food. At the busiest time of day there could be ten to twenty different items that need to be deep fried in different containers. More basket and deep fryers would be needed to serve all the people who would order in a timely fashion.
The Customer is Always Right
Where does that leave those of us who want fresh food, but aren’t willing to implement the change that could mean waiting a half an hour or longer for mediocre food? Well you have three options at this point.
- Accept the current status quo and hope that the item is relatively hot. If the food is too cold, complain and get fresh food.
- Order specialized items if you suspect that the food is prepared beforehand. Tell the cashier you don’t want ketchup on that hamburger or salt on those fries. This will assure that your food is fresh.
- Request hot and fresh food. This might annoy them, but they can’t tell you no. As the customer you are right and they are wrong. You’ll have to be willing to wait a few minutes for the fresh food.
Fast food is fast because we want it to be. We might believe that the whole arrangement is crazy, wasteful, and sometimes unpalatable, but that is the price we all must pay for food that arrives at our tables mere minutes after we order. At this point your best bet would be to navigate within the system.
Carrie Stark has grown up eating veges grown in America’s most fertile mid-west soils and doesn’t plan on stopping anytime soon. She currently explores her passion for food by cooking and writing about food with the people at www.sunshinesweetcorn.com.Read More
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In his Feb. 12 State of the Union address, President Obama suggested the federal rate move from $7.25 per hour to $9 per hour. The federal minimum wage was raised to $7.25 in 2009, while the federal tipped minimum wage for servers has remained at $2.13 since 1991. Currently, 19 states have their minimum wages set at both federal levels, while the remaining 31 states and District of Columbia are a patchwork of their own minimum rates, including 10 states that tie their minimum wages to inflation, as the president has proposed for the federal rates.
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