Foodservice: Fast Forward

It’s no secret that lifestyle changes have led to big changes in the way people eat. The new consumer mantra of “faster, better, cheaper, more convenient” has led to the addition of healthier options at quick-serve restaurants, new levels of carry-out, and the proliferation of enhanced foodservice departments in retail food operations. All are indicative of new marketing strategies being launched.

There is a concurrent effort on the part of many foodservice operators, retailers, and restaurateurs alike, to advance their commitment to fresh, natural foods, as a means to create and develop a competitive edge. Look no further than the addition of natural and organic foods in conventional supermarkets, or the increased marketing efforts of restaurants and chefs to connect with green consumers, to see how the strategy is exploding.

Find a niche: this was one of the primary messages at the March 2005 IGA Global Summit, in response to the increased grocery market share of superstores. For many, foodservice will be that niche. The grocery industry has identified in-store foodservice as a primary avenue to distinguish individual stores, through quality or convenience, from competitors. Some mid-level retailers, recognizing the futility of a price war strategy with the likes of Wal-Mart, Costco, or Super Target, are looking to position themselves in the higher margin specialty foods arena by adding natural, gourmet, and organic foods to their mix, including upgrades to their foodservice venues. It is an image make-or-break department.

What the future holds

One thing is clear. The playing field for the in-store foodservice experience is changing; the needs, eating habits, and expectations of consumers are shifting; and new and bigger players are devoting more dollars to foodservice and actively pursuing both your staff and customers.

As longtime purveyors of fresh, healthy, prepared foods, co-ops must anticipate that competition for our customers will grow. The quality and availability of healthy, ready-to-eat foods will improve as more chefs, restaurateurs, and retailers become involved with natural foods, making it easier to lose our core constituency.

This influx of dollars and resources from chains and independents means competition is bound to ramp up for all. You may no longer be the only or best source for high-quality, ready-to-eat food. How your foodservice program is perceived is directly related to the other foodservice and shopping experiences people have or desire.

Here is my view of the retail foodservice department of the future:
The department will be prominent toward the front of the store, for both convenience and to raise the image and profile of the “fresh” commitment. This can be either near the entrance (to facilitate customers not having to negotiate the entire store for a quick meal solution, especially in high-traffic locations) or at the end of the racetrack (so fresh, ready-to-consume food is the last thing in the basket). An industry shift toward commissary-driven food production means the department is no longer necessarily tied to the kitchen placement or perimeter. Island venues will become more common.

Stores will have seating opportunities on-site to help create convenience and foster a sense of community, and these areas will include amenities to enhance the experience. Higher-end stores will continue to experiment with actual restaurants, cafés and cooking classrooms attached to their foodservice venues.

Foodservice teams will look more like food professionals and less like regular store staff. Visually, this implies both a higher level of pride and a commitment to food handling and sanitation. Future strategies will alleviate customer fears around food safety concerns while enhancing professional image. Look for public display of health department scores and for food safety training certificates to be featured prominently.

The department will engage customers through theatre. The NCGA/Hartman report refers to the desire for a “sensory” shopping experience as enjoyable by mid-level consumers, a group to whom many companies are marketing. Foodservice is one area where operators can provide theatre with a “value added” benefit (flavor, aroma, ethnicity, exclusivity, service). In creating an engaging foodservice department, tactics to create theatre include noise, smells, activity, moving fixtures, video, and of course, staff.

What will grocers do to create theatre in foodservice? There are open kitchens, with ovens and rotisseries in public view, racks of fresh cooked foods rolling across the floor, chopping and cleaning produce, the sizzle of cooking, packing and labeling and active sampling. There can be popcorn popping, doughnuts frying, nuts roasting, milk steaming, juicers and blenders whirring, coffee brewing, bread slicing, and retail floor banter. There are front-facing made-to-order stations, cheese cutting, cake decorating, sushi rolling, and bread baking. Staff in uniform contribute excitement to the team and will help the public identify the stars of the foodservice stage. Specific foodservice stations, enhanced with props, will help set the stage for the show.

With many retailers removing food production from their in-store programs and moving toward centralized production, in-house kitchens will prove to be a viable point of pride, theatre, and distinction. Some operators will try to use the smoke and mirrors of theatre to disguise the fact that they don’t actually make their food.

The most successful departments will include both full-service and self-service aspects. Self-service salad and food bars help create speed of service while reducing dependence on staffing, and they also add the theatre of food, sampling, and packaging.

There will be some interface with staff, primarily focused on the made-to-order and more expensive items, to help foster the store’s reputation for knowledge, integrity, and service. Eliminating service completely with exclusive grab-and-go formats, while creating some efficiencies, reduces the opportunity for distinction in areas other than convenience. The availability of qualified job applicants and the time concerns of consumers in individual markets will help determine what percentage of the foodservice department is self-service.

Speed of service, in all venues, will be critical. Foodservice departments are enhanced by appropriate staffing, clear overhead venue signage, simple ordering processes, quick payment options (including deli cash registers or self-checkout or express lanes), and nearby seating.

Recipe choices providing meal solutions will become a focal point of the store and marketing. The inclusion of fully cooked, ready-to-eat prepared foods will work to distinguish the store from competitors. A great prepared foods department will augment oven-ready programs in the meat and seafood departments (another strong growth area). Healthy options that are child friendly, not simply family-size portions of grown-up food, will be included in the prepared foods mix.

As the eating experience comes to include an expectation of adventure, descriptions of items and dishes will play a prominent role. Whether it is an introduction to new items, a romantic notion to distinguish a product (local, imported, artisan made), or menu-style recipe descriptions, food facts and ingredient listings will become part of everyone’s culinary landscape. Identifying sources of ingredients, such as specific areas or farmers, will be commonplace.

An aging population will also bring greater recognition of health benefits relating to food and diet. The manufacturing segment of foodservice is rushing to create new, value-added nutritional aspects to recipe choices. Savvy operators, recognizing that flavor is often the missing ingredient in premade and frozen foods, will look to marry the taste and convenience of fresh with nutritional enhancements.

Take the time to acknowledge initiatives happening industry-wide, and use that information to help define your fresh-foods operation. Things you may not notice, or things you may disagree with, are busy at work influencing consumers. Raise the bar when it is to your advantage. Exceeding customer expectations or competitor standards is a winning strategy.

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Chris Ryding is perishables program manager for the National Cooperative Grocers Association (chris.ryding@ncga.coop).