For today’s consumers, deciding on where to source their next meal can be a daunting task, given the seemingly endless possibilities and choices. We are no longer limited by daypart or by having just a few eating establishments. There are even more options for preparing food at home as ingredients are now available through c-stores and subscription services. All these options contend for meal-time dollars depending how much consumers want to spend, how much time they have to eat, and the type of food they’d like to consume, whether it’s something familiar or perhaps trying something new.
Given the growing importance of the foodservice and prepared food sections at supermarkets and other food retailers, the “grocerant” concept provides numerous opportunities for developing appealing, unique, and convenient meal options for shoppers.
Prepared food sales rising
To get an idea of just how eating trends are evolving, look no further than foodservice sales. According to the National Restaurant Association, sales in the restaurant industry—and this includes grocery-store-prepared food—are projected to reach $799 billion in 2017, a 4.3% increase from 2016. A significant percentage of this growth—2.5% and $234 billion—will come from quick-serve restaurants, which really highlights consumer demand for quick and convenient food options.
Retail foodservice has also been growing rapidly. Datassential states that supermarket prepared food departments are the fastest-growing segment of the foodservice industry, with a predicted growth rate of 3.8% in 2017.
The overall eating and shopping habits of today’s consumers reveals some driving forces behind this trend:
Convenience. Many individuals today are juggling busy work schedules, family responsibilities, and personal commitments. Some simply don’t have the time for regularly preparing meals at home.
On-the-go eating and snacking. The lines are now blurred when it comes to dayparts, with a growing number of consumers forgoing the traditional three meals a day model and instead eating whenever they have the urge, making prepared food an ideal choice. Additionally, the rise in snacking as a substitute for full meals creates opportunities for foodservice-prepared food options.
Health and wellness. Traditionally, foodservice has not typically been associated with health-conscious consumers, however, today’s foodservice offerings can be appealing to this group, especially if they focus on certain attributes like protein, functional, and free-from ingredients. In fact, foodservice may be especially attractive as a quick and convenient “fuel-up” option for those who just finished a workout or event.
Experience and exploration. The Experience Economy—whereby retailers focus not just on the products they sell, but the experiences they create in-store for shoppers—plays a part in away-from-home dining options. Many consumers are seeking new cuisine, innovative food concepts, new and exotic flavors and ingredients, and new takes on traditional dishes. They want to explore new culinary experiences.
Complimenting home-cooked meals. In many instances, shoppers are looking to enhance their home-cooked meals with prepared side dishes and desserts.
Millennial consumers. The Boston Consulting Group reported that millennials eat out 3.4 times per week, compared to 2.8 times for non-millennial shoppers. Additionally, according to Packaged Facts, more than one-third order something different each time they visit a restaurant and routinely seek out authentic and local products, as well as concepts like mashups (think cronuts and ramen burgers) and build-your-own bowls.
Aside from the more specific reasons, there’s the obvious: shoppers at times simply would rather just pick up a prepared meal than cook it themselves. And having this option at your retail store makes it a true destination for shoppers.
Enhancing foodservice offerings
As mentioned above, today’s consumers have many options when it comes to buying prepared food. With the changing eating habits of today’s on-the-go, adventurous, and health-conscious consumer, simply offering traditional prepared meal options might not be enough to attract and retain business. Pre-made wrapped sandwiches and soups and salads might be sufficient for a shopper who’s in a hurry and needs to grab something quick, but these items probably won’t be appealing for a shopper who’s made a conscientious effort to visit a supermarket for the purpose of purchasing a prepared meal or has taken time during his or her grocery shopping to explore a store’s foodservice offerings. For those types of shoppers, offering unique, fresh, innovative, and made-to-order products is an ideal way of capturing their attention.
Re-inventing your foodservice offerings need not be a massive undertaking, as stores can utilize existing programs and infrastructure to create appealing and delicious foodservice offerings. For example, a store could enhance its sandwich program by using fresh-baked bread from its in-store bakery, along with made-to-order sandwich selections that represent trendy deli meats, cheeses, vegetables, and dressings. (If available, local varieties of sandwich ingredients will appeal to millennials and other shoppers who prefer and seek out local products.) If your store operates a salad or soup bar, consider mixing it up with new varieties of vegetables, pastas, and soups inspired by trendy flavors and tastes; for example, more protein-packed options such as lentils, beans, and chickpeas; and foods inspired by Hispanic and Asian cuisine.
For retailers looking to expand on their current foodservice program, new department concepts could include:
A breakfast bar, which could offer made-to-order coffee drinks and breakfast sandwiches; artisan toasts, chop bread; products baked in the in-store bakery fresh that morning; and a variety of grab-and-go items.
A pizza kitchen that offers both traditional and unique signature varieties by the slice, made-to-order, and take-and-bake options. Using local ingredients makes your pizza selection even more appealing.
Store-purchased food cooked-to-order for the consumer, such as beef, pork, chicken, or fish. Create a meal program around this concept that includes sides, bread, and other add-ons.
A greater variety of grab-and-go and single-serve prepared food options, including international takes on traditional sandwiches (e.g., banh mi, tortas, paninis), non-meat options (e.g., salads, plant proteins)
An Asian-inspired Pho (pronounced fuh) bar whereby shoppers can create their meals from a variety of meats, vegetables, and noodles.
One eating trend common to several of the above examples is customization, which is particularly appealing to millennials and Generation Z. This includes “bowl” meal options, which enables these shoppers to create customized meals they build themselves, oftentimes driven by their own creative expression. These types of foodservice formats can be a real attraction and alternative to more traditional “order from the board” choices.
Today’s consumers are not only more adventurous when it comes to prepared food, they also want it to reflect their lifestyles, environmental, and social leanings. More thought and feeling factors into purchasing decisions, especially among millennials and Generation Z. Flavors, tastes, and food variety, however, are still the most important factors, so it’s important to balance all attributes of your prepared food offerings.
Current restaurant and grocery trends are applicable to foodservice as well. Here are examples of what today’s consumers are looking for:
Local. Local products and ingredients not only convey freshness, they also align consumers with local growers and producers and community involvement. Consumers are increasingly looking for prepared food made with locally sourced ingredients, whether it’s meats, cheeses, grains, or vegetables.
Transparency. The National Marketing Institute reports that 70% of millennials say transparency and “cause” efforts are factors in their purchasing decisions. And it’s not just the younger generations who feel this way. Many shoppers today are looking for food and ingredients harvested, raised, or sourced in a manner closely aligned to their own belief systems. With this in mind, consider using (and actively promoting) food products and ingredients that adhere to this, such as organic, hormone-free, free-range, cage-free, and GMO-free. Additionally, focus on natural ingredients like real butter or sugar, which no longer have the same stigma in the health-and-wellness sector that they once had, and are now being sought after by more and more consumers.
Flavors and tastes. When it comes to flavor, if it’s spicy, it’s trendy. Asian cuisine like Korean, Vietnamese, and Indian are in, fueled by the multicultural millennials and Gen Z and their desire to experience new culinary experiences. This includes noodle dishes like pho, ramen, udon, Thai Khao Soi, and Curry Laksa.
Consumers are also seeking new sauce flavors, such as: harissa, pistou, mostarda, romesco, and chermoula.
Functional. It’s more than just tastes and flavors for some consumers, who seek positive attributes in their food such as protein, “good carbs,” and ancient grains in breads. Of particular interest are naturally functional foods, like quinoa, chia, buckwheat, and super fruits like blueberries.
Size options. A one-size-fits-all approach is not conducive to most shoppers, who represent a variety of households, from single-person to extended households consisting of several generations. In terms of packaged prepared food, be sure to offer a variety of options, including family size and single-serve. Also, keep in mind the growing importance of snacking occasions, which have completely replaced traditional dayparts for some consumers. Consider offering snacking choices to attract these shoppers to your foodservice areas.
Menu calorie labeling. As more consumers seek out healthy lifestyles, what they consume becomes increasingly important. Identifying nutrition in products so that shoppers can make sound healthful eating decisions can be a big selling point for a store’s prepared offerings.
The importance of marketing
Relatively speaking, foodservice is a fairly new concept for many retailers, which in turn makes it a new concept for many consumers as well. Shoppers who view supermarkets in the traditional sense—i.e., solely as a place to purchase ingredients—may not be aware of a store’s foodservice offerings or reluctant to purchase them. Utilizing a variety of both in-store and external marketing channels can help promote your foodservice options and entice shoppers to give them a try. Foodservice should be viewed in the same light as grocery in general, especially in terms of marketing and promotion. That means utilizing all available channels—social media, web site, in-store signage, traditional advertising—to promote specials, coupons, featured items, reviews, and photos.
Today’s food retailers are no longer viewed as simply a grocery-shopping destination. They’re now a viable alternative to restaurants for exciting and innovative prepared food options. With a little creativity and focus, any-sized retailer can boost their foodservice program and attract both current and prospective shoppers to their stores.