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Foodservice Solutions® Steven Johnson - Grocerant Guru®
SJU Food Summit 2015“Fresh” Thinking in Food MarketingOctober 13, 2015
Food Quality Never Takes a Step Backward
Exploring expanding points of fresh food competition and opportunities.
Consumers Like Eating-Out when Eating-In
Grocerant Guru™
Steven JohnsonGrocerant Guru™Foodservice Solutions®Tacoma, WA
253.759.7869www.FoodserviceSolutions.us
THE GROCERANT NICHE
Fresh Prepared Ready-2-Eat Heat-N-Eat
“ITS ABOUT TIME”Thinking About your Customers
Differently ©Foodservice Solutions®
Executive Insights
Value Retailers continue to garner market share (Fresh Format & Dollar stores winning)Grocery consolidation & trip erosion continueRite Aide, CVS, Walgreens customer expansion grabbing “quick” tripsRestaurants sales of Take-Away continues to riseStart-up’s from Meal-Kit’s to Delivery companies are well funded.
Executive Insights
Time is the true commodityCustomer outcomes are more important than productsFresh food fast is the only
difference between profitable differentiation & commodity competition
Price = Transparency
A Danish Philosopher
“Life can only be understood backwards; but it must be lived forwards.”
- Soren Kierkegaard
Battle for Share of Stomach
GrocerantGuru.com
Points of Distribution
Sources: Nielsen, NRA, Progressive Grocer Annual Reports (various years)
Forced Fresh Looking Differently
Sources: Bureau of Labor Statistics, SNAP
Chain Restaurant YOY Customer Counts
Sources: Company SEC 10Ks, Piper Jeffray Cookbook, Pacific Management Consulting Group
Restaurant Off Premise
Source: Pacific Management Consulting Group / Foodservice Solutions®
US Retail Sales Dollars
Buying More Grocerant vs. Fast Food
Source: Technomic, 2015
Buying more Grocerant Ready-2-Eat andHeat-N-Eat than last year
Why More Grocerant
Why are you purchasing food service items at retailers more often?
(select all that apply)
Sources: Technomic, 2015
Fresh First Traditional Supermarket last
Projected percent change in store count, 2013 – 2018 (projected)
Sources: Willard Bishop
Grocery Discontinuity
Sources: Willard Bishop
Projected change in market share, 2013-2018(select all that apply)
Looking Ahead
Is Amazon providing instant gratification vs. your impulse buy?
Amazon Marketing Power
“Time is the true commodity and only Amazon really gets that”
Source: Lee Peterson, EVP Brand Strategy and Design WD Partners
All Food Products are CommoditiesPrice, Value, Service, Equilibrium is resetting
Source: Foodservice Solutions®
Amazon Prime, a yearly subscription service with 50 million consumers
Source: WSJ, WD Partners
It’s About Time
1940: Home Cooked 150 Minutes2000: Average time spent inside McDonalds was 11 minutesToday: Home Cooked Meal In Less than30 Minutes74% of All QSR meals Drive-Thru1 in 3 men spend 15 min or less a day on food prep
Source: National Restaurant Association, Foodinsights.org
How much time to Consumer take to prepared Dinner each night?
It’s About Time
Source: How America Eats – The Hartman Group
It’s About Time
EVERYDAYAt Noon 83.7% Do not know what’s for Dinner
At 4:00 PM 68.7% Still Don’t know What’s For Dinner?Source: Foodservice Solutions / Walgreens
Michael Porter
“Industry boundaries are expanding, and they can
expand even more. We’re going to see a combination of
barriers to entry going up and the opportunity for
disruption going up simultaneously.”
Source: Michael Porter. FoodInsights.org, 2015
Looking Ahead
50% of Americans Over the Age of 18 are Single
Nearly 50% of all eating occasions
are alone
Only 31% of dinners were made from scratch
Six in 10 dinners were planned within an hour of eating
Source: US Census, Hartman Group
Price Matters
“Poor people must save, rich people
like to” ALDI believes that they are
purveying a universally exportable price message to the world
Source: WSJ. FoodInsights.org, 2015
Price Matters But How Much?
The average cost of a restaurant meal per person in 2014 was $6.96; the estimated average cost for an in-home prepared meal was $2.31
All the while the U.S. Census Bureau announced foodservice spending exceed grocery spending for the first time ever. Note: It did not include spending at ‘big box club stores’
Taste came in first but Price came in second at 68% in a 2015 IFIC poll. Quick service restaurants represent 78% of total restaurant industry traffic.
Source: The NPD Group, IFIC, US Census Data
Don’t Be Static... Evolve.
Consumers are Dynamic not Static.
Brands must be as well.
Pizza Hut
Opened first store in 1958 by 1966 Pizza Hut had 145 restaurants serving pizza, lasagna, salads, all walk in sit down table service dining. Source: Pizza Hut 2015
Pizza Hut
By 1968 Pizza Hut had 301 units open. 500 units open by 1970 and 1,000 open by 1971 and Pizza Hut was the largest Pizza Chain in the world. All walk in restaurants with table service.
Source: Pizza Hut 2015
Pizza Hut
By 1973 Pizza Hut had 2000 restaurants open. In 1977 they had 3,000 restaurants open and things were changing.
Pan Pizza was introduced.
Source: Pizza Hut 2015
Pizza Hut Time for Change
In 1983 boundaries were coming down. Pizza Hut was expanding this time introducing delivery but in Australia. Source: Pizza Hut, 2015
Pizza Hut Kept Moving
By 1986 Pizza Hut had 5000 units with the conversion to delivery only drove sales and profits, reduced time and cost to open new units and in 1988 6,000 units. Source: Pizza Hut, 2015
Pizza Hut
Today 15,000 units with less than 50 full service sit down restaurants in the world. Source: Pizza Hut, 2015
Yum Brands
Out-Sourced: Amazon Why Not?
Evolving Pizza
Americans spend 37 billion a year on pizzaHouseholds eating frozen pizza dropped between 2010 - 2014, and the percentage of households that ate a lot of frozen pizza dropped 15%
About 1 in 8 Americans eats pizza any given
day
Pre-teens eat about two times the national average
60 years old eat about half the national average
More than ¼ boys between 6 and 19 eat pizza every day
Girls between 6 and 19 eat more pizza than any category of guys
Source: USDA, Packaged Facts
Things You Might Not Know
The number one new food product launch in 2014 was Lunchables (Ready-2-Eat), Uploaded with 87% distribution and $143 Million in Sales.
Fully 21% of Starbucks transactions in stores are done by Phone.Source: 2015 Fare Conference, Starbucks Q3 2015
SNAP Status Quo
ONE QUESTION:Compelled to buy to Want to Buy?
SNAP average transaction is $23
75% of SNAP participants have to spend their own money to buy food
In 2005 , 25,628 participants in SNAP vs 46,537 in 2014
The SNAP shopper is moving from paper coupons to digital and online
Source: USDA, IRI 2015 Summit
Price, Value, Service Equilibrium
Consumers are resetting the Price, Value, Service Equilibrium. Here is Foodservice Solutions® formula:
(Mobile Access + Digital Payment +Delivery) X (Price + Food Quality + Speed) = Value
Incremental Value:
Constantly Changing Menu (Seasonally / Sustainability with Creditability).
Source: Foodservice Solutions®, 2014
Attribute
Outlet
#1216
ParkingLot Food
VisualAppeal
SmellOderAroma
CustomersLikeMe
Temperature
Taste
RestaurantsQSR, FC, C, FS, Fine
178 8.5% 7.1% 9.1% 9.5% 9.6%
C-Stores7-Eleven, Sheetz, QC, Wawa, Rutter’s etc.
369 7.8% 6.2% 8.8% 7.4% 9.5%
GroceryWal-Mart, Publix, Aldi WinCo, Safeway, Whole Foods etc.
550 4.7% 5.1% 6.2% 7.5% 6.1%
Drug & LiquorPinkies, Duane Reade,Rite-Aid, Walgreens etc.
48 6.8% 8.2% 8.4% 8.5% 8.8%
Non-TraditionalNordstrom’s, Food Trucks, Hello Fresh etc.
71 NA NA NA 9.6% 9.7%
Grocerant Scorecard
Grocerant Scorecard
Attribute
Outlet
#1216
Price Delivery
Catering DigitalPayment
In StorePOP
RestaurantsQSR, FC, C, FS, Fine 178 7.4% 9.4% 7.6% NA 9.5%
C-Stores7-Eleven, Sheetz, QC, Wawa, Rutter’s etc.
369 8.9% 5.4% 3.8% NA 7.9%
GroceryWal-Mart, Publix, Aldi WinCo, Safeway, Whole Foods etc.
550 6.4% 6.5% 4.4% NA 1.1%
Drug & LiquorPinkies, Duane Reade,Rite-Aid, Walgreens etc.
48 9.0% 9.1% 6.64% NA 3.5%
Non-TraditionalNordstrom’s, Food Trucks, Hello Fresh etc.
71 NA 9.6% 2.7% NA 2.1%
Grocerant Scorecard
Attribute
Outlet
#1216
DigitalMenu’s Staff
WellGroomed
SpeedatBreakfast
SpeedatLunch
SpeedAtDinner
RestaurantsQSR, FC, C, FS, Fine 178 8.5% 7.1% 9.1% 9.5% 9.6%
C-Stores7-Eleven, Sheetz, QC, Wawa, Rutter’s etc.
369 7.8% 6.2% 8.8% 7.4% 9.5%
GroceryWal-Mart, Publix, Aldi WinCo, Safeway, Whole Foods etc.
550 4.7% 5.1% 6.2% 7.5% 6.1%
Drug & LiquorPinkies, Duane Reade,Rite-Aid, Walgreens etc.
48 6.8% 8.2% 8.4% 8.5% 8.8%
Non-TraditionalNordstrom’s, Food Trucks, Hello Fresh etc.
71 NA NA NA 9.6% 9.7%
Positioning Choice
Retailers have 4 options:Fresher, Better,Cheaper, or Not Around Much Longer.
Source: Foodservice Solutions®
Portability Success Leaders
The Face of Fresh
Source: Willard Bishop, Technomic
Funding Food
In 2014 $2.36 billion was raised to fund 264 Food Start-Up’s.
Hello Fresh IPO Priced at $2.9 BillionPlated, Munchery, FoodPanda, Lish, Peachd, SpoonRocket, Eat24, GrubHub, PostmatesSource: Venture Capital Form, Food + Tech Connect
Eatzi’s – Niche Pioneer
Rutter’s – Steps to SuccessMIX & MATCH LUNCH & DINNER
Pantry Busters
Source: NACS
SQUARE ONE MARKETS
SIX ’O’ CLOCKSCRAMBLE
Whole Foods Is Fresh Food
Safeway
Walgreens Café W Plus
Walgreens Fresh & Fast
Summary
Consumers take advantage of options
Grocery channel shopping frequency continues to decline
Value retailers posting penetration & frequency gains
Everyone purchases in multiple channels
Consumer trends can drive growth
Summary
RETAILERSCompetition is going after your shoppers & their shopping tripsInvest dollars to re-invent yourselves!
Grocerant Fresh Format is on top of key consumer trends
MANUFACTURERS
Capitalize on channel shopping retailer diversity through expanded distribution
If you don’t, a competitor will!
Summary
Price = Transparency Time is the True CommodityCustomer Outcomes are more Important than ProductsFresh Food Fast is the Difference Between Profitable Differentiation & Commodity Competition
Grocerant Guru™
Steven JohnsonGrocerant Guru™Foodservice Solutions®Tacoma, WA
253.759.7869www.FoodserviceSolutions.us
THE GROCERANT NICHE
Fresh PreparedReady-2-Eat Heat-N-Eat
“ITS ABOUT TIME”