Consumers
continue seeking meal solutions particularly those solutions that save time,
save on planning a meal, save them from cooking, according to Steven Johnson Grocerant Guru®
at Tacoma, WA based Foodservice Solutions® who stated, “Grocery store deli
departments have become innovative in what meals and meal component they are offering
and how they are packaged, priced, and delivered. That innovation has garnered
them incremental customer visits, driven customer migration, and driven top
line sales and bottom-line profits.”
In a new report from, FMI-The Food
Industry Association shows just how much growth there is. Deli prepared foods sales totaled $31.3
billion for the 52 weeks ended Aug. 27, up 9.3% year over year and 19.2% from
the pre-pandemic 2019 period, according to NielsenIQ
data cited in the FMI
Power of Foodservice at Retail 2022 report, released Tuesday. On a unit sales basis, deli prepared foods
edged up 2.4% year over year and 7.2% from calendar year 2019. Pizza, in
particular, turned in strong results, with dollar sales up 16.7% and unit
volume up 20% over the 52-week period.
Now, overall deli sales climbed 12.3% to
$47.9 billion in dollars at 3.7% in units for the 52 weeks, up 20.9% in dollars
and 8.3% in units from 2019. FMI noted that the robust deli and deli prepared
performance came as most fresh departments saw unit sales decreases during that
period.
Rick Stein, vice president of fresh foods
at FMI, stated, “When you look at most of the fresh categories, they are up in
dollars. But that is being primarily driven by inflation. Our members enjoy the
benefits of the increased dollars, but the worry is the volume wasn’t there,” ...
“When we look at foodservice, the volume and the dollars were up not only year
over year but versus pre-COVID, which is more significant.”
There is no doubt that, grocery store
foodservice has benefitted, in part, from the lingering food-at-home trend,
according to Stein. While the momentum has swung back toward restaurants as
consumers have felt safer returning to public activities, many also have
retained their preference for eating at home due to habits generated during the
pandemic, hybrid work environments and high menu pricing at restaurants, he
explained.
Stein continued, “Convenience and value
combined lend themselves to eating more at home. So although foodservice [at
restaurants] has reopened and there is a good segment of our population that’s
going out to eat, every time they get the check, they’re realizing how
expensive that is,”... “So I think that drives them to think about maybe a few
less occasions eating out and a few more at home.”
Now I want you to think of a fast-food
restaurants current check average. Now
read this and let me know if you think consumers believe grocery deli food is
fast-food? FMI’s research, also based on a survey of 2,009 U.S. adult grocery
shoppers, found that 71.7% of households bought deli prepared foods at least
once during the 52 weeks through Aug. 27, up 0.9 points year over year. During
that span, the number of purchases averaged 9.5, a 5.1% uptick, while
transaction size averaged $7.78, up 9.6%.
The extended food-at-home trend also
exposed many shoppers to all of the foodservice options at the grocery store as
these operations have reopened.
Stein went on to say, “The way customers
learn about what’s available comes more from in-store shopping, as they walk
around the store,” … “They really became aware of all the offerings as they
were doing more shopping for home. So, I think it all sudden started to get on
their radar that there were options for them at the foodservice delis.”
Of grocery shoppers polled, 21% said they
prepare seven or more dinners at home per week, up from 16% in 2021 and
including food made at home, semi- or fully prepared items and leftovers.
Now according to Stein, “What happened is
consumers started seeing the economic value of cooking at home. But you’re
still talking about 50% of the consumers, and 49% are telling you that they're
using the foodservice at retail to complement or accessorize their total
meal,”. “So maybe they're buying the salad, a side dish, the main protein or
the rotisserie chicken and then going home and combining it with other things.
But I still think that’s playing into their game plan.”
Johnson says that this is worrisome for
restaurants, in 2022, purchase frequency has risen for those who buy deli
prepared foods more often. FMI’s report said 11% of grocery customers purchase
deli prepared foods every few days (versus 9% in 2021), and 6% do so just about
every day (vs. 4% in 2021). Conversely, the percentage declined in 2022 for
shoppers buying deli prepared foods every few days, every week, every few weeks
and less than once per month.
What restaurant sectors could be most
affected? Well, midday and late afternoon are the top times of the day for
these purchases. And while most deli prepared foods are bought as part of a
regular grocery trip, 18% of shoppers make special trips for these items, FMI
reported.
Stein continued, “Retailers have done a
really good job of highlighting all the options, hot and cold, grab-and-go
foods, etc. When you’re a more frequent shopper, you see those options, and
that could be your only reason for the trip,” “You could be at home and
deciding to go to the local supermarket to pick up something for lunch or
something quick for dinner. And that’s increasing your trips because you’re not
going to buy four days’ worth of foods that you want to consume that night.
You’re probably just going to buy for that day or for that particular meal. So
that’s why you're probably seeing the trip frequency equaling more purchasing.”
So, versus a year ago, 57% of grocery
shoppers reporting buying the same amount of deli prepared foods, and 25% are
purchasing more. Those raising their deli foodservice purchases tend to be men,
urban dwellers, Millennials, larger households (more than three people),
heavier grocery spenders, bigger online grocery spenders and hybrid workers.
Note, that more often, grocery
deli-prepared meals replace a home-cooked meal (42%) than a restaurant meal
(17%), and a third of grocery shoppers reported that deli prepared is an
impulse purchase most of the time.
Still, FMI noted, there are key
opportunities for grocery foodservice. A quarter of shoppers usually opt for
deli prepared options, even though restaurants are the most popular solution
(39%) for shoppers who don’t feel like making dinner themselves. Fifty-three
percent of consumers said deli prepared foods are a good value versus taking out
from or eating at a restaurant. And 43% of shoppers said a big reason they buy
from a restaurant versus grocery deli prepared is they don’t think about it and
the latter should be better advertised.
Half of the FMI survey respondents
indicated the ability to order ahead — from a mobile app or online — and have
an inside pickup station for pre-ordered food would drive more purchases deli
prepared items. More creative approaches, too, would spur deli foodservice
purchases, including vegetables/healthy options (cited by 58% of grocery
shoppers), heat-and-eat sides (57%), meal deals/bundles (56%), total meal
solutions (55%) and heat-and-eat holiday meals (27%). Over half of those polled
also would be interested in “featured days” such as “Taco Tuesday” or “Pizza
Friday.”
Restaurant operators need to think about
this next quote from the report. “We are
trying to tell our members that you need to think, look and act like a
restaurant when it comes to marketing your foodservice,” Stein said. “You need
to have the technology that goes with it. You have to have apps so that
customers can go to their phone, place an order and pick it up curbside. You
need to think differently than just putting it in your print ad on page four.
Perhaps you’re buying a billboard, perhaps you’re doing a TV or radio
commercial that’s just talking about your foodservice at retail. So we think
there’s still a lot of work to be done, but the leading lights are
accomplishing it. It’s out there for the taking.”
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
