What does the future of groceries mean for hospitality?
It seems just a few years ago that Australian households really only had 4 main retailer types to choose from for their weekly grocery shop.
1. Purchase from “the big 2” supermarkets, Coles and Woolworths
2. A local small chain supermarket such as IGA or FoodWorks
3. Buy from a combination of local greengrocer, butcher, baker and specialty stores.
4. Visit a market or farmers market
Two things changed that model – firstly, the entrance of competitive international chains such as ALDI and Costco, who dramatically increased the products on offer, pushed for lower prices, and added a novelty factor. Secondly, the rise and rise of the internet, online shopping and shopping cart facilities.
The entrance of overseas players didn’t really break the time honoured mould of the traditional grocery store. However, what it did do was put a wedge into the door of opportunity, using size and buying power to somewhat reduce the chokehold that the big two, often accused of running a duopoly, held over the Australian market.
At the same time the insinuation of the online world into every aspect of our day to day lives meant that consumer knowledge and sentiment was easier to share (consider the boom of paleo, sharing of ethical farming information, and access to a broader global consciousness), and more importantly, that virtually anyone could become a merchant overnight.
Now the landscape of grocery shopping is changing, both in Australia and globally.
Convenience
Farmer’s market services put fresh produce at consumer’s doorsteps – literally. From Aussie Farmer’s direct to CERES fair food (which only provides organic produce) households can now access seasonal, farm-gate style produce on a weekly basis and a relatively low cost. Some services even provide free delivery. Hello Fresh provides a box of groceries along with a recipe card that home cooks can follow themselves, and other services such as Kelly Cube go a step further, providing the exact portions, seasonings and sauces required to cook a meal in 15 minutes.
Accessibility
Fresh, organic, local and ethical products are all more available, with local small scale producers supplying either direct to public or through small cooperatives and initiatives like Ceres. Small herd free range meat is available, along with artisanal sausages, cheeses, and alternative products like cashew cheese.
Gourmandism
Many of these convenience products not only meet ethical sentiments but tick the required boxes to be a ‘gourmet’ or top shelf product. The Australian consumer palate is getting more selective.
Supermarkets React
These changes have been felt by supermarkets and the reactions are everywhere you look. Organic produce, gluten free options, and premium lines such as “Coles finest” meats. Small local and overseas supermarkets are reacting even more strongly, with a Danish supermarket that sells only ‘expired’ but still-edible food [1] to reduce waste, a Berlin supermarket with a hydroponic herb farm [2] where a gondola would normally go, and an Adelaide supermarket that puts on live music [3] winning best in the world. International studies [4] confirm that authentic fresh foods and convenience items lead the way in critical trends.
The Impact on Hospitality
What do these changes to the grocery industry mean for hospitality?
When convenience foods such as pre-prepared gourmet meals that can be cooked in 15 minutes are accessible for not much more than a grocery bill, the role of eating out and takeaway is somewhat reduced in filling the convenience gap. More importantly, access to farm-fresh food and local, seasonal, organic produce puts greater pressure on restaurants to hold to an even higher standard. When paying for a special night out, consumers expect to receive something more than what they could access at home. The higher the quality of household groceries, the higher the bar gets set.
It will continue to be increasingly important for restaurants to provide innovative, fresh, and seasonal menus that demonstrate ethical and sustainable values, and to fill other emotional needs than just convenience.
[1]http://concreteplayground.com/sydney/food-drink/food-2/this-danish-supermarket-is-fighting-food-waste-by-selling-only-expired-food
[2]http://mashable.com/2016/04/07/supermarket-farm-berlin/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Mashable+%28Mashable%29#cXQrCDsxFPqP
[3]http://www.adelaidenow.com.au/news/chapleysowned-frewville-foodland-supermarket-named-best-in-the-world
[4]http://www.chainstoreage.com/article/five-emerging-trends-supermarket-retailers-leverage-01