by Lionel Binnie
“What do you want to do about dinner?” “Mmm…not sure, what do you want?”
A likely conversation, between one spouse, partner, or family member, to another, around 4 or 5pm, several days a week.
And, increasingly the answer is to pick up for home consumption or order out. We’ve been Amazoned in how we think about this whole process. Meaning we want to fully streamline and de-friction this major part of life.
Many of us want to improve the parts of life that involve thinking about, sourcing, buying, storing and preparing food. And not just any food. We also aspire to better-for-you food. Not to mention trying new things. And we love to avoid cleaning up after.
According to the Specialty Food Magazine, 67 percent of U.S. households are singles or couples, i.e. No kids. And even in households with children there are often people on different diets; low carb, vegan, etc. The traditional, plan ahead, weekly shopping, everyone eats the same home-cooked meal at the same time, concept is increasingly not how things work. Hopefully, there are exceptions to this…where we all actually do sit down together…
Based on my recent research, here is an update on how some aspects of this are developing. And some thoughts about how all this may develop in the future.
Grubhub is still on a tear, and growing fast with 14M users, accessing 80,000 restaurants in the U.S. It could arguably be called Amazon for restaurants and is certainly interested in that level of aggregation and collecting invaluable user data. Pretty soon they’ll be able to tell you the most popular take-out dish in your zip code! This platform and others like it will continue to be very significant for shaping the restaurant industry. The key question will be, who owns the customer? Clearly Grubhub and their competitors would like to ‘own’ the restaurant customer.
Restaurant chains like Panera are delivering their own food. National chains like this are in the position to be able offer delivery themselves with their own drivers, countering the trend of platforms like Grubhub to ‘own the customer’. McDelivery is a growing service that delivers McDonald’s meals. Available in many parts of Asia, the Middle East, and Latin America, the service uses motorcycle couriers and sometimes partners with Uber. In China, the service is available 24 hours a day. Restaurant brands are going to need to think very carefully about whether and how to ‘play’ with Grubhub. And consider whether this is going to benefit them, short-term and long-term.
This space is still in the experimental phase. One clear development is that the subscription model isn’t a fit for many consumers who may want to try meal kits as they like, without being locked into a subscription. The logical extension of this is meal kits that are available on demand in retail stores. Albertsons’ acquisition of meal kit company Plated and Kroger’s acquisition of Home Chef, both last year, shows this trend playing out. And Blue Apron, one of the leaders in the meal kit space is now testing a partnership with Grubhub, to be offered on its platform in New York City.
Grab and Go
Of course, the ‘grocerant’ concept; merging of grocery and restaurant, while not new will continue to develop. Ready to go, heat and eat and hot and cold bar options will continue to expand in grocery. And delivery options being more available.
Convenience stores, which make up one third of all retail locations in the U.S. and are a destination for 165 million people throughout the U.S., have always been a source of staple, to-go, ready-to-eat foods and beverages.
Operators like Sheetz and Wawa have developed strong fresh and better-for-you food options. And increasingly, new players like Choice Markets out of Denver, CO are developing modern positioning, such as offering more healthier food, locally sourced and organic food. Choice Market bills itself as combining “the product selection of a natural market and fast casual restaurant with the transaction times and footprint of a traditional convenience store.”
There will be many, many interesting new business models around local food. Local both in terms of the sourcing of ingredients and local preparation. Because if you think about it, food is, and will always be, the most local of things. Fresh food, to be done well, needs skilled preparers and chefs, locally based. It needs well-sourced, fresh ingredients. Fresh, healthy food – the types of foods we want, simply does not travel well. And consumers increasingly expect better quality, more interesting, varied food offerings.
Consequently, there will be many opportunities for innovative new formats, and operators, to satisfy these needs. Especially in the most densely populated parts of America.
These concepts will leverage the fact that fresh food needs to be prepared close to the consumer. And higher-income, time-pressed suburban consumers will want the option to either have fresh food delivered or to be able to pick it up in an attractive local format that is easy to access quickly.
These formats will also leverage the fact that consumers want food that is in many stages of preparedness—from produce, meat and seafood for cooking from scratch to portioned meal kits to heat-and-eat entrees and desserts. They may want a ready-cooked entre, but want to throw together a quick salad or veggies in their own kitchen, and to be able to get both at the same place, quickly and easily. Or they may want to be able to eat the meal in that venue, in a fun environment.
What does all this look like? Is it a grocery store? A deli? A high-end ‘C’ store? A restaurant? It may be a combination of all of these, and the possible variations will be endless. The revolution in how we plan for, acquire and consume food is just beginning!