As grocers think more like restaurants, IFMA changes name to broaden food-away-from-home focus

Amazon Fresh sees an opportunity to offer quick-service pizza in their stores. So, for inspiration, the store’s culinary team studies QSR pizza players to better compete in that market.

It’s an example of how grocers and c-store operators are thinking like restaurants to compete for that food-away-from-home dollar.

So said two executives from leading food retail chains at the International Foodservice Manufacturers Association (IFMA) 2024 Presidents Conference, which kicked off Sunday in Scottsdale, Arizona. It was the first time in years that leaders from the food retail world had appeared on stage at the event, and that fact also represented a fundamental shift in the association’s focus.

In fact, on Monday, IFMA announced it was changing its name to IFMA The Food Away from Home Association, which better reflects the Chicago-based organization’s transformation over the past year. 

Now the associaton aims to integrate the full spectrum of the food-away-from-home ecosystem, adding new categories of membership for all kinds of operators—restaurant and retail—as well as those in the supply chain and service providers.

Retailers like Amazon Fresh and Hy-Vee, for example, are rapidly growing their food-away-from-home business in a way that competes directly with restaurants for value- and convenience-hungry consumers.

Related:Why grocery stores are starting to look like quick-service restaurants

Aaron Wiese, president of Hy-Vee Inc., for example, said his company operates about 550 units, including roughly 300 grocery outlets, 190 c-stores and a few dollar-store formats. Some people call Hy-Vee the “Wegman’s of the Midwest,” he said.

Hy-Vee operates a food hall in its grocery stores that creates a destination. And Hy-Vee c-stores are restaurants that happen to also offer gas.

“We sell more burgers out of our c-stores than our flagship 100,000-square-foot grocery stores,” he said. 

Wiese sees a big opportunity with delivery out of the grocery-based outlets.

“We anticipate about 40% of our food business being in delivery, so we’re really investing in that,” he said. “It’s where a large selection of our customers are going and we want to deliver a great product.”

Catering is another opportunity for the grocer, including wedding cakes, and they can also offer flowers, Wiese said.

Hy-Vee has tried to capture consumers looking for healthy options. The grocery chain has registered dieticians available to consult on specific health needs, from diabetes to high blood pressure, and there’s an area in stores called the Health Market that focuses on specialty diets, like those looking for higher protein, no gluten or other specific options, he said.

Related:Report: Convenience still drives morning routines

Amazon Fresh, meanwhile, is a fairly new concept developed by Amazon about five years ago. It has grown to 60 physical stores, mostly on the West Coast and in Chicago, and another 20 stores are expected to open this year, said Andrew Sasser, Amazon Fresh’s senior manager of the culinary category team.

Of course, Amazon Fresh is only one part of the Amazon retail ecosystem, which also includes the more c-store-like Amazon Go, Whole Foods Market and the website Amazon.com.

When asked about headwinds, Sasser said labor is a significant challenge for the retailer and it’s difficult to recruit people with the level of expertise needed in the kitchen. As a result, Sasser is always looking for great products that can be prepared with fewer touches.

“We look for what can be done upstream,” he said.

Retailers have increasingly been trying to compete with restaurants.

The 7-Eleven chain last month said it plans to open 500 food-and-beverage focused locations in the U.S. by 2027, for example, as it closes more than 400 of its traditional retail locations. And the recent NACS show in Chicago also showcased how c-store operators are looking to foodservice to replace revenue lost from the decline in the sale of cigarettes and negative perceptions about alcohol.

Related:Making natural and organic retail food service efficient and profitable

This story was originally featured on Restaurant Business, a sister publication of Supermarket News.