or wait 15 seconds
or wait 15 seconds
You know that everything is changing. And you know that the pace of change is accelerating. When it comes to how we eat, the changes are moving at warp speed (Star Trek fans know that is really fast). Much of what we know about food and beverages has changed. In many cases the new "rules" have done away with things we knew with absolute certainty.
Let's look at what this all means to our businesses. How do we deal with all of this change? In case you missed it, here is what is happening:
1. What we eat has changed.
2. When we eat has changed.
3. Where we eat has changed.
4. Why we are eating differently has changed. Millennials and Generation Z are leading the way to entirely new consumption patterns.
5. And: The competitive situation is extremely challenging in new and different ways. There are more fast food restaurants and convenience stores. It seems they all want to steal our shoppers. Chain drug stores and supermarkets are competing for the same transactions we seek with conveniently located sections selling single-serve foods, snacks and beverages.
6. Plus: There are new foods, snacks and beverages being introduced almost every day. We cannot stock and sell all of these products given the limited shelf space we have in our micromarkets and vending machines.
We need to look at the current situation very carefully. Never forget that we are in the immediate consumption (IC) business. That is generally defined as foods and beverages consumed within 15 minutes (and up to one hour) of purchase. In 2015, a report from Coca-Cola Co.'s Knowledge & Insights iSHOP Tracking Study, "Immediate Consumption: A Profitable Trip and Retailer Opportunity," presented some important insights:
• More than 30 billion shopping trips included a food or beverage for immediate consumption. There are two of five shopping trips with IC purchases.
• 66% of convenience store visits were for IC foods or beverages.
• Younger shoppers are more frequent IC buyers.
• Combination purchases are an opportunity. 18% of IC purchases were for food only; 57% beverage only; and 25% were food and beverage sales.
• The most important dayparts for convenience stores were
6 a.m.-11 a.m. (morning drive time, breakfast and morning snack/drink) and 2 p.m.-5 p.m. (afternoon snack/drink and home-bound drive time).
A Technomic report, 2018 Snacking Occasion Consumer Trend Report, highlighted how snacking is evolving. Most people eat three meals daily plus a few snacks. There is an increasing frequency of snacks replacing meals. The research found:
• 80% snack at least once a day.
• Lunch is the meal most likely to be replaced by a snack. (One of my convenience store contacts always said, "A 20-fl.oz. soft drink and a bag of chips are lunch, in the car, for many people rushing through a busy day.")
• Food, in smaller portions, can be a snack according to 37% of respondents in the study. (Have you seen all the advertising and promotion from fast food restaurant chains pushing their $1, $2 and $3 food menu items?)
We might offer the most convenient locations when people are at work. But as they go through their busy days, there are more than 500,000 locations where they might stop to purchase IC foods, snacks or beverages, including:
My recent article "How Come Everybody Sells The Same Stuff?" focused on why you need to differentiate what you sell versus the competition. Let's examine some of the broader changes in eating patterns.
Think about which came first. (1) As new foods were developed and introduced (in restaurants or in supermarkets), did these products change the way we eat? Or (2), did people change their expectations and preferences for flavors and ingredients relating to the foods they consumed? From those new needs, manufacturers, retail stores and restaurants had to refocus their product lines and menus. As you will see, the answer is all of the above, and more.
The Cohort Effect
The general definition applies to age groups whose behaviors define what they do (or do not do). It can be applied to "groups" we know well: baby boomers; millennials; Generation X; etc. Each of these cohorts changed the food culture in the U.S.
One of the best marketing trend presentations (in 1988) in my memory focused on "the cohort effect." It addressed how different age cohorts had changed the consumption patterns of food, snacks and beverages. The key points were:
1. In the past (before the baby boomer generation), soft drink consumption peaked in teen-aged years. Then young men and women "graduated" to coffee. The research clearly showed that the baby boomers cohort continued drinking soft drinks rather than shifting their beverage preference to coffee. Starbucks was not a factor – not yet anyway. This helps explain some of the strong volume growth experienced by the leading soft drink brands in the '70s, '80s and '90s.
2. The same cohort behavior applied to snacks. It included salty snacks, cookies and candy.
Coming back to the present-day, the cohorts that followed the baby boomers had their own unique impacts on our relationship with food:
1. Fast food restaurants became the dominant force in food-away-from-home.
2. Snacking frequency increased. For some people, snacks replaced meals. The food industry (eventually) caught on to this trend. New products were introduced to capture these snack (or small meal) occasions. Today we see beverages as snacks – smoothies, specialty iced coffees and teas, and more.
3. New foods and flavors became popular. As younger people traveled internationally, they returned home and sought out the cuisines and tastes they encountered abroad.
4. Coffee came back and younger cohorts moved away from soft drinks.
5. Bottled water "happened."
6. Vegetarian and vegan diets caused schools and colleges to adapt their menu offerings. Many restaurants offer alternative proteins on the menu. Have you received requests from clients for vegetarian or vegan products?
7. Allergy restrictions are challenging for our businesses and the people we serve. Are you offering allergen-free or gluten-free products? "Clean labels" became a demand that everyone in the food business had to address.
8. Religious dietary restrictions are critical as our population becomes more diverse. How have you responded to these requirements?
The 101 Dishes That Changed America
Even with all of the cultural changes, there has been a parallel trend line in food innovations. These new and different foods also shaped a long-term revolution in how we eat.
There is a highly relevant article at thrillist.com, "The 101 dishes that changed America." This was meaningful for me personally. Throughout my work experience in foodservice, new product development was one of my primary responsibilities.
The article covers 11 decades, beginning with the 1910s. The editors pulled together a fascinating list of foods. Get out of your office and taste some of these foods. It's more than the food. You'll have the experience of eating at some of the most interesting places you'll ever find. The list ranges from fast food all the way to some of the very best restaurants in the world. For example:
Here's How To Win In This Challenging Environment
Pay attention to the different populations at the sites you serve. Make sure you have the food, snacks and beverages they want. That means brands and flavors with which you probably are not familiar now. How do you do that?:
1. You can do surveys and see what the responses tell you.
2. Better than research is to show up during meal times and break periods. Engage people in conversation. See what they are having that you do not stock. It does not matter if they bring it from home or buy it at a nearby convenience store or restaurant. You've lost that sale today. Maybe you can win it back next week.
3. Ask your shoppers about their favorite foods, snacks and beverages. Find out where they are buying those products. Identify distribution sources if your own suppliers do not stock those brands.
4. Consider how well your packaging and branding relate to the populations you serve. Do you need new and different designs and labeling? How do you promote and merchandise if you have to add signs and menu details in other languages? Do not dismiss this point so quickly. You can gain credibility and acceptance if you show respect for the unique needs of the diverse groups at the locations you are serving.
You can, if you wish, look at all these changes as a problem. Or you can see them as an opportunity. Get closer to the changes and unique needs at each site, especially your best locations. Do what is necessary to keep the shoppers at those locations happy.
You have to adapt your daily operations to deal with the changes in how we eat. If you can do that well you open the possibility of "selling more stuff." That means increased sales and more profit.