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It’s not news for grocers that consumers are looking for deals and more bang for their buck. But this year’s “What’s in Store 2010,: the trends report from the International Dairy•Deli•Bakery Association™ (IDDBA), confirms that many consumers have changed their spending habits, with more than half of shoppers saying they’re buying less in the deli and prepared foods areas.
In-store delis are feeling the impact, with nearly one in five experiencing a drop in gross income over the past year -- but that means that four in five are still holding strong. Trends in thriving delis include meal deals, cross-merchandising, a return to traditional comfort foods, and ethnic food offerings that match local demographics.
Inside the Mind of the Deli Shopper
Taste, price/value, freshness, cleanliness, and quality of deli items are the qualities consumers value most in the deli and prepared foods departments. Fewer consumers put a high value on organic, local and imported designations than they did during the economic boom, and brand loyalty has weakened. Instead, they’re looking for value -- in the words of one shopper, “The price per pound of deli items has increased too much, so I look for sales.” However, well-to-do shoppers continue to be attracted by healthful prepared foods programs, and many of them have actually increased their purchases of supermarket ready-to-eat and heat-and-serve meals.
Most folks are reducing restaurant spending without increasing their deli meal purchases. Roughly one-half of Americans bought meals at the in-store deli less often over the past year, with one-third of those doing so “much less often,” according to the latest IDDBA research. Many shoppers say they are “more concerned about price than time right now.” In the future, retailers will turn to more pricing tactics, promotion, menu composition and in-store aesthetics.
Return to Comfort Foods
Financial instability is leading many consumers to seek consistency in other areas of their lives, and that has manifested itself in a demand for iconic deli foods -- although an increasingly sophisticated consumer palate means that shoppers like a little twist on tradition. Few things say “deli” more than old-fashioned potato salad, and manufacturers report that sales of their traditional potato salads are strong. They’re also experimenting with trendier versions of the classic that feature specialty potatoes or spicy sauces. Fried chicken meal deals, macaroni salad, chowder and chicken noodle soup are strong players in the comfort category.
Of course, comfort foods vary from culture to culture, and an area’s demographics largely determine customer cravings. Large Hispanic populations in the Southwest and West Coast have created a demand for authentic foods from Latin American cuisines, while foods like paneer (a fresh cheese) and naan (a flatbread) are popular in areas with large Indian populations
Hot trends in deli equipment include multipurpose pieces that use space efficiently, save energy and allow delis to more easily merchandise their products. Several manufacturers offer multi-temperature cases for cross-merchandising frozen, refrigerated and nonperishable items. And, to save energy, they are developing LED (light-emitting diode) systems for service cases. LEDs use much less energy than fluorescent bulbs, have a longer lifespan nd produce less heat, resulting in long-term savings all around.
Convenience, looks, durability, food safety and the environment all come into play when consumers weigh the pros and cons of different packaging. Deli operators and suppliers must also factor in a patchwork of local packaging laws when choosing containers. Several American cities have outlawed polystyrene trays for use in the deli, and have banned or taxed some types of takeout containers. Plastic tub packaging continues to win over consumers because it’s easier to handle than zip bags and vacuum bags.
Consumers Scale Down on Deli Meat Purchases
Before the financial bust, premium and imported deli meats were the next big thing. Now, consumers are scaling back, looking to get more protein per penny. They are opting for prepackaged meats over sliced-to-order meats from the service deli. According to one consumer, “Although the deli items are fresh and much healthier, it is not as cost-effective as purchasing the pre-packaged items.”
While consumers keep their eyes on the price, manufacturers are trying to get them to think about the overall value proposition of different deli meats. Consumers may be willing to pay a little more for meats they believe are better for them -- perhaps because of reduced sodium, added ingredients like olive oil, or natural processing methods.
Cross-Merchandising Complete Meals
Cross-merchandising -- either by bringing non-deli foods into the deli or bringing deli foods to other areas of the store -- is a hot trend. For example, Minneapolis-based Supervalu recently launched “Simply Good Meals,” which displays meal components in cases that are positioned in several spots throughout the store, including the deli, meat and produce sections.
For more information on the coming trends, “What’s in Store 2010” details consumer and industry trends affecting the dairy case, cheese case, bakery, deli and foodservice departments. Its 165 tables, developed in cooperation with leading industry firms and associations, include department sales, per capita consumption, consumer preferences and random-weight, UPC, and private label sales data. The full report is available from IDDBA. The cost is $99 for IDDBA members and $399 for non-members, plus shipping and handling. Purchasers of the report also gain online access to quarterly random-weight sales data throughout the year. For more information, or to order, call the IDDBA Education Department at 608-310-5000 or visit the organization’s Web site, www.iddba.org.