MEDIA COVERAGE: Retail Trends For Today’s Delis
Creative foodservice offerings, healthful fare and natural selections help supermarkets compete
Excerpts from article BY LISA WHITE
If there were one word that could be used to describe today’s supermarket deli trends, it would most likely be ‘fresh.’
This not only encompasses deli departments’ prepared food offerings, but also how this key section of the store is now perceived.
According to the Madison, WI-based International DairyDeli-Bakery Association’s (IDDBA) 2017 What’s In Store report, better efficiency in managing shrink and increased awareness of freshness perceptions have played an important part in bumping up deli margins.
Not only does the report reveal deli is the fastest growing perimeter department, but the main growth driver, prepared food, accounts for close to 60 percent of this increase.
In the second edition of The Why? Behind the Dine, Acosta research shows sales of freshly prepared foods at grocery retail outpaced growth trends in grocery overall as well as foodservice.
But this aspect of the department isn’t the only revenue driver. The New York-based Private Label Manufacturer’s Association’s (PLMA) Private Label Yearbook reports store brands also are burgeoning in supermarket delis.
Sales of these products reached $118.4 billion in 2015, an all-time record and an increase of $2.2 billion over the previous year, reports PLMA. Store brands’ dollar share came to 17.7 percent, also the highest mark ever.
There are a number of lifestyle trends that have been impacting the direction of the deli.
For example, IDDBA reports shoppers consider health more often with grocery prepared foods than restaurants, which has led to a growing demand for healthy prepared food. Ethnic cuisine also has become a staple, especially in the Millennial demographic’s repertoire. Also, meal kits offering components for cooking semi-scratch dishes are allowing deli departments to better tap into consumers’ creativity, while satisfying their need for convenience.
Ethnic comfort foods with Asian, Italian, Hispanic and Indian influences that require minimal prep and cook time are especially on trend.
“Deli departments are trying to balance [their offerings],” says Bob Sewall, executive vice president of sales and marketing at Blount Foods, located in Fall River, MA. “Stores need to offer a little bit of traditional and ethnic foods, which should be a blend of the everyday selection.”
The supermarket’s location will have an impact on offerings and flavor preferences, with Southwest fare most prevalent in Texas, for example. Yet, this doesn’t mean delis cannot step outside the box and experiment.
The days of including rotisserie chicken with traditional mac and cheese on the hot bar have passed, as selection and flavor expectations are greater than ever before. “Each region has every day offerings that may mean something to their customer base, but above and beyond that it’s about offering something new or different,” says Sewall. “This includes providing dishes with authentic ingredients, organic sides and lower calorie counts for women and millennials seeking healthier options.”
There also is a continued push for hot bars, which have allowed retailers to better compete with restaurants.
“People are either going to buy prepared foods and take it home or eat out, that’s really what’s driving the excitement around fresh prepared foods in supermarkets,” says Sewall. “Due to the increased labor, equipment and time, stores are seeking more meal solutions for hot bars, and that has been our focus.”