Mar 15, 2019 11:20 AM EDT
Millennials, the tech-savvy, information fueled, WiFi-is-life generation, are causing an enormous shift in the world of grocery shopping. However, this shift actually has nothing to do with the internet, gadgets or even information. Since this generation is living a fast-paced life full of instant gratification, it is understandable why Millennials would prefer to buy ready-to-eat meals than shop for separate ingredients. Or at least do it within the same establishment. So naturally, the food industry must supply a service to feed the demand. In comes the grocerant. The term is a hybrid of the words "grocery" and "restaurant" and is basically just that, a grocery store that sells prepared meals. Dine-in or take-out.
The numbers don't lie. Price wars constitute the other driving issue for grocers. Food retail prices barely move. But the price of food purchased at restaurants have increased significantly, and have been known to more than double the general inflation rate. A study shows that in 2016, grocerants witnessed over 10 billion dollars in sales. Over 40 percent of the U.S. population purchases prepared foods from grocery stores. The trend has been compared to the innovation of the drive-thru window.
The drawing factor of this new service is not only the convenience, but the choices. Many grocers now offer food in specialty categories like Asian, seafood, Italian, Mexican, and barbeque, and some offer comfort foods like meat loaf, pastas, pot roast, and more. Grocers are aiming to cater to all dining needs, including hot, custom-prepared grilled meat, food bars, soups, and sushi. A growing number of grocery stores also provide comfortable, casual seating for in-store dining.
Although Millennials are playing a major part in spurring this shift, they are not the only generation helping to sustain it and make it a permanent staple in our way of life. Families with older children seem to really appreciate the enhanced grocerant experience, while aging baby boomers need the convenience.
Large supermarket chains are also taking full advantage of the grocerant's business opportunities. Supermarket mega-brand Albertson's purchased the five-year-old American meal-kit company, Plated, for over 200 million dollars. Mega purchased Miss Fresh and other grocers are expected to follow suit. In processing as well, Campbell's Soup, Unilever and many others are investing in meal kits to explore what could become a 10-billion-dollar industry in the near future.
Given that Millennials seek convenience over most other aspects, two worlds are currently colliding in the ready-to-eat space at grocery stores. But not just Millennials, its fair to say that everyone wants an experience which caters to portable solutions to help accommodate our daily lives.
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