Food retail dream team brings shoppers some “wow!”

The world does not need another conventional grocery store. There are plenty of them offering similar, somewhat rote and unremarkable shopping experiences and product assortments. One to another they defy uniqueness and differentiation. Food retail legend Bob Mariano and his long-time partner Don Fitzgerald teamed with DOM Capital Group owner Jay Owen to reinvent the Chicago food retail landscape. Again.

The food retailing industry has long admired Bob Mariano’s penchant for innovation when his namesake Mariano’s chain emerged in 2010 as a refreshingly-elevated concept in the Chicago area grocery game. Mariano, who described his new retail banner as “the first time I’ve had the opportunity in my career to invent a retail concept from a blank sheet of paper,” deftly integrated foodservice experiences with a decided heavy lean into an improved fresh and perishable food assortment and tasting station-oriented shopping experience.

After selling the Roundy’s parent company in 2015 to Kroger, Bob Mariano departed the Chicago retail scene for a while, apparently to go think creatively about where the food retail innovation ball should roll next.

Now Dom’s Kitchen & Market arrives in Chicago’s Lincoln Park neighborhood as a 17,800 square foot, tightly edited and curated deep dive into food adventure. It is shopping as entertainment with a big helping of culinary inspiration and a side order of education for erstwhile home chefs. “For the most part grocery shopping is functional and stock-up driven,” said CEO Don Fitzgerald, “Our new concept is built around what we can do to deliver food discovery, experiences, culinary exploration and maybe learning a thing or two for people who love food.”

Dom’s is first and foremost a food destination. As you walk in, guests see a hybrid of multi-faceted food service options featuring top quality menus ranging from “The Stackup” for elevated sandwiches, “The Hearth” if you feel like outsourcing cooking chores for dinner and “Gohan” to sample Asian specialties like Yuzu Salmon and Katsu Sando. Nearby is “The Plant Butcher” station for creative salads and yes, butchering veggies to customer specs.

“We are not a replacement for traditional grocery,” Fitzgerald reports. “Our core shopper is really someone who has a passion for food, who is interested in taste experiences, wants to explore new cuisines, learn and has high standards about the quality of the ingredients they use.” He said he expects people will come to Dom’s for a quality sandwich and sip a glass of their favorite wine, all while ordering paper towels and dishwasher soap from Amazon on their phone.

“You’re coming to Dom’s for lunch or picking up dinner. You are doing your perishable shopping here for high quality produce, bakery and meat. We also expect to serve events and occasions like an anniversary, job promotion, graduation, birthday with wine and cheese or a Bonci pizza,” says Fitzgerald.

The center store is a curated assortment of higher-quality packaged foods, some of them hyper local as evidenced by plans to feature endcap displays of new and emerging food brands born at The Hatchery, Chicago’s food incubator and laboratory for aspiring entrepreneurs.

On opening day a power aisle end cap featured Dom’s specialty coffee. It was a fan of the cards toward their plans to develop a deeper offering in private label products that will build the Dom’s brand, thus helping the company more fully express its core culinary mission.

Think big

If history is any indicator, the Dom’s executive team has no small plans and will be working to add new locations around the city and eventually beyond Chicago. “Dom’s is very much a neighborhood concept, a smaller retail footprint where the decisions we make about what’s on shelf are extremely important,” said Fitzgerald. “While we have a template certainly, each Dom’s location will be a mirror of the community where it resides, and the assortment decisions will reflect what we think shoppers in the trading area will want.”

Fitzgerald says they eschew the typical food retail business model dependent on large cap CPG promotional spending. “We won’t be relying heavily on price promotions to deliver volume. That’s not our business. Our goal is to earn loyalty based on the strength of our unique shopping experience.” That shopping experience is best represented in “The Chef’s Table”, a presentation area where visiting celebrity chefs will come to conduct classes on menu ideas and food preparation techniques. “We just had a session on how to properly cook a steak and I learned I’ve been doing it wrong my entire life,” he said. “Teaching will be core to our concept.”

For that matter meat is yet another example of stepping up a notch. Dom’s is sourcing its fresh meat from the same supplier that serves Gibson’s restaurant, one of Chicago’s most respected and beloved steakhouses.

Safety first

Dom’s is the first EcoLab Science Certified food retailer in the state of Illinois. EcoLab is servicing Dom’s with training, sanitation materials and best practices guidance. Dom’s will be audited for compliance to EcoLab’s industry-leading standards of cleanliness. “We want to be the safest, healthiest place to shop and embed that commitment in our culture from day one,” said Fitzgerald.

“When our shoppers leave here, we hope they say, ‘Wow. That was special. That was fun. This was worth my time,’” he said.

If opening week crowds are any measure, people are resonating to Dom’s food shopping-as-entertainment concept, a truly unique addition to the Chicago area’s food retailing landscape.

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Symphony of logistics becomes an orchestra of societal values

For the last 30 years or more, supermarkets have operated as a highly-choreographed dance of sourcing, merchandizing and value pricing all stage-managed with intricate daily replenishing management of same. It is, in many respects, a remarkable achievement that provides the lowest cost-to-quality food on earth in an assortment depth that is the envy of the rest of the planet. The grocery store has stood as an assurance of food quality and availability, yet now arrives precariously at a moment of transformation that is far beyond the mechanics of coming in-store robots, the challenges of e-commerce friction and assorted home delivery platforms.

Strategic shift underway

Food retail may also be the most visible in-your-face demonstration of traditional brand marketing strategies borne of the post-World War II consumer packaged goods explosion; focused on a more impersonal and product feature-and-benefit form of consumer communication.

A sea change started to emerge in recent years based on an evolving consumer mindset driven about what matters most to them on the path to purchase. Witness the emergence of health and wellness as a primary driver of consumer preference, the attention now paid to transparency and supply chain integrity and a growing concern over food safety practices. All of these emerging trends have eclipsed the traditional purchase motivators of taste, price and convenience.

The Great Pandemic of 2020 pushes the envelope of change faster and farther as consumers not only connect the dots between the quality of the food they eat and their quality of life, but now see retailers and brands as active participants in their social and societal concerns and growing activism.

Two fundamental impacts of COVID 19 on behaviors and attitudes

1. The pandemic has served to reveal the inescapable, searing questions of economic inequality, exclusion, racial prejudice and its unfairness while lighting a fire to address and solve these inequities. How this plays out will require sensitivity to the issues and strategic planning to address it openly and visibly in policy, procedure and behavior.
2. On another front, at one time consumers aspired to improvement in their lifestyle through status signaling in conspicuous consumption of brands that elicited those feelings of aspirational identity. However, today this has fallen away, shed by a pandemic that has entirely recalibrated what matters to people. Today a brand reputation is enhanced by its social, cultural and environmental values.

Brands and retailers must add responsiveness to a requirement for higher purpose, generosity in behavior and social improvement to their actions. Do you think this transformative insight has fully translated into how brands and retailers package their story and represent themselves in the marketplace? I would say no. Or not yet, while a few are in the starting blocks and getting ready to claim their competitive advantage.

Recasting the supermarket business model

Here we find ourselves in a moment of mechanization. Robots. Digital ordering platforms. Supply chain optimization. Experiments with drones. Electronic grocery carts. Wringing more efficiency in an effort to get product A into hands B more quickly, efficiently and at lower cost.

Nothing wrong with any of this, except it may inadvertently mask the cultural trend changes that argue for a different priority around how supermarkets organize their business for success and relevance to the consumer they need to keep. Technology has its place, but there is a more human need arising that should be considered strategically, as customer-centric planning becomes a top priority.

Let’s go to the ground on this together, where the food culture ‘rubber’ meets the consumer relevance road:

For over a year we’ve been reporting on the shift to home-based meal consumption and cooking. A fair question then: what does the massive pivot to home cooking mean to supermarkets? We’re not talking about the obvious of selling more products, more often for more occasions.

The intimacy people have with food and its preparation is increasing. There’s another form of ‘closeness’ that is percolating underneath as a potential component of retail strategic uniqueness and differentiation – the two components of sustainable business growth.

People buying food from people

You may recall there was an era prior to the maturing of efficient retail when people knew the sellers and makers.

A relevant story: awhile back I had the honor and privilege of meeting Glen Kohn and his business partner at a networking event staged by Chicago’s impressive food brand incubator, The Hatchery. Later during a deeper get acquainted meeting, Glen spoke in detail about his company Prevail Jerky, an emerging super-premium brand of clean, high quality jerky snacks offering an array of culinary forward flavors.

He told the story of how his wife had food allergy challenges. He wanted to make a jerky his wife and family could enjoy. You see Glen was a smoked meat mastermind who had a personal passion for barbecue, smoking proteins and making his own bespoke jerky. He set out to perfect this high protein snack with a recipe that stripped away the legacy bad-for-you allergenic ingredients and use of nitrates, excessive sodium, artificial flavoring and sugars that dogged this dried packaged meat category since inception.

More magical in my opinion is a preparation technique, and he won’t say exactly how he does it, that improves the eating experience by making the meat less tough and chewy. Ultimately what we have here is another improved, higher quality, better-for-you product in a legacy category, with a personal story behind it. In effect, the food quality is guaranteed through Glen’s personal journey.

Even before the Pandemic sent us behind closed doors and placed an even higher premium on human contact, personal relationships were making a comeback. People want to know who the makers of their food are, where they come from, what they are about and how that translates into the product they’ve created.

• Increasingly, we see the aisles at food retail stocked with new brands built by a person, not an R&D lab or innovation department. What was once a hall of impersonal, faceless brands, is turning into a showcase of businesses that acquire their social value through consumers’ desire to support an actual, real-life maker.

Makers bring with them values, beliefs, mission and unique standards of quality that provided deeper meaning past the better recipe. Here’s the strategic twist: while local sourcing has been popularized recently, this nuance stretches the idea further to what we’re calling Local-ism.

People now look at purchases as a statement of what they believe is important rather than flags of social status and prosperity. They are voting their beliefs and values with their wallet. The checkout lane is a voting booth. They are electing product winners with a voice, face and story. The intimacy with food goes deeper. The sense of community building gains a whole new perspective. The store is an aggregation opportunity for these stories-as-brands and a place where they can be brought to life.

• Now retailers have an opportunity to move past the old-school model of being a seller of boxes, cans and bags off shelves at velocity on hyper-thin margins. Food retail can disrupt itself by becoming a form of neighborhood cooking club that respects the environment and the farm while supporting people who craft new food solutions that come to market with a soul. Doesn’t sound like a distribution center for factory food, does it?

What was once impersonal, transactional and formulaic, takes on some of the pastiche of the corner market where the buyer knows the seller, meets the maker and real trusted relationships take root. This is not in conflict with technology and robotics but is rather an important reflection of consumer insight to better guide retail strategy and banner differentiation.

How to think about this: efficiency only goes so far. Becoming a more human-focused business that embraces the emotional investment people have in food, its provenance and related quality is a path to relevance that beats yesterday’s reliance on store location and lower pricing to create competitive advantage. Amazon may have a tougher time with this kind of thinking.

Recommendations on humanizing food retail

• Optimize your aisles and product assortment to feature local and emerging brands with a maker story.

• Use your content creation platform to provide a voice for their stories – and a real, relevant reason for your customers to feel connected to the products they buy at your store.

• Serve this up in a context that works in people’s lives around meal and snack solutions. That’s the foundation for relevance for the food-savvy consumer.

• Marry and merge your indulgent food strategies with better-for-you as the relationship between these two draws ever closer.

• Look past the coupon to start creating other experiences both digital and in-store that showcase your love for food adventure and culinary creativity. Love of food is something you can immediately demonstrate to your shoppers.

When you become highly differentiated, unique and relevant to people, your need to rely on heavy advertising spend to generate traffic declines. When you become remarkable in your shoppers’ eyes, people talk about their experience. Word of mouth is still the most effective form of marketing outreach at your disposal. It is an outcome of remarkable-ness.

Changing perspective may be hard to do because retail traditions and embedded thinking are more about logistics and efficiencies than experiences and food adventures. When the name of the game for decades has been how can we deliver food most cost-effectively – somewhere, we’ve lost sight of the real people who are buying the food – and meeting their needs beyond assortment and price.

When you can see merit in bringing to life the voices and stories of food makers and create ways for buyers to meet them, it lifts your banner above competing mostly on price and product range. That’s a race to the bottom no one wins and plays right into the hands of the endless digital shelf.

A supermarket chain CEO once said to me, “if you walk our office halls on any given day you may find it hard to determine if we’re in the food or hardware business. So much of what we do is too far removed from emotional connections to food and what people use it for.”

You just need to fall in love with food and its ability to transform people’s lives.

If this conversation gets you thinking and you would like to explore it further with like-minded people, use this link to start a conversation without any expectation of a business relationship save we made new friends.

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Food Retail Innovation Now in Truckee, CA

Raley’s, the family-owned Sacramento-based supermarket company, recently launched a new grocery store concept they envision as a model of how food retail should evolve to build consumer relevance. Located in picturesque Truckee, California, just outside Lake Tahoe, the trading area is populated with families devoted to an active, outdoor lifestyle.

Raley’s designed the store concept with Truckee’s active families in mind – visualizing a supermarket focused entirely on healthy living. The Raley’s O-N-E Market banner (Organics, Nutrition, Education) is a four-walled, 36,000 square foot better-for-you food discovery zone. Designed for people who understand there may be a direct link between what you eat and the quality of your life, the concept mirrors their desire to seek out better choices, explore a more mindful selection of products, and learn about improved nutrition. Remarkably, it is a food store that embodies owner Michael Teel’s higher purpose mantra to “change the way the world eats one plate at a time.”

“We have been on a journey for health and wellness, and Raley’s O-N-E Market is the next step in our company’s transformation,” said Chelsea Minor, Raley’s Corporate Director of Public Affairs. “Raley’s O-N-E Market offers a highly-curated assortment of products that are organic where possible, wholesome, minimally processed, sustainably sourced and offers a stage for nutrition education. We want consumers to understand why these products were selected for our shelves and why they are better options for them and the community,” she said.

Who is really in charge, merchant or customer?

For the most part grocery stores operate in reverse from consumer lifestyle insight.  The shopping design and experience is most often built from the merchant’s business model intended to move boxes, cans and bags off shelves at velocity. Thus, in many ways, grocery stores are entirely recognize-able banner to banner with merchandise schemes and traffic flow patterns that follow a commoditized approach to assortment and shopping experience.

Which begs the question: what if a store format is re-imagined as a reflection of the lifestyle interests of its core customers, instead of the other way around? “The biggest differentiator is our product mix. We emphasize foods ‘free from’ artificial ingredients, colors, high fructose corn syrup, hydrogenated fats and oils and more. We source organic where possible – in produce over 60% of the department is organic to meet consistently high standards for health, nutrition and sustainability,” reports Minor.

As evidence of that commitment Minor says shoppers will not find any conventional soft drink products inside the store. Indeed, sugar awareness is a priority at Raley’s O-N-E Market. Any cereal containing more than 25% of its total calories from added sugar per serving is identified with a ‘Higher in Added Sugar’ shelf tag. Other categories getting the sugar evaluation include Ready-to-Drink (RTD) beverages, pasta sauces, baby food, protein bars and condiments like BBQ sauce and ketchup.

To help consumers make better decisions while shopping, digital screens in the front of the store rotate messages by department providing information on healthier choices. Foodservice areas use window clings and the menu board to help convey this useful information. Better-for-you guidance is also provided in price rails at the shelf to help shoppers make informed purchase decisions.

Retailer as life partner on journey to healthier lifestyle

Raley’s believes the consumer should be equipped to shop with better information and guidance. In an effort to help them realize their healthy living ambitions, the product options they’ll encounter already lean heavily in that direction. In the high traffic meat department, attributes such as organic or anti-biotic free are flagged within an assortment that’s already curated with healthier and higher quality choices in mind.

To help fulfill the Education mission, the Truckee Raley’s O-N-E Market is their first store to have a registered dietitian on-site to interact and coach consumers. Scott Brown, Raley’s first in-store registered dietitian nutritionist (RDN), is there to conduct nutrition tours, provide one-on-one healthy living consults and answer customer questions. Raley’s customer loyalty platform also gets a twist in Truckee: the “Something Extra Health” program offers biometric screenings, classes and in the future will feature vendor presentations.

“Shoppers these days want to know more and are faced with an increasingly confusing environment around navigating claims like ’natural‘ and ’plant based,’” said Minor. “We feel we have a responsibility to help explain and clarify what best practices look like in making food choices. Our role as retailer is to help them on their healthy living journey by operating as guide and coach.”

The future of food retail?

Most satisfying in our conversations with Minor and others at Raley’s was their sense of commitment and passion about what ”changing the way the world eats one plate at a time” truly means and how that plays out when you’re inside the front door. The position Raley’s O-N-E Market takes is active not passive, expressing leadership rather than go figure it out for yourself.

No one is going to beat Amazon on friction-free e-commerce, or Walmart on lower price. We have ample evidence that the middle market in grocery retail is a tough place to do business when the value proposition is based on location (getting weaker to defend) or all-things-to-all-people assortment (not a real strength anymore).

We believe the platform of highly differentiated and focused concept – especially in the Health & Wellness space – gives consumers an experience and another reason to shop brick and mortar. This is critical to food retail success and means leaning in fully to a commitment that places the customer at the center of strategic planning.

This insight must be informed by a crystal-clear higher purpose that translates into on-the-ground strategic decisions which defines and manifests in every aspect of store operation.

Human beings are emotional creatures. People are not fact-based analytical decision-making machines. We know the human sub-conscious plays a far more important role in helping guide actions and decisions than the cognitive side, yet most retailers operate on the “rational” channel.

When it’s heart-over-head, the grocery store shopping experience is enhanced by strategies that acknowledge our deep love affair with food, interesting culinary experiences and the prevailing desire for a healthy lifestyle.

• Disney knows how to create the magic in their kingdom. Imagine a food store with the same heart and passion for food experience and how that could play out in a store setting.

Raley’s recognizes the growing importance of grocery foodservice experiences especially at a time when going to restaurants is less desirable. Yet the magic of environment and ambiance are no less important here than at the corner bistro. “Raley’s O-N-E Market includes McKinney Loft – a tribute to Steve McKinney, skier, mountaineer and local icon. The loft features plenty of seating, a beer and wine bar, bar bites, and an outdoor fireplace and large TV screens,” explains Minor.

At the crux of Raley’s likely success with Raley’s O-N-E Market is its higher purpose. This is harder to define correctly and to optimize fully. For that reason, Emergent has built a four-step plan to guide higher purpose development. You can download a copy here.

If would like to discuss this in the context of your business and its future, please use this link to start a conversation.

For more food trends, consumer insight and communications strategy follow us on Twitter @EmergentLiving.

Looking for more food for thought? Subscribe to the Emerging Trends Report.

This is the second installment in our “2015 Emerging Food Trend Forecast” series exploring food and beverage mega-trends.

2. Revolution in supermarkets and the rise of Groceraunt

The supermarket industry is going through dramatic change as a result of this consumer design for higher quality foods and food experiences. The center of the traditional grocery store is shrinking while the fresh perimeter is expanding. Some legacy brands and categories like cereal are flat to declining while the kitchens inside supermarkets are going through what best can be described as a culinary renaissance.

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New formats, new ideas, new media, new channels — all at once

By Bob Wheatley

What’s for dinner anyway? Well that could be curry braised baby carrots in shallot sauce with duck confit that you picked up from the hot table area of your favorite supermarket-as-restaurant store. What was once a four-walled pantry and acres of shelving to serve up a mind numbing array of umpteen thousands of skus of packaged items, is now leaning into lifestyle relevance in a big way. Food shopping organized around how people actually live, what their food passions, interests and concerns are about, now factored into store and retail brand concept.

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