September 19, 2017
A wave of options are now available for restaurant meal delivery like Grubhub, Postmates and Uber Eats but can American consumers afford to pay $12-$15 for the convenience? For those who purchase meal kit delivery from Blue Apron or groceries from Instacart, the time is still a concern as they prepare, cook and serve a meal to their family, and don’t forget the cleanup afterwards. Today’s customer isn’t just looking for affordable restaurant quality, they are looking for simplicity. For consumers willing to take the time to pick up their takeout meals, there is a new service available that may shift their behavior from delivery to self-serve pickup.
A new platform from startup MealPal creates a subscription service that allows users to subscribe to a list of restaurants for takeout lunches or dinners. The service will be available in the US, UK, Canada and Australia. The fixed fee will fall around $7 for dinner and $6 for lunch providing a selection of restaurant entrees available for pickup. This model allows the participating restaurant to choose a signature meal that they can plan for demand and which better insures quality execution. The restaurant can build a margin on the higher volume item and still make money on the transaction.
Although many consumers are comfortable with delivery fees, the broader lower and middle income consumer will find this service more affordable and accessible. Within the urban markets, younger consumers will find this a high-value that allows Millennials and older GenZ the opportunity to purchase restaurant quality meals more frequently. Older Boomers that are retiring will have options to purchase meals within their budgets and enjoy their lifestyle.
After receiving $20 million in funding, MealPal is in a strong position to leverage their platform because according to the company, they are making a margin on each order today. Leveraging technology toward future profits has been the strategy of many startups but showing profitability this early on will drive chances of success long into the future.
As consumer behaviors evolve and trends change, restaurants offerings have become very complex. A focused meal option with MealPal can be easier for restaurants to execute and consumers to keep it simple.
September 13, 2017
Chocolate, a craveable comfort food has seen declines in consumer demand over the recent years. So much that big chocolate companies have been forced to reduce staff and focus on greater innovation and solutions. How do you make chocolate better?
Several trends are impacting the chocolate industry, driven by younger Millennial and GenZ consumers aged 12 to 40:
- Premiumization is driving specialty products that are higher priced and promise better quality
- Natural and real ingredients are in demand requiring the elimination of artificial flavor and colors
- Fair trade practices are expected from younger consumers for suppliers to pay fair wages
- Spicy and Savory flavor trends are driving chili pepper, bacon and sea salt ingredient combinations
- Health and Wellness concerns are pushing manufacturers to reduce sugar and sodium content
The cost of cocoa beans have been rising and consumers are very price sensitive to paying more for their chocolate which is squeezing margins and lowering demand especially in Europe.
A recent discovery by Barry Callebaut, the first in 80 years gives us Ruby, naturally pink chocolate. Pink chocolate isn’t new but what is new is that it has been manufactured without using artificial coloring. Made from the ruby cocoa bean, the processing provides natural pink coloring through the use of the ruby bean. This new innovation offers a berry flavor that is unique, offering a less bitter, sour flavor that combines with the sweetness of chocolate.
Subject to FDA approval, the Ruby Pink Chocolate is sure to be a hit on Valentine’s Day but more importantly, it should be a hit with millennial consumers. Known for gravitating to “what’s new and what’s next”, this new chocolate likely will be considered a generation-defining product that is different from “what their parents eat”. The buzz alone from this innovation will provide ample reason to sample the new product. Chocolate is still considered one of the world’s affordable indulgences and we should expect to see innovations like Ruby Chocolate Martini’s, Pink Hot Chocolate, Cake Pops Hot Lava Cakes.
September 12, 2017
With the oversupply of restaurants driving tough competition in the foodservice market, supermarket brand Kroger Co. looks to add to the supply by expanding their strategy to include restaurants. Kroger aims to expand to a 360 degree focus in an effort to increase share of stomach and consumer wallet.
According to Technomic, supermarket foodservice is expected to grow 6.5 percent in 2017, outperforming lackluster restaurant industry growth. Strong competition from meal delivery brands like Blue Apron and HelloFresh are putting pressure on the supermarket chains with meals delivered to the consumer’s doorstep. With the threat of AmazonFresh grocery delivery, food retailers have to find new ways to keep customers coming through their doors.
Kitchen 1883, named to include the year Kroger Co. was founded, will give Ohio-based Kroger a way to utilize some of their existing square footage to maximize sales per square foot. With so much competition from big-box stores and warehouse clubs like Target and Costco, the traditional supermarket “center-of-the-store” has seen tough times as consumers find greater value in stocking up elsewhere. Whole Foods has found success with their 365 Everyday Value products and has found good traction with their foodservice offerings. Expanding from retail food to foodservice is a natural migration but requires some very specialized focus and differentiation in the approach.
Often, retailers underestimate the effort needed to shift into prepared foods and restaurant operations. Success requires hiring and training experienced foodservice professionals. Cross training cashiers and stock handlers very often creates a poor environment. It’s necessary to create a separate strategy, utilizing dedicated staff who with food handling, food safety experience. Building a menu that resonates with value and targets the appealing menu items that taste great can also be a difficult task for even the most experienced restaurant operators. Lastly, creating an environment that is clean and comfortable for patrons can make or break a concept as the customer experience has to lead to return visits and frequency.
For Kroger to succeed, the Kitchen 1883 will have to facilitate existing customer trial and maximize the convenience factor for shoppers. There will be strong opportunities for quick breakfast and lunch occasions, snacking and beverage stops and takeout opportunities for dinner. Poor service can tarnish the brand, but good service can lead to increasing their share and trying to give customers another reason to shop Kroger more frequently.