Tuesday, January 19, 2010

Can selling restaurant products in grocery stores create channel blurring?


Should restaurants sell proprietary products in grocery stores, supermarkets and convenience stores? Outstanding foodservice companies rely heavily on research from industry knowledge experts like Technomic, Nielsen and The Hartman Group. Each understands the consumer, the food niche and to some extent branding. Having spent all of my career in the foodservice niche, never have I seen a study that says there is any channel blurring! All studies on the contrary see more advantages than disadvantages to selling multi-channels.

The questions should center around how to best bridge the challenge of established customer deferred buying. If the consumer is in a different channel of foodservice, then should your brand be available as an option? This includes retailers that are selling grocerant ready-to-eat and ready-to-heat prepared, portable foods.

Ron Ward calls this the “brand experience gap”, that is to say the gap in time between visiting their restaurants and enjoying a great meal within the four walls. I say yes, chains need to strongly consider entering new food channels with branded product. This is a growing trend not only here but on an international level.

Companies around the world are having success while extending their brand. Here is one example from outside the US. “http://www.nandos.com and check out their 'Grocery range. This highly successful restaurant business is the fastest growing fast, casual restaurant group(outside USA) in the world. They have focused their grocery product on long life sauces. This is working very well for them. Bridging the challenge of deferred buying” by established customers.

When your visit nandos.com please click on the books, the one on the shelf, the pots, pans even the window. Page per page this company understand the consumer, the need food focused interactivity and consumer participation. Restaurant brands today need messaging to be vertically integrated in the unit, in service, in menu, on the website and channels.

Understanding ready-to-eat and ready-to-heat prepared, portable better for you food niche is just what we do. Need a grocerant program review or state of the industry assessment? 

www.FoodserviceSolutions.us of Tacoma, WA is the global leader in the Grocerant niche providing Ready-2-Eat and Heat-N-Eat program assessments aka Grocerant Niche assessments. 1-253-759-7869 or linkedin.com/in/grocerant or leave a comment below.

8 comments:

  1. Still don't understand why KFC has not put chicken wings in the Frozen Food Section of the Grocery Store.

    ReplyDelete
  2. What a great post!

    Blurring is a phenomenon that is greatly talked about in Europe nowadays, but yet we don't see it so often to concretize in the food retail business.

    For example food service expert Enrique Figee has talked this into the pieces. This is not an ad, but from his website you can download a study "Fight Less - gain More", which iS ALL about blurring! I strongly recoomend that to read for all the food supply experts.

    About blurring in brief from that:

    "To benefit from this growing market it helps to be proactive by building alliances and by
    continuously innovating. Otherwise players will have serious problems. Despite the fact
    that consumer expenditures increase, the margins in the European Foodservice market will
    decline. This will be caused by increased competition, more concentration of the players
    in the market, the blurring with Food-retail and the ever more demanding consumers.
    Therefore, besides being proactive to add value, cost management will also be key.

    Manufacturers should stop thinking in channels where their marketing investments are
    concerned and should start thinking in consumer needs across all channels, Food-retail
    included. In the end they will have to come up with concepts that are real solutions for
    consumer needs in certain outlets and moments on the Foodservice market next to their
    offerings in retail, instead of offering products in Foodservice that are just variations of their retail products.

    Wholesalers/distributors have to make a choice what they want to be, as their buying role
    will decrease more and more.
    Strong formula brands will dominate the Foodservice market. Power play of these outlet
    organisations can be expected.

    ReplyDelete
  3. From here:

    http://www.foodreflection.com/

    (publications)

    ReplyDelete
  4. KFC won't put wings in grocery because they don't have to. Restaurants worry they will cannibalize sales that way (franchisee-owned companies won't and sometimes, like Applebee's, can't do it as part of their franchise licenses).

    It's about share of stomach, not market share. The smart brands get it.

    ReplyDelete
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