Super restaurants could be the word that well represents the new chapter in the hybridization of supermarkets. In just a few days, the case of Kroger, the historic giant of American distribution (2800 supermarkets, double those of the entire Coop Italia network) has already set a trend.
SUPERMARKETS, KROGER’S BET
The health emergency urges all catering and distribution players at establishing, or even just to safeguard themselves, highly innovative business models. This is an inescapable obligation, well summarized for the food & beverage world in the interview with Luca Venturoli in September 2020.
Kroger is rolling out dark kitchens in two of its stores in Ohio and Illinois. Although we refer to dark kitchens, i.e. facilities closed to the public, those inside the stores are obviously not so. The on-premise kitchen concept, wanted by Kroger, uses about 1,000 square feet of space at each store, intended for the preparation of meals for quick delivery and in-store pickup. Customers can order online from a menu of over 80 meals, scheduling, if desired, the collection at the end of their shopping trip.
The declared goal is to enable supermarkets to prepare and deliver ready-made meals to customers, without traditional catering areas or spaces for take-away food.
THE ON-PREMISE KITCHEN
According to Euromonitor, one of the leading global marketing firms, Kroger wants to establish itself using a format that could be worth 1 trillion dollars globally by 2030. Ghost kitchens increase restaurants deliveries in areas with the highest population density using facilities close to the customers’ homes
According to Dan De La Rosa, Kroger’s group vice president, “The new on-premise kitchen is an innovation that streamlines ordering, preparation and delivery, especially as we navigate an unprecedented health crisis that has affected every aspect of our lives, including mealtime”.
Partner in the initiative is ClusterTruck, a startup that launched its first kitchen in 2016. To date, the first delivery-only kitchen company, as it defines itself, has already been rewarded with 28 million dollars in funding, of which two in its latest fundraising round in July.
ClusterTruck’s proprietary software systemmanages the kitchen and delivery operations so that food is handed over to drivers and couriers for delivery within half an hour from ordering, with a current average lead time of 22 minutes.The software considers every variable, from traffic to where the couriers are located to the availability of dishes in each store. Each kitchen aligns the food preparation so as to finish at the same time (on average within seven minutes after ordering) dishes requiring different cooking times.
Kroger already offers a food pickup service in approximately 2,100 stores. Furthermore, it is not the first to measure itself in terms of consumer services with the dark kitchen format. In very recent times, also Sweetgreen attracted the attention of the market.In September, Burger King announced a restaurant redesign project that shrinks classic spaces and increases the space for take away food packaging and in-car and sidewalk pickup options. In this case, the partner chosen is GrubHub, one of the stars and stripes leaders in food delivery.
However, the size of Kroger, its typical sales set-up (supermarkets) and the particular innovation of the offer compared to the traditional click-and-collect with kitchens inside the stores, have marked a step change.“We’ve done a couple of million orders and never actually talked to a customer before, so this is sort of a new one for us”, said Chris Baggott, CEO and co-founder of ClusterTruck.
This is a time when many Americans prefer delivery to point-of-sale visits, and many stores have had to close or severely limit operations due to pandemic restrictions.After dark stores, retail discovers dark kitchens as an opportunity to develop in order to reach customers in isolation.Not surprisingly, in the second quarter of this year, Kroger saw a 127% digital sales increase, thanks to consumers opting for online orders for delivery, shipping and in-store pickup.
Almost three years ago we wrote on these pages that “…food dictates the new trade rules. Omnichannel is already almost history, now supermarkets have to find their new identity between distribution, catering and services”.Evidently, even if super restaurants were then not yet on the agenda, the objectivity of the process was not in doubt and the pandemic has only accelerated it.