Industry Voices

The Battle for Dinner

RSS

This blog post is co-authored by David Donnan and Bob Goldin. Donnan is a partner with A.T. Kearney and leads the firm’s Global Food and Beverage Practice. Goldin is executive vice president of Technomic, Inc.

Dinner will prove to be the key battleground for supermarket fresh prepared foods and restaurants. Retailers have already lost share for breakfast and lunch, as quick-service restaurants in particular have taken occasions that used to be fulfilled with products purchased in grocery stores. Much of food service growth has come from changing consumer habits: buying coffee instead of making it at home, going to the drive-through window for a breakfast sandwich, and picking up lunch at quick-service or fast-casual restaurants instead of brown-bagging.

Dinner is where fresh prepared foods have the best prospects to become established as a meal staple for consumers. Breakfast is a challenge, and lunch success is largely dependent on location. With a differentiated dinner positioning centered around “better-for-you” and approachable but elevated cuisine, however, there is oppor­tunity to play a much greater role in the takeout market. Casual dining chains have yet to establish a good model for it, most quick-service operators are better suited for lunch occasions, and delivery options remain limited in terms of cuisine—not to mention ill-suited to meet consumer demand for fresh food.

Retailers also have a considerable advantage in that they can offer one-stop shopping for ready meals and other household needs. Retailers can place both at the top of consumers’ minds through tactics such as prominent signage throughout the store promoting fresh prepared foods as a conve­nient dinner solution, monthly calendars listing specials for each day, and menu boards promoting bundled offers.

Retailer investment in fresh prepared foods has created a very real threat to restaurants, which will require better execution to remain competitive, especially at dinner. Retailer offerings have evolved to the point that a growing number of consumers recognize not just convenience and value, but also quality and differentiated cuisine. Retailer advances raise important questions about how the restaurant industry should respond to potential weaknesses. Answers might include measures such as meaningful menu updates (versus “me-toos”) and packaging innovation to maximize takeout potential.

Improvements in retailer fresh prepared foods have the potential to change the entire food industry. The positioning around fresh will affect retailers, other food service operators, and food processors alike. The segment now represents either an immediate threat or an opportunity for all and will require changes to overall strategies. As it evolves, each player can choose to be an innovator—with manufacturers and retailers working together to solve the economics and supply challenges of fresh prepared foods—or a fast follower. Those that opt to wait around and see how the market develops will inevitably miss out.

This article is excerpted from a white paper entitled “Fresh Prepared Foods: Cracking the Code for U.S. Retailers.” 

Discuss this Blog Entry 0

Post new comment
or to use your Supermarket News ID
Contributors

Sean McBride

Sean McBride, founder of DSM Strategic Communications, LLC, is former EVP of communications and member services at the Grocery Manufacturers Association.
What's Industry Voices?

Here you'll find a wide variety of industry stakeholders weighing in on the important issues that define today's retail food business.

Blog Archive
Penton Media Food Group and Related Sites

Sponsored Introduction Continue on to (or wait seconds) ×