The supermarket kitchen is heating up as more retailers are offering their shoppers hot, fresh meals fit for a restaurant table. In the age of the “grocerant,” retailers are revamping their kitchens to serve customers a variety of delicious options while also giving them a place to eat in-store.
Retailers are paying a lot of attention to the foodservice side of the store because, if done properly, it can be a gold mine, according to Kari Fulton, VP of national accounts for retail at Menomonee Falls, Wis.-based Alto-Shaam.
“The perimeter of the store has been growing for a while, and the grocerant concept continues to be big,” she says. “Retailers can see 30-40% margins in those areas, whereas the profit margins on nonperishables generally are around 1%.”
Adapting to Change
The evolutionary growth of prepared takeout and fresh food items has changed the way people see grocery stores, says Deirdre Flynn, EVP of Chicago-based North American Association of Food Equipment Manufacturers, adding that the change has brought with it myriad equipment and supply opportunities, including high-speed ovens, beverage dispensing equipment, hot- and cold-holding equipment, serving pieces and more.
“All grocery stores, in our opinion, are adapting to the changing needs and customer demographics,” she notes. “And this change is prevalent in small and large chains as well as independent stores across the country.”
Macey’s Fires It Up
Retailers are taking advantage of these growing foodservice opportunities and using them to create extraordinary prepared food sections akin to food halls. For example, Associated Food Stores’ Macey’s division recently opened a new location in Murray, Utah, that boasts an Asian wok, a sandwich and wrap counter, and its crown jewel—a fire pizza oven. The response to the retailer’s elaborate foodservice area has been so great that it opened another store Nov. 1 in Holladay, Utah, with identical features.
Mollie Snider, culinary specialist for Salt Lake City-based Macey’s, says the retailer went big in its new foodservice department as part of its commitment to provide the change needed to shoppers who are busy and are looking for convenient meal solutions for their families.
“Adding an in-store restaurant with chef-created dishes provides the convenience and quality our guests are looking for,” she says.
Taking Advantage of Trial and Error
When designing a kitchen, retailers must first decide what types of food their shoppers will like. This can be tricky, and often is best accomplished through trial and error. William Buck, national corporate chef for Rolling Meadows. Ill.-based Rational USA, says that for operators trying new concepts, it’s important they select equipment that is multifunctional and offers flexibility. He adds that this equipment must also be user-friendly and offer a return on investment through labor, food cost and energy savings.
To help retailers experiment with ease, Rational offers a SelfCookingCenter that can automatically cook an array of food items, as well as detect the state of the food and how much is being cooked, and make any necessary adjustments to the cooking process.
“Retailers need to do research and stay on top of the trends, which are very regional and ever-changing,” Buck says. “The Rational SelfCookingCenter offers retailers the ability to try new things without having to purchase additional equipment for their production areas. The SelfCookingCenter can handle different cuisines, from barbecue to Asian or pizza to Latin and everything between, whether it is farm-to-table or heat-and-serve.”
Once retailers understand the type of foods their local demographic enjoys, they can start getting creative with their offerings. For example, Tami Olson, national account sales for retail with Alto-Shaam, says one retailer the company works with was considering different concepts, and turned to its in-house butcher shop for inspiration. The retailer then began offering cooked and smoked meat available for grab-and-go right in the meat department.
“We offered them a solution with our Cook and Hold ovens where they can load all the product the evening before and cook it overnight,” Olsen explains. “This not only improves the quality of the meat, but they are able to hold it for a long, extended amount of time within their merchandisers.”
Once a retailer has ironed out all the kinks in its kitchen to create a stunning spread, some shoppers may be so impressed that they will want to eat the food on the spot while it’s still hot. By offering seating, retailers can turn the grocery store into a destination, where a family can dine together and—even better—grab groceries for their weekly needs while they’re at it.
“You look back a few years at most stores, and there was never a seating area in a grocery store. No one ever even thought to go to the grocery store and eat,” Olson says. “Now we’re seeing it much more often, where retailers are trying to develop their foodservice program and inviting people in to have their lunches and dinners within the stores themselves. “
While this novel concept sounds great, retailers must also make sure they’re not overdoing it. Taking up too much space with seating—instead of using that space for something more profitable—could be a fast way to lose money.
“Because retailers calculate their profits by square footage of the store, they have to be very careful about how much seating they put in there, as it has to pay them back,” Alto-Shaam’s Fulton warns. “But, they definitely are changing and growing because they do feel it’s profitable to have a place for people to sit down and eat.”
Cooking with the Cloud
Grocery store leaders are often busy people who rarely have time to monitor the goings on in the kitchen or travel to locations for training. Modern foodservice companies understand this, and have been creating digital innovations to help make their services available at all times.
For example, to help put busy supermarket staffs’ minds at ease, Rational created its ConnectedCooking program, which allows management to monitor what is going on in the kitchen from any location using a smartphone, tablet or PC.
The service allows owners of Rational’s SelfCookingCenter to not only monitor the food that is being cooked via the cloud, but also update or modify their cooking programs whenever and from wherever. Customers can monitor HACCP information and set up notifications for any service or maintenance needs, ensuring their kitchen is running optimally and securely. In addition, Rational has recently released a free training app, which can be downloaded using any Android or iOS device.
Rational is not the only company helping retailers cook using the digital world. Puratos, an international manufacturer of innovative bakery ingredients, recently launched its Virtual Innovation Center to make experts available to retailers 24/7. The center can provide customers with one-on-one assistance on every aspect of product development through live chat sessions and a recipe database.
“We want to help our customers to create the products and solutions that allow their business to become even more successful,” says Group Communication Manager Philippe Arnauts. “The Virtual Innovation Center is instrumental in making this happen 24/7 from anywhere in the world.”
In addition to these features, the Puratos 360-degree virtual tour brings the physical Innovation Center directly to the customers’ workspace. The virtual walkthrough allows retailers to explore the center and discover some of the available services of Puratos without having to travel to the location.
6 Tips to Build a Fantastic Foodservice Team
Having a high-tech kitchen and delicious recipes is great, but it’s all for naught if a retail foodservice program lacks a team that’s not up to the challenge. To help grocers ensure their staff is competent and able to prepare the best food in an efficient manner, the National Restaurant Association dishes out the following tips:
1. Recruit the best talent from the area by sourcing from nearby restaurants, culinary and hospitality schools, and other foodservice settings. Additionally, use social media messages to play up positive culture and perks, such as the opportunity to work less grueling hours than a restaurant setting.
2. Source from within by finding the best candidates from the meat, seafood and produce departments who would jump at the opportunity to work with prepared foods.
3. Empower grocerant leaders to assemble their teams and hire to fill specific skills gaps, and let them be picky about which staff serves customers directly as long as back-of-house duties are also managed professionally.
4. Commit grocerant leaders to budgets, which NRA officials say should allocate at least a 30-35% share of revenue toward labor costs. Grocers should also keep in mind the rising minimum wage, the need to pay competitively and the importance of hiring right the first time to minimize costly staff turnover.
5. Impose rigid training policies for food quality and production, food safety, cleanliness, documentation and overall integrity—especially in open work environments where customers see most of what goes on.
6. Keep millennials visible on the team to relate to other millennials. This can be facilitated by creating policies the younger crowd will appreciate, such as opportunities to broaden their skill sets and taking their suggestions seriously.