Fresh Is No Longer a Department — It Is the Foodservice Battleground

 

For years Steven Johnson, The Grocerant Guru® at Tacoma, WA based Foodservice Solutions® has argued that Fresh Is First.

Today, the data tells us something even more important: Fresh is no longer simply a department, a perimeter strategy, or a grocery-store differentiator. Fresh has become a competitive foodservice platform.

And the retailers, restaurants, convenience stores and food brands that understand that distinction will be the ones capturing the next generation of meal occasions.

The old food marketing playbook was built around categories: grocery, restaurant, convenience, deli, bakery, frozen and center store.

The consumer doesn't think that way anymore.

Consumers think about what they want to eat, when they want it, how much time they have, what it will cost and whether it looks and tastes good.

That is the real battlefield.

The Fresh Revolution Has Become a Foodservice Revolution

Back when this article was originally written, the idea that fresh prepared food could become a major competitive weapon across food retail was still emerging.

Fast-forward to 2024, 2025 and 2026, and the evidence is difficult to ignore.

FMI reported that retail foodservice prepared-food sales reached approximately $50.9 billion in 2024, up 1.4%. At the same time, 70.7% of households regularly purchased foodservice-at-retail products, averaging 9.5 purchase occasions annually.

But perhaps even more revealing is where fresh sits within the overall grocery equation.

FMI reported that fresh foods represented 42% of total grocery sales in 2024. Foodservice within fresh foods reached approximately $56 billion, making prepared food one of the industry's most important differentiation strategies.

That is not a niche.

That is a structural shift.

2024: Fresh Became a Competitive Weapon

Circana's 2024 food-and-beverage outlook predicted that deli would outperform overall food-and-beverage unit sales, with convenient grab-and-go products helping drive the category.

Circana specifically pointed to the need for perimeter departments to optimize turnkey solutions for consumers seeking food on the go.

Meanwhile, Technomic found that convenience stores were increasingly competing on food quality.

In its 2024 research, consumers rated c-store foodservice at least as good as—or better than—quick-service restaurants on several attributes, including price, freshness, cleanliness and quality. Technomic also found that 75% of c-store foodservice patrons prioritize the ability to multitask during the visit.

Think about what just happened.

The supermarket began behaving more like a restaurant.

The convenience store began behaving more like a restaurant.

Restaurants began behaving more like retailers.

And consumers simply kept moving between all of them.

That is Food Channel Blurring.

2025: The Grocery Deli Crossed the Line

Then came an even more important signal.

FMI's 2025 Power of Foodservice at Retail report found that the share of consumers using deli-prepared foods instead of restaurant meals more than doubled—from 12% in 2017 to 28% in 2025.

More than half of Americans—53%—were taking a hybrid approach to meals, combining deli-prepared foods with items prepared at home.

Retail foodservice dollar sales rose 1.6% to $52.1 billion over the measured period.

Read that again.

The grocery deli is no longer simply competing with another grocery store.

It is competing for restaurant occasions.

And restaurants shouldn't assume the competition is another restaurant.

The competition might be a grocery-store rotisserie chicken, a prepared entrée, a fresh sandwich, a salad, pizza, sushi, a convenience-store meal or something ordered digitally and delivered to the front door.

The consumer doesn't care which industry invented the meal.

They care whether the meal solves the occasion.

Convenience Has Become a Food Attribute

This is where I believe many legacy food marketers still have it wrong.

They continue to treat convenience as a distribution advantage.

It isn't.

Convenience is now part of the product.

A fresh sandwich that requires a 20-minute wait isn't necessarily competing against another sandwich.

It is competing against the sandwich that can be picked up in 90 seconds.

A grocery deli that produces outstanding food but doesn't make it easy to find, order, pay for and carry home is leaving value on the table.

FMI's 2024 research showed that consumers increasingly want restaurant-like capabilities from retail foodservice, including online menus, advance ordering and pickup or delivery.

That is why Ready-2-Eat and Heat-N-Eat matter so much.

They collapse the distance between fresh food and immediate consumption.

2026: Fresh Is Moving From Differentiator to Destination

Now look at 2026.

McKinsey reports that grocery shoppers identify convenience (74%) and saving time (68%) among the leading reasons they buy prepared foods from grocers.

Even more important, the frequency of prepared-food purchases increased 9% year over year from August 2024 to August 2025.

And FMI's latest 2026 research reinforces the point: prepared, ready-to-eat and ready-to-heat grocery foods have become part of today's lunch routine because they are fast and convenient.

At the same time, consumers haven't abandoned the home.

Quite the opposite.

FMI reports that 44% of shoppers say they are having more family meals at home than a year earlier, while 35% say they are cooking more often. Half say they are eating fewer restaurant meals and ordering less takeout and delivery for their families.

This is enormously important.

It means the opportunity isn't simply restaurant versus grocery.

It is foodservice versus friction.

Consumers want the economics, flexibility and comfort of home without necessarily wanting to do all the work required to produce the meal.

That is precisely where the Grocerant niche wins.

Fresh + Prepared + Convenient = The New Value Equation

Foodservice is also confronting a consumer who has become much more deliberate about spending.

Circana reported that U.S. foodservice operator spending reached $357.3 billion for the 12 months ending June 2025, up 3.7%, even though traffic was essentially flat.

And Circana found that 29% of commercial foodservice traffic was purchased on a deal, the highest level recorded in its 50-year historical analysis.

But here is the catch:

Value is not synonymous with cheap.

Consumers are increasingly evaluating the complete equation:

Price + Portion + Quality + Freshness + Convenience + Experience.

That is why a $9 prepared meal can compete with a $15 restaurant meal—and why a $5 meal can still lose if it looks tired, tastes mediocre or creates friction.

The winning proposition isn't simply lower price.

It is better perceived value for the occasion.

The New Food Marketing Battlefield Is the Meal Occasion

This brings us back to the five ideas in the original article:

Fresh.

Health.

Experience.

Instant gratification.

New.

Those ideas haven't disappeared.

They have merged.

Today's consumer increasingly wants food that is:

Fresh enough to feel good.
Convenient enough to fit real life.
Interesting enough to be worth buying.
Affordable enough to justify the purchase.
Available enough to become habitual.

That is why I believe the next phase of food marketing will be less about protecting traditional channels and much more about winning meal occasions.

A grocery store can win breakfast.

A convenience store can win lunch.

A restaurant can win dinner.

A supermarket deli can win the family meal.

A coffee shop can win the afternoon snack.

And a digital platform can win all of them.

The boundaries are gone.

The Fresh Food Opportunity Is Bigger Than the Grocery Store

One of the most telling developments is happening in convenience.

Circana expanded its U.S. convenience-store coverage in 2025 to include approximately $15 billion in annual sales from prepared foods, dispensed beverages and fresh products across 40 major chains. That includes prepared sandwiches, pizza, coffee, bakery and produce.

That should make every food marketer uncomfortable.

Because the c-store isn't merely selling gasoline, beverages and packaged snacks anymore.

It is building a fresh foodservice ecosystem.

And Technomic's research shows operators are continuing to invest in freshness, quality, selection and innovation to make c-stores credible foodservice destinations.

Meanwhile, restaurants are investing heavily in off-premise convenience, digital ordering, loyalty and formats designed around speed.

Everybody is moving toward the same consumer.

The Grocerant Guru® Bottom Line

I have been saying for years that the grocerant niche would expand because consumers don't shop channels—they shop solutions.

The data from 2024, 2025 and 2026 suggests that the transformation is no longer coming.

It is here.

Fresh is first because fresh creates the perception of quality.

Prepared is powerful because it removes labor from the consumer.

Ready-2-Eat wins because it eliminates time.

Heat-N-Eat wins because it gives consumers control.

And foodservice wins when all four are combined with taste and value.

The future belongs to companies that stop asking, "What category are we in?"

The better question is:

"Which meal occasion are we trying to own?"

Two Insights From the Grocerant Guru®

1. Stop merchandising Fresh—start marketing meals.

A beautiful fresh department isn't enough. Consumers don't wake up wanting to visit the perimeter. They wake up wanting breakfast, lunch, dinner, a snack or something they can take home tonight. The next generation of fresh-food marketing must merchandise around meal occasions, dayparts and solutions, not simply departments.

2. The real competitor isn't another food company—it is friction.

If your customer has to search, wait, order, pay, assemble, cook or clean when a competitor eliminates those steps, your brand has a problem. The winners will make fresh food faster, easier, more visible and more craveable without sacrificing quality.

Something to Think About

If Fresh Is First—and consumers are increasingly buying fresh prepared food wherever they can find it—why are so many food companies still organizing their businesses around yesterday's channels instead of tomorrow's meal occasions?

That may be the most important question in food marketing today.

Success does leave clues.

The Grocerant Guru® continues to believe that the greatest opportunity in food retail and foodservice is at the intersection of Fresh + Taste + Technology + Convenience + Value.

The companies that connect those dots first won't just sell more food.

They will own more occasions.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter