The rise of the grocerant

Supermarkets are raising the bar on their foodservice offerings, giving rise to a concept known as the grocerant, a cross between a grocery store and a restaurant, and attracting the attention of the coveted millennials in the process.

Research by The NPD Group has found that restaurant-quality and fresh food, chef-driven menus and in-store experiences have inspired millennials — those who reached young adulthood around the year 2000 — to visit and spend.

In-store dining and take-out of prepared foods from grocers has grown nearly 30% since 2008 and accounted for 2.4 billion foodservice visits and $10 billion of consumer spending in 2015, according to NPD’s foodservice market research. Over 40% of the US 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 NPD report A Generational Study: The Evolution of Eating, which examines how eating behaviours of key generations are set to change as they move through life stages. The study examines the influence of age, generation, life stage and values on current and future eating behaviours.

Consumers rate visits to grocerants higher than traditional quick-service restaurants on variety and healthy options. These attributes are among the most important motivators of purchase and customer satisfaction to prepared foods consumers. Grocery prepared foods are also rated higher on freshness and quality, which NPD says are attributes particularly important to millennials.

Grocerants also appeal to millennials by offering them an experience, with many grocers offering restaurant-quality food at a lower cost than full-service or some fast-casual restaurants, in specialty categories like Asian, seafood, Italian, Mexican and barbecue. A growing number of grocery stores provides comfortable, casual seating for in-store dining and some incorporate a full-service restaurant.

“Millennials’ interest in the benefits and experience supermarket foodservice offers will continue to be strong over the next several years,” said 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.”