The “Grocerant”. Restaurant-quality, fresh food offered within the convenience of a grocery store setting. And unlike the catchy, hybrid names of famous celebrity couples, this concept is here to stay. Retail grocery chains are raising the bar on their foodservice offerings and by doing so are attracting the coveted Millennial generation, according to recently published research by The NPD Group.
In-store dining and take-out of prepared foods from retail grocers has grown nearly 30 percent since 2008, and accounted for 2.4 billion in foodservice visits and $10 billion of consumer spending in 2015, according to NPD’s recently released report, A Generational Study: The Evolution of Eating.
Over 40 percent of the U.S. population purchases prepared foods from grocery stores, and while Millennials use grocery stores less than other generational groups, retail foodservice is gaining traction with them, according to the study that examines the influence of age, generation, life stage, and values on current and future eating behaviors.
“Millennials’ interest in the benefits and experience supermarket foodservice offers will continue to be strong over the next several years,” says David Portalatin, vice president, industry analysis at NPD Group. “This forecast bodes well for food manufacturers and retailers who have their fingers on the pulse of what drives this generational group. Give the Millennials what they want — fresh, healthier fare and a decent price — and they will come.”
Within the study, consumers rate visits to “Grocerants” higher than traditional quick service restaurants on two factors — variety and healthy options. These two factors are among the most important motivators of purchase for prepared foods consumers. Grocery prepared foods are also rated higher on freshness and quality, two things that are especially important to Millennials. According to the NPD generational study, which examines how eating behaviors of key generations are set to change as they age over time, freshness will remain an important factor in Millennials’ eating behaviors as they go through their life stages.
“Grocerants” are also appealing to Millennials because they offer them an experience. Many grocers now offer cafe-seating with restaurant-quality food at a lower cost than full service or some fast casual restaurants.
As food retailers look to expand this experience beyond seating or menu options, building out food transparency and enhanced food safety within this growing market is critical. Just as consumers are demanding supply chain transparency from restaurants, the same demands are being placed on retail grocers.