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How Hy-Vee leveraged the power of the food hall

The company wants to solve the dinner pain point

Sprouts executives recently told analysts that deli was the fastest-growing category in 2022, and that the company was becoming more efficient in its deli strategy. After testing a prototype with a larger space dedic (3).pngHy-Vee wants to be able to ring that bell at 4 p.m. That’s the hour when most of its customers are trying to pull ideas for dinner out of the think tank, a process which can be a daily struggle. Hy-Vee’s goal is to cut out those mental gymnastics by offering a variety of food choices in its food hall. Customers can grab and go, dine in, or pick something up and reheat it at home.

“Seventy percent of our customers say they have no idea what they are going to make for dinner at four o’clock,” said Ryan Roberts, executive vice president for perishables. “So our concept of our food halls is really to provide very high quality products and a wide variety.”

Make that an extra wide variety. Hy-Vee offers six restaurants in most Food Halls: HyChi & Hibachi, Nori Sushi, Market Grille, Wahlburgers at Hy-Vee, Long Island Deli, and Mia Italian. 

More or different stops could be on the way, as Hy-Vee officials are continuously looking at consumer studies and market research to offer the top destinations.

Hy-Vee recently also added its Market Grille Express concept at 87 stores. And, according to Roberts, the self-service dining concept cranks out more volume than some of Hy-Vee’s Food Halls. 

Supermarket News editor Bill Wilson spoke with Ryan Roberts, Hy-Vee’s executive vice president of perishables, as well as Brandon Williams, vice president of bakery food service and coffee.

Bill Wilson: Hy-Vee’s food hall. What makes it unique compared to other supermarket chains?

Ryan Roberts: So our food hall concept, it’s really about giving customers a unique dining experience because in a grocery store you have a lot of different needs. Customers are looking for quick — easy in, easy out. They’re looking for a dine-in experience. They’re looking for something to take home for dinner because they say that 70% of your customers have no idea what they’re going to make for dinner at four o’clock. You have a family who comes in for dinner, somebody who wants a burger, somebody who wants a piece of pizza, somebody who wants sushi, somebody who wants chicken tenders … we’re able to take care of the entire family within our food hall concept. And the other thing that makes it unique is a majority of all of our products are made fresh to order. 

BW: What’s the strategy behind the types of food and brands you offer?

Brandon Williams: We’ve had our traditional items, be it fried chicken, meatloaf, pork tenderloin dinners…and then we wanted to look at new flavor profiles, what’s trending, what are the customers wanting us to be for them so that we’re ahead of that curve. So, that’s where our Hy-Chi, our authentic Asian food, be it Hibachi, be it Mia, be it in our standalone restaurants or in-store market grill, our partnership with Wahlburgers — it’s going to where customers want to go and getting there fast. 

BW: Your offerings at each Hy-Vee vary, correct? 

RR: We have different sizes of stores in our flagship operations. And so where we can fit all of the entire portfolio, we try that. All of our new locations, the flagship locations, we have the full assortment of all of our offerings, but not all of our boxes are built the same. And so you can’t offer everything, everywhere. And so we really tailor, depending upon the store size — that’s how we really decide the offerings and the restaurants that we have in there.

Hy-Vee Food Hall + Ordering Kiosk.jpg

A Hy-Vee food Hall and ordering kiosk.

BW: So will the Market Grill be offered in more locations before year’s end? And if so, how will that rollout work?

RR: Where we’re expanding is in our Fast & Fresh convenience store locations. Our convenience stores — they’re not gas stations … we look at them as meal replacement stores, as meal solutions stores. And with the Market Grill Express’ that we’ve put into our fast and fresh locations, they do more volume than some of the locations in our grocery stores. And you see that it’s become a destination for people for breakfast, for lunch. There’s several in the Des Moines area that you go in over lunchtime and you can’t find a parking space because you have construction crews, you have delivery folks from other companies that are coming in to grab meals at our location. So we’re expanding our Market Grill Express to, I think we have 87.

BW: So Hy-Vee strives to be a dining destination and economists are already saying that 2023 is going to be the year that consumers are going to go for that dining experience. How are you enhancing that experience and how are you competing with restaurants?

Brandon Williams: Well, I think a lot of it is the experience that we’ve built through a whole food hall and the look and the feel and the vibe, and the restaurants that have the bars in them, being able to differentiate from sitting just in a grocery store. And it’s a different feel. It’s almost like you’re walking into two different stores when you walk into a store that has the dining hall. So you’re actually going in and it’s like, ‘Okay, I’m not even in a grocery store right now.’

RR: Yeah, you see food halls in some of the bigger cities. Washington D.C., Chicago, Boston, they have a warehouse and there’s 25 different restaurants in the warehouse and then there’s seating area around it. And so that’s really the idea of having multiple different offerings to take care of a family, but also a group of buddies that wants to come in and watch the game. And then that central seating area that revolves around our full-service bar where we have 30-plus taps on hand, most of them local taps from the local areas where the stores are located. It just really creates a unique experience.

BW: So what does it mean to you guys when you’re named to the SN Innovator List? What does that mean to Hy-Vee?

RR: For me, it means that what we’re doing is working, that people are paying attention, that, especially in our new markets, it’s become a destination for family, for friends, and it’s tremendous. It is tremendous to be recognized like that. And it tells us that we’re on the right track, on the right trend, and we need to continue to push and evolve and learn and grow and find new areas and new offerings that we can continue to expand the whole process and the whole experience.

Brandon Williams: Yeah, I would agree with what Ryan said. It really is great to know that we’ve been honored by this, to know that our customers are seeing that this is a great thing and we’re seeing the results of it. 

BW: Anything else? 

RR: I would say that a big thing that makes us unique is our partnerships. The partnership that we have with Wahlburgers specifically, that’s one of the fastest-growing burger chains in the United States. And having that partnership with the Wahlburgers Corporation, that’s really put us in a great position to deliver that to our customers. And we deliver Wahlburgers to towns and cities that not necessarily would ever get one. You see Wahlburgers in Boston and New York and Las Vegas. I think they just opened one up in New Zealand and now we get the opportunity to bring that experience to cities and towns and that would never ever get a franchise. And so the partnerships that we have that we’ve developed is really what makes it special.

This feature is part of our 2023 "SN Foodservice at Retail Innovators" list: see more innovators here.

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