In the grocery industry, we tend to think about categories within the context of our own market. Everyone knows who the main players are, and the size and growth of their categories.
But this principle is faulty when it comes to food to go. If you measure only grocery stores, you could miss most of the market.
That means grocers could underestimate the importance of food to go – particularly around lunch. It’s a dynamic market full of opportunity for suppliers and outlets, but it is hyper-competitive. In a typical town, the consumer can choose between supermarkets, convenience stores, Greggs, McDonald’s, Costa, Subway and many more. At lunchtime, there is a feeding frenzy, but there are plenty of outlets fishing.
Greggs and McDonald’s are of similar size to Tesco in food to go, according to Lumina, while the other grocers are some way behind. That means, even if you add all the independent convenience stores, food retail has only about one third of the food to go market.
There is a lot happening in this space. In August, McDonald’s brought back its three for £3 mix & match lunch promotion. In September, Tesco ads on TV were dramatising the variety offered in its lunch deal. The competition is constant. So what are the drivers of success in this market?
First, speed and ease is crucial. Lunch at home is often a quick pit stop in a busy day. Packed lunch is typically made when people are tired late at night or rushing in the morning.
For lunch to go, the customer wants to get to the outlet, find what they want and get out quickly. The easier we make things for consumers and for outlets, the less mess and fuss, the better the chance of products and solutions being adopted. And because location is important for food to go, getting your product into as many outlets as possible is key. If you’re not in the most convenient store, you’ll often miss the sale.
Second, health drives choice for many consumers. For some it’s still about fat and calories. Others look for fresh and natural options. The desire for protein has grown fast and is still growing. Some consumers want it for performance and strength, others as a way to manage weight and stay full. There are a lot of products targeting this need. So make sure you’re clear about the kind of health you’re targeting, and then clearly signal it to customers and shoppers.
Third, help outlets with customisation and breadth of choice. Supermarkets offer more and more SKUs in their lunch deals because they want to have something for everyone. This can stretch to fresh fruit, bakery items, even ice cream and hot coffee. For suppliers it’s less about proliferation of SKUs, but more about finding products they can do well, that help target specific customer segments.
Lunch is exciting. There is growth to be had. So focus on speed and convenience, target specific health needs, and help outlets broaden their appeal to more consumers.
No comments yet