Enduring trend or short-term fad? Sector veterans voiced their opinions at the NRA Show Foodservice@Retail Summit about the growth trajectory and permanence of grocerants:
Richard Allardyce, Executive Chef & Senior Director-Merchandising and Commercial Programs – HMR, Sobeys: “It will get stronger. Coming from where I did in the multi-unit foodservice world, I was watching this industry from the other side, seeing our guest counts decline year over year with transactions rising at the retail competitors.
“If we truly want to be a grocerant and a retail foodservice experience, we need the right people in the right roles. Make sure we have prep cooks that prep, line cooks that prepare food, and people that can sell. We need to make sure we’re telling the story, romancing the product – it’s not just a deli salad anymore, but a beautiful roasted beet salad with creamy goat cheese, toasted pecans and glazed maple syrup. Once we articulate that in a much better way, we’ll take more business from restaurant competitors. We have the resources behind us, dollars behind us, amazing quality product, and we’ve got our stores as pantry when we need product….We have it all, so I believe the next evolution will be less full-service, more customization, more fast casual – that’s where we’re going.”
Jeremy Gosch, Executive Vice President of Strategy and Chief Merchandising Officer, Hy-Vee: “It will continue to grow. Everyone wants quick, customized meal solutions, and they don’t have time. That’s where we’ll evolve. But we also run meal solutions in stores that frankly give people the answer they need every day. Trips seem to be increasing, but what they buy seems to be decreasing. They want it to be done for them the way they like it. Digital will play a bigger role – app-based – this is what I need now and move on. That’s where they’ll go long-term. The restaurant is a piece of that. Our foodservice establishment is a solutions-based set – got your restaurant with takeout and pickup, and you also have your foodservice for out to go, something quality and a destination.”
Jim Bressi, Director of Research and Development, Kwik Trip: “Foodservice will keep evolving…. We want to position pieces to solve the ‘what’s for dinner’ question. We’re in the grocery and produce business – and we’ve added a fresh meat program to every one of our stores. It’s about giving people choices – but they’ll still have to go home and cook it. We found that solves of some of that take-home meal type of solution. I love to see some of the innovation [such as] the amazing new Kroger store in Columbus. It’s a lot bigger than a traditional c-store, yet smaller than a grocery store. I think it’s just the right fit with a lot of offerings. It’s probably something we’ll do."
Randy Raymond, Group Director-Strategic Initiatives, Coca-Cola Refreshments: “Foodservice at retail is a long-term trend. Everything is starting to line up. You’ve got macro-consumer trends – Millennials and Centennials don’t see channel distinctions. Combine that with people being time-starved – the average person has 80 minutes a day of free time. How do they spend it? 60% of people don’t know what they’re having for dinner at 4 o’clock in the afternoon. From a channel perspective, it’s playing offense and defense. I as a retailer am building differentiation in the perimeter. I’ll put my brand there. It’s hard to differentiate on Center Store. The way to drive my brand and loyalty is around perimeter with an iconic meals platform.
“The top 3 reasons for choosing where to shop, from a Datassential study, are location, selection and value. They’re still the largest, but are in decline vs. 3-4 years ago. Bakery and deli are growing and becoming bigger contributors to driving store choice.
“The same thing is happening in convenience retail – it is differentiating your brand with an open foodservice program. How do get a shopper to turn – you don’t want to compete on value or gas, you do want to compete on experience - larger formats, better selections, fresh prepared foods, grab and go…Putting your brand through that differentiation is how you’re building loyalty.
“The offense in both channels is restaurants. We looked at the Technomic study – it looked like sales were growing in all channels, even QSR, which was the smallest grower. Look at that from a traffic perspective to get a very different story. This is where most traditional restaurants are getting very concerned. Between grocery and convenience retail in the 8 years since the recession, they’ve lost over 1 billion trips. QSRs have been the ones bleeding.
It’s that incremental trip driver, how it will contribute to my business in the role that meal or foodservice platform will play, so I think we’re in this for the long haul, and it will only get bigger.”