The Fight for the Food Dollar

There’s a fierce battle going on for the food dollar, but consumers don’t see they’re in the middle of it.

We’re quick to define this war as being internal to the food industry: U.S. census data from 2015 notes that restaurant spend ($54.9 billion) outstripped grocery purchases ($52.5 billion) for the first time. But really, it should be about fighting for and making consumers happy.

For consumers, it’s all about taste, value and experience, oh, and convenience. When they want something, they want it fast and hassle free, and when it comes to dinner, it would be helpful if someone could help them decide what they want. Shoppers don’t think in terms of channels the way the industry does. Club store chain Costco, for example, sells 70,000 rotisserie chickens a day. Costco doesn’t excel in grab-n-go, but it sells affordable, good tasting chickens, so shoppers decide the inconvenience of parking and wading through the big box is worth it. 

Grocery retailers aren’t really clear on their place in this internal battle, either. Most don’t think of restaurants as a chief competitor. Interestingly, restaurants very much see grocery retail as the competition, and they will respond to the rise of grocerants.

The increasing investment grocery retail is making in fresh-prepared and the opportunity of providing consumers with high quality meals in their homes is a hot topic at International Foodservice Manufacturers Association’s (IFMA) Presidents Conference in Scottsdale, Ariz. According to data from the National Restaurant Association, 50 percent of consumers say they’d like to have restaurant quality food at home. Just 5 percent say they’re able to get it. That’s a huge opportunity for grocery retail, and for restaurants.

Market research firm Mintel reports that most Americans prefer to eat at home: 41 percent order in to watch television; an additional 25 percent prefer to eat alone. Overall, Mintel reports, 45 percent of Americans of all ages have ordered restaurant delivery of some kind during the past three months.

Fresh-prepared offerings, whether they comprise the entire meal or a portion of it; whether they come from a subscription service, a restaurant, the grocery store, or another channel, is the wave of the future. Smart players will look at the spectrum of opportunities and find their place and their share of the food dollar.