Amazon & Whole Foods- this changes everything in food service-
Updated: Oct 12
(SEPT. 2017- original publishing date)
If you are in the food service business, the entire game changed with the Amazon / Whole Foods combination. You can watch from the sidelines or get on board this movement. It is not just a 'trend' it is the future of food service. You need to think about fresh prepared, 'grab n go' packaging or counter service in both hot and cold meals. It's also not just for large groceries and deli stops because even full-service restaurants and small grocery stores need to be in service for what everyone is going to expect of any food business in the very near future. Good food, ready to eat or reheat the moment they walk into your retail site.
Competing with Amazon is a lesson we take from the bookseller days and how they changed the publishing business. The same scenario is about to play out in Food Service- You need to be ahead of this game-changer. There is no sticking to the 'old way' if you want to survive in food service. Not that you need delivery in your mix, but certainly, 'ready-to-eat,' 'grab-n-go,' or quick meal service all need to be part of your language and operational outlook.
Take this simple real-life example. While traveling to a family wedding and exploring the Oregon Coast on the way up to Olympia, Washington, I stayed in a chain roadside hotel along Highway 101 where amenities were simple: refrigerator, microwave, coffee maker, and Wi-Fi. I wasn't in an area where I wanted to go out for a seated meal, and I'm not a fan of the Fast Food Chains. I went to a local IGA grocery just after the Deli had closed for the day.
I asked about meals to microwave at the hotel. I was directed to a half dozen pre-made sandwiches and a couple of small mac-n-cheese containers, which were left over from a lunch hot service counter when the deli was open. Options being absent, I went back to my hotel; a walk of only a couple of hundred feet, I got into my car and crossed the busy Highway to a Safeway. As one of the best groceries I've seen with prepared hot meals, from roasted chickens to pasta with various types of meats and sauces, as well as cold salads in a dozen varieties, I knew I would find an entrée to take back to my room.
You can't be in the food business and not have prepared, easily combined meal portions "to go." Food service is now about more than seated fast or casual dining. It is about ready-to-eat meal solutions, delivery, and more. If you don't have a take-out counter, an ordering system, and a dedicated menu for quick meal service you won't stay in the game.
Others have proven it works: Chef Mitch Davis, at one of Sacramento's restaurants near the new Golden 1 Center, does over $2000 a day with morning coffee, hot croissant sandwiches and lunchtime sandwiches, salads, and lunch specials. All from a small 350 sq ft retail space in front of the restaurant. Mitch explains that one of his reasons for success.
"Our Pricing is lower on many items than others in the downtown area. And we do better quality items than anyone else. We roast our turkeys daily for sandwiches, and everything is made fresh and packaged on-site. Although we do run a higher food cost than the sit-down restaurant, it does bring people into the dining room for business lunches and creates more interest in general. "
Back to my hotel experience. That one market, 50 yards from a 125-roomto-go hotel, with nothing but a Dairy Queen and Safeway in sight for dinner, was missing out on a vast opportunity to add hundreds of dollars a week to sales. And most of it could be done without adding any staff. Any of those day-time deli workers could have prepared more significant portions of hot items for lunch and neatly packaged a dozen or so in microwave containers in the afternoon to stock a' to-go' counter or shelf. This particular market, from my research, shows they own nine stores up the Oregon Coast. One person, in that group of stores, could take on this project and bring added value to 'regular customers' while reaping the benefits of hotels all up and down route 101.
To stay on top of the food service business, the small grocery and restaurant owners need to keep this whole new Whole Foods competition in the forefront.
You can no longer - NOT HAVE simply prepared meals for take-out
You can no longer - NOT HAVE after-hours' grab-n-go' in your grocery store after the deli closes.
You can no longer - NOT HAVE an option for pre-ordering for 'pick-up' in any restaurant or retail site.
You HAVE - to HAVE some or all of your these if you want to survive the next decade in food service.
In retail, a term used for a problem category of items that must always be in stock -proven best sellers is "OUT OF STOCKS." It's now going to be your new daily routine to make sure you have no 'OUT OF STOCKS' on favorite items. Some examples for your take away counter: Lasagna with beef, Veggie Lasagna, Penne Pasta with Chicken and Alfredo sauce, 1/2 roasted chicken, Enchiladas: chicken and beef, Salads: Cobb, Chicken Caesar, Asian Kale, and a variety of a half dozen cold sandwiches and Wraps.
You can also add house-made dressings, condiments, and anti-pasta platters to the mix for quick party gifts or office parties.
Amazon /Whole foods are about to enter the delivery marketplace with competitive pricing and organics. To compete with that requires you to look ahead and realize the whole world of food service marketing is about to change. Even if you don't currently have a WF near your place of business, Amazon will soon be at your neighbor's door. If you look today at what you can do to jump into that market, start with what you know you can prepare and serve with just new packaging, counter space, and a POS system to handle the change.
Start with some foresight: Sit a few of your best guests down, and ask what they would love to take home if it was simple and cheaper than having it at one of your linen-covered tables. Take a survey of your best-selling lunch items and find the packaging to make it work for easy prep at home. Microwave or oven containers can be obtained from any food distributor. Even starting out small, but with enough visual merchandising/marketing, can turn your regular guests into 'grab-n-go' customers. Don't do it haphazardly with partially stocked items. You need to present it as if you mean it and keep top-selling items in quantities to ensure you don't run out by the end of the day- You can discount two-day old items if need be for better inventory control. And don't be afraid to run a higher food-cost in this area. You can make up in volume if you build a better loyal customer base. This concept comes down to keeping a repeat customer and adding revenue to your business.