How restaurants can fend off grocery prepared foods and CPG.

grocery, prepared foods, deli, CPG, dining, options, variety
The prepared food options at grocery has improved along with quality. Can restaurants keep up?

This time on the Food & Restaurant Marketing Podcast, Mr. Pierno and Mr. Santy investigate the ways that the improvements made in the grocery prepared offering have hurt restaurants and the four ways restaurants can fight back. With so much cost pressure on restaurants, how can they win this battle? We explore, join us.

How can restaurants fend off their new rivals at grocery? Let’s find out.

Want to read along? Enjoy the transcript here.

Transcriptions by Go Transcript.

 

Automats: restaurants and food with the absence of service

Eatsa is a restaurant concept from San Fransisco that offers a new take on service. Healthy bowls served without interacting with another human. The food is described as surprisingly good. But behind the high tech facade of Eatsa, people do take the orders and prepare the meals.

This is part of a trend in food towards automats. Burritobox, 24/7 Pizza and a wave of other brands are vying to become the Redbox of food. Each brand cites the success of technology and delivery services which eschew the traditional service of a restaurant and have seen big success. It’s true, Seamless is a success with younger consumers. Casual Dining concepts like Chili’s and The Olive Garden have added table side tablets to reduce server interaction and friction from dining experiences. McDonald’s and Panera are following suit.

There is certainly a novelty factor involved for many of these automated restaurants. Having your quinoa bowl delivered at the pushing a button or sushi prepared by a machine is a curiosity.

When a customer has a bad experience at an automated restaurant, brands will have to hope that they take to their app or to social media to complain if only so they can try to make it up to them.

And there’s no doubt that convenience is as important as ever. Consumers comfortable with ordering from apps and spoiled with choices have indicated in research and with their wallets that they avoid restaurants that are overly complex for some meal occasions. Have people become so eager to avoid interaction with other humans that they would choose a box restaurant concept?

There is an optimal time and place for any successful food concept. Rubio’s and Chipotle don’t have to close for Burritobox to find its customer base. They’re be indirect competitors. Consumers will choose the option that is appropriate for the time and place. Have an hour? Stop at a casual dining concept. Have a half-hour? Stop at Qdoba. Getting on a train? Burritobox.

Fears of Commoditization

While there may be a time and place for everything, too much availability makes anything less special. Especially food from what appears to be a vending machine. There is a reason the original Automats disappeared. Burritobox emphasizes that it is supplied with hand-made food that is checked for freshness and quality every day.

Removing the service element puts a lot of focus on the remaining experiential elements. For Eatsa, that means the user experience of pushing buttons to order, which people seem to enjoy so far. Even grocery which has stepped up prepared food offerings have some level of service. But in an automat environment, there is no service, and that puts a lot of pressure on the meal itself.

Let’s not forget that consumers can get pizza almost anywhere, and pretty high quality instant gratification products at c-stores thanks to concepts like Hunt Brothers. A pizza from a vending machine will still have to be cooked or heated; customers will still have to like it enough to come back or recommend it to anyone. Brands will have to convince consumers that a slice from the box is more than the microwave pizza they make at home.

In the case of Burritobox, there is no shortage of options up and down the experience chain. From Taco Bell at the mass-QSR level all the way up to Casual Dining and a host of stand-alone concepts. Burritobox will have to work very hard to earn trial and must really deliver on food experience to earn a second visit.

Sometimes a mistake is made in a restaurant that can be made up for by service staff with a smile, or an apology. When a customer has a bad experience at an automated restaurant, brands will have to hope that they take to their app or to social media to complain if only so they can try to make it up to them.

Not just demand-side benefits

Looking more closely at the automation that has taken off so far though, it may not be these trends that will drive growth. In fact, it might have more to do with real estate cost and site selection. A look at the Eatsa footprint shows that they cut out a lot of expensive square footage along with the front-of-house service area and counter holding those cash registers. In San Fransisco and New York where the brand is opening first, that’s a huge savings.

24/7 Pizza looks for local pizza brands to make the inventory for their boxes and displays their name. This gives a pizza brand an opportunity to expand without opening new storefronts or even investing in a real estate search. Redbox, the physical DVD rental vending machines popped up everywhere (even as Netflix beat Blockbuster Video into closing location after location). Growing restaurants can look at that model and borrow ideas.

Brands can also use this outlet to put their best foot forward. Restaurants using automated tech to expand beyond their existing locations can test the output of boxes and offer only their top menu items that are best executed in that environment. This way a consumer not familiar with their brand will have higher odds of an experience they want to repeat.

How long is the long tail in CPG product innovation?

Every day, new CPG product ideas are born, many for niche customer bases. For how long can the long tail be profitable? Let’s discuss.

grocery, retail, shelf, CPG, innovation, product, sales, marketing, strategy, customer
With retail shelf space at a premium, how do new CPG products find their niche?

On this episode of the Food & Restaurant Marketing Podcast Dan and Adam look at the uphill climb of CPG products clawing for shelf space. Every brand is born from the idea of solving a need for an ideal customer, but most aren’t able to distill that vision. We discuss the challenges from the brand and the retailer side of the issue.

How can new CPG products and brands make the leap from idea to success? Let’s dive in.

Prefer to read along, have at it with our transcript, here.

Transcriptions by Go Transcript.