Expanding to Grocery: Should You Do It?
Normally we save these posts for our sister site, MenuCalc, which serves the restaurant and foodservice industry. However, as of late the lines have begun to get a little, shall we say, blurred? In the wake of the coronavirus epidemic that has swept the globe, definitive food business models have begun to fade away as hybrid options make their way to the forefront. So you may be reading this as a food manufacturer or a restaurant establishment wondering to yourself, what exactly are the new rules in this new marketplace? Truth be told, there are none. So if you are thinking about exploring your options and expanding to a grocery model, now is the time. And if you are a manufacturer, distributor or supplier, you may find that this article provides you new insight into how the industry is changing and how you can pivot as a result. Regardless of your current position, you are undoubtedly in flux — and that’s why we need to stay astute on the trends and changes. And by now, you should know that you can always find them here. So without further adieu, should you expand your food establishment to include grocery items? You decide.
Find out why expanding to grocery retail is a bold but excellent business move.
Grocerants
If you’ve been reading our articles, we’ve covered grocerants in the past. In a different time and marketplace climate, this term used to describe grocery stores that have expanded to include eat-in areas, so you can dine while you shop. And is there really anything better than holding a glass of wine while you peruse the aisles? We think not. And grocery chains such as Whole Foods and Mariano’s think this is a fabulous idea as well.
However, just a month into the COVID-19 pandemic, as dining area had begun to close nationwide, small cafes and even large food service chains such as Panera saw a unique opportunity to fill in the gaps of their own revenue losses and supply what the local grocery stores were having trouble making available: toilet paper, milk, eggs and other essentials that were high in demand. And now that more and more restaurants have found their revenue severely impacted by the safety restrictions, they have begun to pivot to include everyday grocery items in their retail offerings permanently.
Pivoting
So how hard is it to begin including grocery items alongside your typical menu items? Pretty simple actually. As a food service business, chances are you have an established relationship with a food supplier that provides all of the ingredients for you to whip together your delicious menu items. Now, imagine expanding that relationship and redefining your services to include curbside grocery pick-up. In fact, expanding to grocery is so simple in nature that even stay-at-home moms are trying their hand in grocery supply by creating pop-ups to supply food to their local neighborhoods!
A stay at home mom banks on the pop up grocery model in Colorado Springs. (Picture credit: The Colorado Springs Gazette)
On the flipside, if you are a food manufacturer, your options have just opened up past grocery store shelves and online direct-to-consumer sales. Now you can skip the wholesale distribution process and go straight to the vendor themselves. The opportunities in this new market are absolutely endless.
The important thing to remember that although the rules may be a bit loose, it is imperative to follow the guidelines set forth by the FDA regarding proper food labeling of retail grocery items. (This is what we do, we’ve gotta make sure you’re compliant!). With easy to use labeling platforms like LabelCalc, you can easily expand to grocery while ensure that your products are in line with current FDA guidelines. And if you’re creating grab-n-go menu items, well, that’s even more reason to make sure you have a good labeling system in place!
So, is it easy to pivot to grocery? We say yes. Should you do it? Also yes.
