Conventional wisdom has held that restaurants function as the primary entry points for new foods and flavors, that they serve as America’s de facto test kitchens for the unfamiliar.
This remains true to an extent, but contemporary circumstances have conspired to redirect many consumers toward greater experimentation in their own kitchens.
This point was driven home during a presentation at the Fancy Food Show in New York City last month, when the data meisters from Menu Matters presented some surprising research that revealed that 46% of consumers now test drive foods at home. They further noted that 29% try new things both at home and in restaurants, while only 26% of us explore the unknown in restaurants. Of greater concern to restaurants is that we’re experimenting “significantly” more at home, a finding that cuts across most demographic groups.
This reversal of traditional patterns was borne out earlier this year in an eye-opening Restaurant Business story by Pat Cobe about the Trader Joe’s effect and the extent to which that food retailer serves as a gateway to global flavors for its legions of loyal customers. The range of products on offer and their modest price points make the grocer a force to be reckoned with in the markets where it operates.
Déjà vu all over again. We’ve been in this situation before: Coming out of the Great Recession of 2007-2008, supermarket foodservice growth substantially outpaced restaurants, and diners stayed home in droves. At that time, the emergence of Amazon delivery services twinned with the growing popularity of digital gaming and entertainment options constituted a one-two punch and gave restaurant patrons a convenient excuse to remain on their couches.
The current competitive state is similar. Covid forced consumers to discover the uses of their home kitchen appliances, to which they added shiny new ones like bread makers and air fryers.
Post-pandemic menu-price inflation has made eating away from home a luxury for many, while digital food media have made stars of home cooks and encouraged consumers to spread their culinary wings.
As a result, Technomic forecasts that supermarket foodservice will grow 1.6% in 2024, more than twice the rate of the total industry, which is pegged at 0.7%, and way, way above the anemic 0.1% growth projected for restaurants.
Value propositions. No question this is a tough environment, and like restaurants, grocers are also stepping up with their own aggressive value offerings.
A cursory review of the Minneapolis-St. Paul market reveals that daily dinner deals at HyVee, a Midwestern supermarket chain with nearly 300 locations, include choices like the Monday Special Meatloaf Dinner for $7 or Thursday Steak Night for $10. Both include potatoes and fresh veggies.
Homegrown local favorite Kowalski’s Markets operates 11 grocery stores of a very high order. Dinner specials here may include Kalbi Glazed Salmon for $14.99 or Hand-Breaded Chicken Tenders Meal for $12.99, with a kids’ portion for $7.99.
And while Kowalski’s prepared-foods options like the Pho and Ramen Bars are popular, there are also sexy speed-scratch items like the Coffee-Black Pepper Marinated Beef Kabobs and the Smoky Alabama Pork on a Stick, ready for the grill.
Turn the tables. So, what is a beleaguered restaurant industry to do?
Well over a decade ago as restaurants struggled to recover from recession, a panel of supermarket chefs spoke of the burgeoning opportunity for their segment and freely admitted to using restaurants as their R&D kitchens. They watched what worked on the menu and then figured out how to adapt it for their stores.
Given shifting dining dynamics, maybe restaurant chefs should spend more time in their local grocery stores, especially those with best-in-class merchandising programs.
Pho bar, Kowalski's | Photo: Nancy Kruse.
If they venture into Kowalski’s newest location, for example, they’ll see the impact of TikTok in items like the ready-to-heat Lasagna Soup, and they’ll see their own influence reflected in options like the trendy Hawaiian Chicken Panini.
They will also find the nifty cookie warmer in the in-store bakery. The perpetually warm surface is covered with sheet pans and tongs that invite consumers to help themselves to an extra-comforting treat. Technomic has reported that cookies consistently rank at the top of our favorite desserts, so how can restaurants adapt the idea, add value and enhance the sensory appeal of a proven patron favorite?
Then there are the gorgeous Watermelon Tenderloins, which are simply large, seedless slabs of the seasonal fruit, pre-sliced and prepackaged. Seriously? This is some audacious produce branding that comes with an audacious upcharge, and it’s right out of the restaurant playbook.
Watermelon Tenderloins, Kowalski's | Photo: Nancy Kruse.
Emphasize the experiential. Grocers regularly tout the importance of the “shopping experience.” It’s their buzzword du jour, and some, like the Fresh Market chain, specifically invoke the restaurant experience to describe initiatives like an in-house coffee roastery and cafe.
Similarly, Lunds & Byerlys, another top competitor in the Twin Cities, aims to create a “prepared foods destination” with an engaging new store that includes eight self-serve taps that dispense local craft beer.
But at the end of the day, these are still grocery stores. Like limited-service restaurants, they struggle with speed of service for convenience visits, generally without benefit of kiosk ordering or drive thrus.
And unlike full-service restaurants, they lack the expected ambiance and hands-on service levels of true experiential dining. Smart restaurateurs are shoring up both with a helping of show biz on the side, as with the newly revived Steak & Ale in suburban Minneapolis. While the venerable casual-dining brand is being retooled for a contemporary audience, there are smart classic touches, like tableside preparation of signature Irish Coffee and Caesar Salad.
Amp up the menu R&D. At their best, restaurant menus are damn tough to duplicate at home, whether it’s limited-time offers like the current Shishito Brisket Hash with blistered shishitos and smoked, hand-pulled brisket at First Watch, or the Weekly Taco Feature at Velvet Taco that covers the culinary waterfront 52 times a year with memorable features like the Potsticker Taco that combined seasoned pork with Sriracha aioli and kimchi slaw among other ingredients.
Deep South Biscuit, Another Broken Egg Cafe | Photo courtesy: Another Broken Egg Cafe.
The whole fried-chicken-sandwich-and-wings thing that is pretty much owned by restaurants. You can’t swing a wing without hitting a new entry, and we’re definitely not sweating over a hot frying pan in our home kitchens.
A steady stream of innovation continues to produce winning concepts Taco Bell’s Big Cheez-It Crunchwrap Supreme, which boasted a Cheez-It cracker 16 times the size of the one found on supermarket shelves, or the Deep South Biscuit from Another Broken Egg Cafe.
This terrific limited-time special consisted of crispy chicken tenders, pimento cheese, an over-medium egg and bacon jam, all on an over-sized biscuit. And yes, it was served with the requisite pickle on the side.
What next? Well, if history serves as a guide, the time will come when consumers tire of cooking at home and inflation has cooled enough to warrant more frequent restaurant visits. We need to be ready. Because, while frozen renditions of, say, Korean japchae noodles can serve to whet the appetite, a frozen dinner nuked at home simply can’t compete with the quality and craveability of the restaurant item that inspired it.