Kroger dedicates new research center to food innovation

Discussion
Photo: Kroger
Feb 27, 2018
Tom Ryan

While many retailers have opened innovation centers in recent years focused on technology, Kroger last week opened a Culinary Innovation Center in downtown Cincinnati.

The test kitchen and education center, measuring 12,000-square-feet, features multiple cooking stations, spaces and capabilities.

In a statement, Daniel Hammer, Kroger’s VP of culinary development and new business, said the R&D lab will allow Kroger to accelerate product development for its private labels, produce new recipes for Prep + Pared Meal Kits, explore new restaurant concepts, host food tastings and focus groups, and increase associates’ culinary knowledge. Kroger will stream video of educational sessions for its associates across the country.

Mr. Hammer noted that the center supports Kroger’s “focus on redefining the customer experience and developing talent through food inspiration and uplift as outlined in Restock Kroger.”

The Restock Kroger initiative includes reducing capital investments in new stores while building out its e-commerce and omnichannel businesses, using technology to optimize product assortments and investing in customer service. Expanding its private brand business, which has grown from $15 billion to $20 billion from 2011 to 2017, was also called out as an ongoing focus with Restock Kroger.

Kroger’s statement on the innovation center opening also noted that the company introduced its first restaurant concept, Kitchen 1883, in November 2017 and plans to “rapidly” expand its Prep+Pared Meal Kits, introduced earlier last year.

The opening comes days after Kroger held its second Natural Foods Innovation Summit in Cincinnati to support new brands and products. Said Mr. Hammer, “Kroger has operated grocery stores since 1883; we know food. People will always eat, but the way they eat will always change. Our new center is one more tool we have to keep our pulse on customer trends and expand our foodie culture.”

In late January, Kroger was rumored to be close to acquiring Boxed.com, the bulk e-grocer, a potential move some felt was a response to Amazon, Walmart and Target all investing aggressively in online grocery.

DISCUSSION QUESTIONS: What will Kroger gain from its Culinary Innovation Center? Should food innovation be just as important as tech innovation to Kroger and other grocers?

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11 Comments on "Kroger dedicates new research center to food innovation"


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Kim Garretson
Guest

I give this effort a highly likely chance of great success for Kroger, if for no other reason than the company and Proctor & Gamble are both in Cincinnati, and P&G is not in food, but Kroger is a major customer. I can see both companies seeking ways to collaborate and share data about the future of the grocery customer and where there are intersections. This effort should succeed where Target’s collaboration with MIT on the Future of Food lasted less than a year.

Zel Bianco
BrainTrust

Yes, food innovation should be just as important if not more important than technological innovation. People care about technology, but this move by Kroger speaks volumes about changing the shopping experience, and the quality and ingredients of the foods we eat. This focus should be a warning bell for center store brands and even perimeter national brands that your strongest competition may be coming from your retail customer.

Smart manufacturers will do everything they can to collaborate with the retailer and find innovative ways to cross-promote, generate healthy meal solutions and pivot on how they normally think of their relationship with their retail customers — on truly meeting the needs of the shopper.

Ben Ball
BrainTrust

It’s interesting that our discussion starts with questioning whether food innovation should hold the same priority as tech for grocers. Tech driven convenience will continue to be a major influence on all retailing — not just food. Consumers will increasingly demand it. But the core business of grocers is food. The differentiation between shopping options will always revolve around the food. How good it is. How fresh it is. How easy it is to access and prepare. Yes! Food innovation should rank equally with tech for grocers.

Lee Kent
BrainTrust

This concept “smells” good to me. Looking at where today’s consumers are headed, it makes a lot of sense. From meal kits to foodie experiences it has the potential to inspire and delight customers as well as to keep customers coming back. For my 2 cents.

Ian Percy
BrainTrust

I hope this turns out to be more than a source for good tasting recipes and convenient packaged meal offerings. I suggest a “meals as medicine” research focus.

This comes to mind because I’m working with a brilliant scientist who developed a range of totally plant-based nutraceuticals for an equally wide range of pretty serious ailments. Trials have been remarkably successful over the last few years with huge economic as well as physical benefits. So I wonder if these same plants could be incorporated into disease-targeted and appealing meals. Imagine if someone could alleviate their suffering from shingles, for example, by eating meals containing plant materials known to do exactly that.

Neil Saunders
BrainTrust

This is a smart move.

Most U.S. grocers are way behind their U.K. and global counterparts on food innovation, and I see this as a major opportunity for growth.

If you look at how retailers like Marks & Spencer and Waitrose use food innovation to drive sales opportunities, you can see where Kroger may be headed with this initiative.

It’s not the total solution, but it’s a good step in the right direction, And it’s nice to see a retailer focusing on the most important part of the proposition — the product — for a change!

Brandon Rael
BrainTrust

Driving innovation, creativity and experimenting with new food offerings will be a key competitive differentiator for Kroger in this already congested grocery segment.

Health consciousness and sustainability is a significant trend, and Kroger is very wise to capitalize on this new opportunity. If you could combine trust, transparency, health consciousness, as well as inspiration with your food offerings, then perhaps you have a winner on your hands. This is a fine example of Kroger leveraging technology for all the right reasons, most importantly helping to drive better and healthier prepared food offerings.

Gene Detroyer
BrainTrust

It sounds good, especially the comments about redirecting investment away from opening new stores.

But I am concerned. We have seen “food innovation” for the last 70 years or more and it has given us a toxic food supply. If that food innovation gives us good, healthy food, I am all for it. If it gives us factory food filled with ingredients you can’t understand, it is a step in the wrong direction. Maybe not for Kroger, but for the rest of us.

Tony Orlando
BrainTrust

Kroger has the skilled staff and the money to pull this off, and it puts them in the driver’s seat when it comes to picking a supplier that will make their new items. Negotiations for the final cost should be interesting. It is a small investment to gain a much larger payback long-term, and they certainly know what they are doing. A win for Kroger

Richard J. George, Ph.D.
BrainTrust

Great leadership move by Kroger. As most brick-and-mortar retailers try to figure out how to compete with Amazon and other online grocery retailers, Kroger is refocusing the playing field back to the store. With the various concepts discussed in the article, Kroger may be able to demonstrate a significant differential advantage vis a vis its competitors. Plus, this move firmly places them in the “what’s for dinner tonight” business, capturing the foodservice dollars that many consumers currently spend at restaurants.

Ricardo Belmar
BrainTrust

For grocery retailers, food is their technology innovation and this is a wise move by Kroger to help them develop differentiated food products that they can deliver in-store or via digital channels. As the grocery segment becomes more and more competitive developing new products (meal kits, prepared foods, etc.) will be key to winning both new and repeat customers. I see this as bringing Kroger great success – especially in areas such as meal kits and prepared foods.

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