May16Pizzeria Marketing: A New Goliath, A New Reality
A (not so) Funny Thing happened at the 2012 Pizza Expo
By: Mark Sibilia, May 2012
At the recent Pizza Expo I ran into what looked like a very important delegation scouring the aisles of the trade show. You know the kind I mean, all wearing pinstripe suits looking distinguished and purposeful. Leading them was an easily identifiable top executive marching in front of his pack. My curiosity got the better of me and I approached the group and introduced myself. I asked their leader who they represented and without hesitation he pulled out his business card which read "Senior Merchandise Director, Café, HMR" (Home Meal Replacement) along with the logo of a very well known major Super Club Store. A little taken aback at their presence, I asked how they were enjoying the show and their main reason for being there. The answer was short and sweet;
"To learn how to think like a restaurant."
While catching my breath to give myself a second to think of what to say next, I asked (as though I didn’t know), what do you mean "think like a restaurant?" The Director answered nonchalantly, "We are a chain of superstores who realizes the opportunities in the RTE category along with all the other Superstores and Supermarkets who are also entering this space, and to win in the QSR game we need to think like restaurants". He went on to explain that this new reality created by the recession has forced many consumers to reduce their restaurant visits and cook at home, so by default they have increased their visits to supermarkets. "We saw an opportunity to sell customers prepared foods at lower costs while offering them the convenience of a one stop total shopping experience and it is paying off handsomely and growing all the time… and, we want and need them to keep coming back after the recession. Our goal is to use the prepared foods sector as a value added service to keep them coming back. Then he continued with his home run and final statement…"It’s all about creating consumers’ habits my friend and habits are hard to break!"
That was enough for me. It all came together in that instant and for the first time I stood there feeling like David facing Goliath.
Not only does the pizza and QSR industry have a healthy and ever changing competitive environment, there is a new and very real and committed threat that has come to the party!
As a marketer in the Pizza and QSR industry it is imperative that I keep current on emerging trends, opportunities and threats to our industry. Like many of you, I have recently read a number of articles on the launch and exploding growth of Supermarkets into the Home Meal Replacement and RTE category since the recession has begun. These Supermarkets are in a race between themselves to see who can outdo each other in the prepared and fresh to go sector to win the grocery shopper, and in the process, they are bleeding the QSR industry of billions of sales dollars.
The good news is that it’s still early in the game and much could be done by the QSR industry to minimize the pain as it currently boasts 120 Billion in sales compared to the "Ready to Eat and Fresh to go" sectors of the Supermarkets which is at $14 Billion. But The QSR will have to act fast and I can assure you of a food fight like you have never seen.
There are a number of strong factors at play and you need to be aware of them. According to the article links listed below:
- One article suggests that 50% of all pizzas are now sold through Supermarkets in the Atlanta area
- Supermarkets’ RTE sector is exploding at 7% per annum.
- According to current trends, Supermarkets could potentially grow their RTE sector to $50 Billion dollars in the next decade and guess where the majority of this business is expected to come from.
- The players involved are on a massive scale.
(For more details please read: Prepared Foods and Ready-to-Eat Foods at Retail: The New Competition to Foodservice (MarketResearch.com) & The Ultimate Food Fight (QSR Magazine)
So the big question here is: How will you compete? And what tools or ideas do you have in your arsenal to ensure you are not one of the casualties in this fight? My answer to that is: "There are always definite ways to win any war especially in today’s highly competitive environment". In this series of "Sibilia Says" articles I will introduce some radical ideas to help the Pizza industry. Radical is what it is going to take to compete against this "New Goliath". You need to be creative, and use any potential advantage you can find and perhaps even think outside of your comfort zone.
So here is the first radical thought: The restaurant or yes, even the pizzeria across the street is not your competitor any longer but rather your ally. It may mean that many of you in the QSR industry will need to huddle together and work as a united team against this "Goliath". The goal is simple; bring people back to enjoy the restaurant experience and go back to the better ways of getting served a great meal by great friends. I will explore this and other ideas in my next installment.
Mark Sibilia is the President and CEO of MPP Marketing Group. For over 25 years Mark has developed, managed and executed award winning QSR and Pizzeria marketing campaigns for national, midsized chains. Additionally, Mark is an author and lecturer dedicated to the creation of innovative marketing solutions for the Pizza and QSR industry. Article also published at EzineArticles.com
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