The Latest in Grocerants: Kroger's On The Rhine Eatery
Go for the dining stay for the groceries: With modern households evolving in their shopping, cooking and eating habits, how can grocers innovate in step with changing consumers? Kroger certainly seems game to try. Following on its experimental premium grocery format Main & Vine (shuttered in 2017), Kroger recently launched a combination food hall/supermarket in its hometown of Cincinnati.
Called On The Rhine Eatery, the venue features five restaurants offering Asian, Western, barbecue, American bistro and food truck-style fare. Indoor and outdoor seating can accommodate up to 200 customers, and a full-service bar serves cocktails, local beer, wine and bourbon. While the merger between a food hall and grocery store is relatively unique (and offers a slightly new hybridizing of the "grocery restaurant"--or grocerant), many grocers including Mariano's, HEB Central Market and Wegmans have been busy meeting the changing eating, cooking and food shopping needs of consumers for some time in this space. Other food retailers have certainly taken notice and are experimenting with their own premium, grocerants. As we noted in our 2017 analysis America's Supermarkets in Transition, “Shoppers want more stores that are perimeter first or fresh first. While new retail formats such as Main & Vine (Kroger), 365 by Whole Foods Market, Simply Fresh and bfresh (Ahold) are still at the experimental stage, the trends in broader food culture and supermarket dollar growth support these kinds of experiments.”
Stas Shectman, Hartman Group's Director of Strategic insights, recently discussed Kroger's new store in a Hartman Group podcast and notes:
"We've certainly talked a lot historically at Hartman Group about the grocerant trend, where grocery stores are trying to capture immediate consumption occasions and battle with food service for the changing ways that shoppers are eating ... Food halls themselves are an interesting part of urban revitalization in which food is a big driver and engine that speaks to how we are thinking about where we live, how we interact and the role of food and food retail in our lives. So there's now a response from both food service and the retail landscape that reflects how modern households are living and eating: It's this emphasis on higher quality, fresher, more inspirational and experiential experiences, that seems aware of declines in desires to cook on the one hand and on the other a rise in the diversification of everyday eating occasions. Kroger's new store seems a potentially winning strategy for adapting to broad shifts among consumers that we're seeing at The Hartman Group. Notably, the shifting logic of food shopping where we've seen eating really become the defining force of how shoppers shop for food. In our research we've also heard some consumers refer to shopping as a kind of a social activity--shopping together, turning what is kind of a mundane weekly chore into an opportunity for connecting and spending quality time together.”
Food retailers looking to capture some of the magic of fast-casual restaurants and other food service competitors for their grocerant offerings might consider these key points:
· Make freshness a continuous line across all consumer touchpoints. The fast-casual channel has already taken the lead in innovating around freshness via open production, customizability and made-to-order food.
· Ensure that atmosphere and design around in-store dining and serving areas are fully integrated into the eating experience. Among fast casual's many disruptive innovations has been the ability of such restaurants to integrate design, décor and atmosphere into their brand identity and narrative.