What's New in Retail Food Innovation?

What's New in Retail Food Innovation?
Tags: Business Strategy and Profitability, Food & Beverage, Hot Products, Marketing, Marketing / Branding / Promotion, Packaging
August 9, 2010

What’s new in retail food innovation that the QSR industry can learn from? Plenty!

I recently met with McCormick and Company executives responsible for the manufacture and distribution of their new product called “Recipe Inspirations,” and learned that consumer demand is challenging production capacity. I am sure many food companies wish they had this opportunity.

Recipe Inspirations represents a new venue for McCormick to sell more spices to customers in a new innovative channel, and at the same time deliver convenience to customers. The ‘value concept’ to customers has two components - a recipe card and several perfectly measured spices included in the recipe.

But the success of this product is less obvious to the casual consumer, and reflects McCormick’s keen understanding of customer needs similar to our previous discussion of Apple computers.

This product addresses several customer needs:
• Creative new recipes that add variety to families eating at home.
• Perfectly portioned spices that guarantee recipe cooking success.
• Recipe flexibility. For example, adding crushed red peppers to the Quesadilla Casserole is optional.
• Fresh spices purchased in limited quantities, rather than old spice jars that accumulate on kitchen shelves.
• Spices are individually packaged, so leftover quantities can be used in another recipe if desired.
• An easy cooking format that any family member can follow to help prepare the evening meal.

So what can the QSR industry learn from McCormick’s retail success?

First, be willing to enable customers to create your core menu products at home, and still profit from this business option. The QSR industry already practices this principle in part through offering home delivery and takeout customer options.

Many chains such as Boston Market and TGIFriday’s also sell restaurant menu products through retail grocery distribution channels. Other chains place their brand on complete salads and sandwiches sold in airport or convenience store venues.

But QSR chains can take it a step further by providing make-at-home recipes that includes ingredients customers can purchase at their stores or on retail shelves. At the end of the day, the QSR makes that all important ‘emotional connection’ with their customers.

Second, be willing to let go of product and brand equity dilution. If your product quality and brand equity are strong to begin with, then what is the worry?

I remember flying on a plane with the president of Boston Market when we first discussed selling Boston Market products in grocery stores – including its signature mashed potatoes. As we discussed the opportunities, the thought of brand dilution never entered the conversation. Instead, we were excited about creating new distribution channel opportunities for QSR branded products.

It amazes me that grocery stores sell so many branded products such as Stubb’s Bar-B-Q products and Paul Newman’s dressings, yet so few QSR brands show up on retail or convenience store counters.

Another example of strong brand licensing power use is Thanasi Foods based in Boulder, Colo. The company applies well-known brands, including Jim Beam, Frank’s Red Hot Sauce, Vlassic, and Stubb’s brands to their line of meat jerky products. I don’t see why a similar company couldn’t label their products with QSR brands.

Is there more QSR chains can learn from major retail brands? Yes! It all begins with a keen understanding of consumer needs, and the willingness to let your brand fly to new heights.