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Supermarket prepared foods are poised to continue gaining steam for years to come, buoyed by progressive retailers’ upping their games with new types of products and expanded selling space to court an increasingly receptive consumer base. But it’s hardly a one-size-fits-all proposition, so it's imperative for category leaders to remain keenly focused on the increasingly important – and equally complex – category, for which knowledge of the latest insights of evolving consumer demands and expectations is paramount.
Keeping in mind one of the most important takeaways revealed in the second of a three-part series investigating the opportunities and challenges of supermarket prepared foods – that raising awareness of the product categories is critical to increasing the penetration of total supermarket prepared food shoppers – the third chapter of Progressive Grocer's 2014 prepared food research, full details of which will appear in our April 2014 print issue, takes a look at the primary factors that influence purchase decisions.
By the Numbers
“Age is a big story teller in this phase of the study,” affirms Eric Baer, research analyst and project leader for ICC/Decision Services, which conducted an online panel study for PG to probe customer profile and preference attributes of local grocery store deli/prepared food shoppers. Data points were collected by more than 2,300 respondents in a Feb. 7-8, 2014, ICC/PG consumer survey. “While there is no one age group that takes greater advantage of the prepared food offerings from one retail outlet over another,” says Baer, “needs were found to differ by age group.”
Commenting further on the overall findings of the latest prepared food consumer research, Nanette Brown, ICC’s VP of operations, notes: “Younger consumers shop less for meals that are time-saving in preparation, but are heavily interested in preordering prepared food items online and save their time in that aspect.”
However, adds Brown, the reverse is true for older shoppers, “who are less concerned with the time-saving aspect of ordering ahead and who would rather save their time when it comes to their meal preparation and convenience.”
While time-saving convenience and fresh, high-quality ingredients ranked as the top two most popular attributes, cross-tabulated responses among the panelists' demographics found younger shoppers, 18 to 34 years old, more concerned about price (28 percent) than convenience (23 percent). In terms of gender, time-saving meals are less of an influence for male shoppers purchasing prepared foods when compared with female shoppers (29 percent versus 37 percent).
Weighing the Options
When asked about specific attributes sought when deciding which prepared foods to purchase, the vast majority of ICC panelists (42 percent) cited options free of additives, preservatives, chemicals and dyes. Meanwhile, 17 percent favored prepared foods that support a weight management program.
Income levels can affect what shoppers look for in their deli prepared foods. Cross-tabulated responses reveal that shoppers who make more than $80,000 annually are more likely to look for prepared foods that are free from specific additives than shoppers who make $40,000 or less (49 percent versus 37 percent). Shoppers who live by themselves, meanwhile, are more concerned with prepared foods that support a weight management program, when compared with shoppers with five or more people in their households (21 percent versus 11 percent).
When asked about their primary store’s availability to preorder fresh meals online or at an in-store kiosk for pickup at the deli, more than one-third of surveyed shoppers saw it as a positive that their stores offer advance ordering options, while the majority (63 percent) of panelists said no. Shoppers who make less than $40,000 annually are less likely to use this service, even though their deli area provides it as an option (19 percent versus 32 percent overall).
Prepared to Order?
When looking at the cross-tabulated responses, ICC’s Baer observes: “Those in the $40,000-or-less income bracket do not use the option to preorder prepared foods ahead of time as much as other shoppers. This could be due to lack of access to the technology to do so.” He adds that lower-income shoppers also are less likely to notice advertising for prepared foods from online sources.
When asked if they would like to have/use a preorder option for supermarket prepared food ordering, either online or at an in-store kiosk for pickup, younger shoppers (18 to 34 years old) were found to be most interested in seeing the service offered by their local supermarkets (80 percent versus 69 percent overall). Households with five or more people, however, said they would want the preorder service more than those who live by themselves (80 percent versus 60 percent).
The comparative demographic insights for the most frequently purchased prepared foods find older shoppers (age 55 and above) purchasing certain items less than younger shoppers (age 18-34), such as: packaged sandwiches (42 percent versus 53 percent), packaged sides (37 percent versus 44 percent), and packaged sushi (18 percent versus 40 percent).
Conversely, higher-income shoppers ($80,000 or more annually) purchase specific items more than lower-income shoppers ($40,000 or less), including packaged sides (47 percent versus 40 percent), self-serve salad bar selections (47 percent versus 33 percent); self-serve hot soups (44 percent versus 28 percent), packaged sushi (36 percent versus 19 percent), and made-to-order sushi (19 percent versus 10 percent).
ICC’s Nanette Brown weighs in with potential suggestions for retailers seeking to refine and enhance their prepared food menus. “Specific prepared food items should be advertised in formats that cater to specific demographics,” such as packaged sandwiches, sides and packaged sushi, which are purchased more by younger shoppers. Advertising efforts for these specific items, she says, can be more visibly positioned in areas where younger shoppers notice advertisements, and less in other areas where they don't (think circulars).
Moreover, when considering that shoppers annually earning $80,000 or more purchase more prepared food items, Brown says more highly visible advertising efforts should occur more often in printed and online media, given that this age group is more apt to use/view them.
A particular area of opportunity, adds ICC’s Baer, is breakfast, which he says remains largely untapped. “Closer consideration should be given to availability and increased promotion of breakfast food items, which were the least often purchased.”
Breakfast Opportunities Beckon
Baer’s suggestion bears out recent related insights by Port Washington, N.Y.-based NPD Group, which for the fourth consecutive year found restaurant breakfast occasions increasing in frequency among U.S. consumers, while lunch and dinner occasions have declined. In 2013, consumers made more than 12.5 billion breakfast visits to U.S. foodservice outlets, a 3 percent gain over the year-ago period, according to NPD, while quick service, which accounts for about 80 percent of total restaurant morning meals, showed the strongest increase in breakfast visits of all restaurant segments, with a 4 percent increase compared with the year-ago period. However, morning meal visits to midscale/family-dining restaurants declined by 3 percent.
Found below are highlights of direct responses from ICC/Decision Services’ consumer panel, which asked what advice they would give their local supermarket to improve its prepared food offerings:
- Have more variety of items -- 17%
- Have items prepared from scratch --12%
- Have more organic/healthy options -- 9%
- Properly maintain food items (i.e. stirring, rotate stock, etc.) -- 8%
- Display food items properly to show product appeal -- 7%
- Offer prepared foods at a lower price -- 6%
- Display/provide information about food items -- 4%
- Offer better-quality food products/better-quality ingredients used -- 4%
- Advertise in fliers/online/store -- 3%
- Have more sales/deals for prepared food items -- 3%
- Better customer service in prepared food section -- 2%
- Keep prepared food area clean and presentable -- 2%
- Provide ability to order online in advance/preorder items -- 2%
Additional verbatim insights revealed by ICC/Decision Services’ panelists in Part 3 of PG’s prepared food consumer research study can be found here: http://www.progressivegrocer.com/ICCpreparedfoods_shopperinsights