The hybrid concept poses major competition for other foodservice operators                  

As if the saturated restaurant business wasn’t competitive enough. Supermarkets and other retail grocery outlets are fully invested in in-store foodservice concepts that are gaining serious traction, particularly with today’s more health-conscious consumers.

Enter the new segment known as the grocerant.

Of course, ‘new’ is arguably a relative term.

Whole Foods, for example, has offered salad bars and some form of casual dining experience in its stores since the chain’s beginning 30 years ago.

Most notable, however, is that, today, Whole Foods has more than 30 full-service restaurants with waitstaff, not to mention 250 other quick-service concepts.

And the trend is proliferating, as major chains like Hy-Vee, Wegmans, Safeway, Kroger, Publix, Mariano’s in Chicago, H-E-B’s Central Markets and even Walgreens, among others, have jumped on board.

And many of them have gone way beyond food-court or grab-and-go style options to offer made-to-order fresh foods, often coming with the ambience and food quality that rivals some of the best eateries in their neighborhoods.

The results have been impressive, according to a recent Technomic report citing sales from supermarket foodservice have climbed around 10% a year from 2005 to 2015.

Grocerant Growth Is Linked to a Key Trend

Knowing how to respond to this new competition starts by examining why these grocerants are so successful in the first place.

Perhaps it’s an oversimplification, but it really comes down to one word: Fresh.

Valid or not, consumers widely perceive grocerants as having fresher menu items than their comparable fast-casual or fast-food restaurants located elsewhere.

And why not? The grocerant is surrounded by its own food sources, isn’t it?

Heck, the dining tables are a short 50 steps away from the produce aisles. You can’t get any fresher and, therefore, better tasting and healthier than that.

In addition, the intensity of the strategy going into these grocerants is not unlike that of any establishment that depends on foodservice alone, with supermarket executives initiating the research to make sure the type of grocerant aligns with local appetites and lifestyles. To be more competitive, grocerants are going so far as to offer typical restaurant value adds like live music and trivia nights—or even the not-so-typical, like cooking classes.

The Foodservice Response to the Grocerant Threat

So, what can restaurants and other more conventional foodservice operations do with the rise of this new competitor? Again, it comes down to the same word.

The flag in this tug of war hangs clearly over the virtue of fresh.

1. Fresh Is What You Start With

Fresh food starts with real ingredients. Conduct an audit of your pantry, fridge and freezer.

How many of your ingredients would be considered whole foods, raw and unprocessed?

Where are you cutting corners with processed ingredients that have become the crutch of too many commercial kitchens?

Have you explored equipment solutions that can keep fresh food prep labor-competitive against more tempting precut, prepackaged options?

2. Fresh Is How You Make It

Fresh also minimizes the time between food preparation and consumption. A number of fast-casual operations, like Panera, Shake Shack, Jimmy John’s and Chipotle, have ridden the “made-to-order” horse to franchise stardom.

By foregrounding the food-making process—opening up the kitchen, showcasing ingredients, emphasizing “fresh” sensations like the smell of bread just out of the oven or the sound and smell of grilling meat—these chains have earned a reputation as a healthier place to eat on a more regular basis than most other QSR or fast-casual establishments.

3. Fresh Applies to More Than Your Menu

It starts with promotion and how fresh fits in your brand’s unique value proposition?

Consider Chipotle a little bit more—the commercials emphasizing real ingredients and in-house food prep; the poster-sized images of dewy lettuce and tomatoes greeting customers as soon as they walk in the door; the sparklingly clean industrial interior.

All these aspects—combined, of course, with the made-to-order spectacle—work together to create an experience of freshness, even before the food is ever tasted.

But it also extends even beyond that.

Fresh is about implementing ideas that clearly position your operation against the grocerant experience, where, for example, patrons can find themselves in a less comfortable high-traffic vibe or a less focused taste offering that comes with serving a broader supermarket business.

What can you offer that makes for a better and truly unique experience that can be tied closely to your brand?