Tuesday, October 17, 2023

The Service Deli Selling Grocerant Meals and Meal Components Might Save the Grocery Sector


Grocery stores are having a bad time stocking the shelves with products legacy food manufactures want them to sell.  Grocery stores the ilk of Kroger and Publix like the slotting fees legacy food manufactures pay.  In fact, according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® “slotting fees” are the as bad for grocery stores as heroin is for a junkie.”

Grocerant niche meals and meal components are driving customer migration within every sector for food retail today.  Grocery stores to win the battle for share of stomach must focus on what the customer wants rather than what legacy food manufactures want. Let’s see why that is:

1.       Recent Grocerant ScoreCards found 82.3% of consumers don’t know what’s for dinner at Noon, and 61.8 % don’t know what’ s for dinner at 4PM.

2.       68.2 % of consumers would order alcohol with a meal or meal components from a restaurant if available when ordering.

3.       Roughly 63.7% of consumers purchase prepared food items from a retail location at least three times a month.

4.       79.6% all dinners have at least 1 grocerant niche Ready-2-Eat and Heat-N-Eat meal component and 66.6% have two meal components per day.

5.       When asked if they wanted to cook dinner from scratch or assemble dinner from fresh meal components 91.3 % of Gen Z chose assemble from Fresh Prepared Meal Components and Millennials 83.4% chose meal components.

6.       Seventy-three percent of retail prepared food purchases are taken to go

7.       88.2 % of consumers prefer hand held food over sit down meals with a knife and fork

Do you Want a 

Larger Share of Stomach?

There is no doubt that inflation continues to drive up costs and retail prices in deli fresh and across the store. Customers still gravitate towards convenience items, but now the focus is more on value.

We all know that during the pandemic, deli fresh sales were down 36.2% according to the National Grocers Association. But within the last 12 months, deli fresh sales have increased by over 60%, underscoring the demand in the category.  Here are more facts from a recent article:

“As we move past the pandemic, customers also demand a better shopping experience,” said Tony Phi Dang, corporate executive chef of Southern California-based Gelson’s Markets. “More people are shopping in person again, so smart merchandise displays and enhanced in-store dining experiences affect where people choose to shop.”

“Our cold-prepared salads and meals have seen a dip in sales volume in 2023 after reaching a peak during the pandemic,” Phi Dang added. “Prepared meals in our grab-and-go cases are higher than pre-pandemic sales but have dropped as customers slowly return to shopping in person. Salad bar and hot foods sales have increased over pandemic numbers but have not returned to pre-pandemic numbers.”

Chris Mentzer, director of operations for Rastelli Market Fresh, which has two New Jersey-based locations in Marlton and Deptford, said lines are back in the deli for fresh items, though shoppers are keeping an eye out for items on sale.

“It’s one of the categories that is back at full-speed and sales are outperforming last year’s numbers for us,” he said. “We have a specialty flare to our store, so we try to challenge our customers with new products, such as fresh-roasted and fresh-smoked meats and pork loins for lunch meat.”

Whitney Atkins, vice-president of marketing for the International Dairy Deli Bakery Association (IDDBA), noted that the organization’s “Guiding Trends for 2023” — “Whole Heart, Whole Self and Whole Heart,” “Consumer Defined Convenience” and “Worth the Value,” reflect the countless opportunities for deli fresh to increase sales again.

“Consumers want to be able to gather a healthy, quick meal or perhaps indulge in a fresh prepared salad,” she said. “Deli fresh meal solutions naturally create incremental bakery sales like rolls or dessert or even cross departmental sales like produce salad mix and grocery salad dressings.”

Jonna Parker, team lead, fresh at Circana, noted food decisions today are dominated by affordability. However, consumers are still weighing convenience, health, taste, and experiences into their decisions, as well.

“There is great recognition that in comparison to restaurants, fresh deli-prepared foods deliver on a lot of these demands,” she said. “The key is being on the radar for those times the consumers decide to leave the meal prep to someone else.”

In vogue 

David Henkes, senior principal and head of strategic partnerships for Technomic, which advises supermarkets on business growth, noted pizza and value-added meats such as rotisserie chicken, pulled pork, and ribs have been among the top performers in the deli fresh category in 2023.

“Pizza has benefitted from the fact that major pizza chains have faced challenges in terms of ingredient availability and pricing,” he said. “Breakfast pizza has also been emerging for some grocers as they try to develop the prepared breakfast daypart. Value-added meats have also been comparably affordable as so many traditional foodservice operators have been charging much higher prices for protein-based dishes in the past years.”

Erin Rector, senior account manager, food safety and quality for the global food division at NSF, noted that grocery retailers are responding to the deli fresh trends of meals that are already cooked and assembled, as well as meals that simply need to be heated up for the customer to prepare. Retailers are additionally adding hot-holding packaging so that the consumer can easily prepare the meal and eat it from the same package.

“Stores have also prepared more options for customers to purchase and quickly cook when needed,” Rector said. “They have also increased options so that busy families can accommodate all of their family members’ dietary needs.”

At Gelson’s, its albacore tuna and herb salad has been a crowd favorite this year, and premade sandwiches and prepackaged salads are also at the top of the list for sales.

“Customers love the familiar, high-quality, and consistency of our gourmet salads and grab-and-go meals,” Phi Dang said. “We have expanded the variety and number of options available over the last few years. We continue to work on developing new recipes for meals to keep the category fresh.”

Savvy displays

It’s as important as ever for stores to catch the eyes of its shoppers to entice them to the fresh offerings, and that can be accomplished in numerous ways.

“Cross-merchandising products from our regular deli and meat departments have been mutually beneficial,” Phi Dang said. “A beautiful cheese plate beside our prepackaged salads might entice customers to buy both items. Fresh and full-looking gourmet salad displays also attract customers to the kitchen.”

Gelson’s has also updated signage in all of its store entrances to show what deals will be in the kitchen and throughout the fresh department. 

Most customers are already loyal to their favorite grocery store and their deli department. The key for increased sales is to promote deli fresh within the store using directional signage, beautiful displays, and an adequate stock of products.   

“Samples, combined with limited-time specials, can prove to be effective for the deli fresh department,” Mentzer said. “That’s been very beneficial for us.”

And with back-to-school season now here, deli fresh offerings are expected to finish the year strong due to their convenience.”

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 participationdifferentiation, 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

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