Last updated on November 28th, 2016 at 09:38 am
by Alissa Marchat/staff writer
The competition grocery retailers face when entering the foodservice space is heating up, both with each other and with restaurants, which often have an edge when it comes to atmosphere and the ability to shift with trends. To meet rising consumer expectations for fresh, seasonal and memorable food experiences, retailers need to take their cue from the restaurant industry’s shift toward open kitchens and flexible menus, according to Orlando Espinosa, founder of consulting firm Orlando Espinosa + Associates LLC. At this year’s Supermarket Sense conference in Conyers, Georgia, Espinosa discussed creating a successful retail foodservice program. Following are some highlights of his presentation, “Enhancing the Customer Experience Through Engaging Kitchen Design.”
Understanding your customer base
Grocers have been grappling with what Espinosa calls the “transitioning population”—the rise of Millennials and the impending decline of the Baby Boomers—for years, so it comes as no surprise that generational difference are a challenge for foodservice operators as well.
“Who do you provide food for? You can’t pick one audience. You have to provide food for all of them,” said Espinosa. “A Millennial wants something made fresh in front of them, but a Boomer says, ‘I don’t want to have it made; I want it all ready, let me get out of here.’ How do you provide those different types of foodservice styles all within the same facility, make it cost effective, get your return on the investment and continue to please those clients?”
While there’s no one simple answer to that question, Espinosa offered a suggestion that goes a long way toward pleasing both generations: cooking to inventory. A process that works well on college campuses—and that would work well in a grocery foodservice operation, too—cooking to inventory involves putting the kitchen and all of the fresh ingredients on display.
“I have all my ingredients, and I’m producing (for example) stir fry or fajitas. I’m producing that, putting it in the food well or display. I’m giving you the impression, as a customer, that it’s made for you, but I’m cooking to an inventory that’s drawn from, that will allow me to ebb and flow with my participation,” Espinosa said. “…What’s important with that process is that your impression as a customer is ‘boy, that’s fresh.’ It hasn’t been made in the back, held in a hot food well and brought forward. It’s being made there fresh and…it’s being served customized on a plate for you.”
This process not only satisfies Millennials’ desire for fresh foods and Baby Boomers’ desire for quick food, but it also proves to be cost effective by minimizing the operator’s food waste.
Make your menu as varied as your customers
Generational differences aren’t the only consumer attributes grocers need to be aware of. When creating a foodservice operation, retailers need to know who their audience is, where that audience currently is eating and what they are paying for it. Through surveys and focus groups, Espinosa has found that when consumers go to a restaurant, they are willing to pay, for example, $7.50 for a hamburger at lunch. For that same hamburger at a retail foodservice operation, the price point a consumer is willing to pay drops to $3.
“How do you close that gap? Well, it’s the presentation, the freshness of the product, the customer service,” he said.
In his operations, Espinosa has seen a rise in the percentage of women making up customer bases. In the Midwest, it can go as high as 65 percent, making their participation essential to the business. And they are the ones who are spending anywhere from $3.24 to $4.45 per day for a meal.
“Why is this important?” he asked. “When we deal with executives at these different locations, and even at colleges, everybody wants the $7 to $8 meal. The reality is the people who are supporting (the operations) are the $3-to-$4-a-meal customers. So what we have to do is allow the capabilities for those people that want the $8 meal to buy up.”
If a retailer’s foodservice program has hamburgers on the menu, that means offering a basic hamburger for $3, and then offering blue cheese, mushrooms, onions, etc., as add-on items.
Don’t forget to shift with dayparts
As if consumers didn’t present enough variables, foodservice operations also have to provide for various dayparts if they want to capture their full share of stomach.
Statistically, people have a set amount of money that they are going to spend on away-from-home meals and snacks each day. Maybe they stop for coffee in the morning, then go out for lunch or grab an afternoon snack.
“If I can give you the same Starbucks coffee in the morning and stop you from stopping at Starbucks on the way in, I can capture that share,” Espinosa said. “And if I have the food that you want at lunch, I can capture another share. And because of our Millennials that eat in the off-hours, if I can produce that snack item or that late lunch item for them, I capture another part. So, all of a sudden, I’m increasing my share of stomach—my profitability.”
This is where flexible equipment comes in, from digital menus that can change from daypart to daypart to multi-purpose food stations, Espinosa said. Equipment like combi ovens, speed cookers, waterless food wells, ventless technology and multi-temp refrigeration units, among others, all can help foodservice operators provide cost-effective flexibility.
Orlando Espinosa’s career in the foodservice design, procurement and construction industry has spanned 40 years. Founded in 2005, Orlando Espinosa + Associates works with clients to enhance the efficiency and profitability of their foodservice operations through consumer and marketplace assessment, brand identity development, and operation/facility design.
