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    LIVE FROM NRA: Delivering With Deli-Prepared

    Nielsen's Sarah Schmansky explores a 'fresh' approach

    By Kyle Shamorian, Stagnito Business Information

    As the line between retail and foodservice continues to blur, the growing popularity of in-store deli-prepared offerings and convenient meal solutions shows no sign of slowing down.

    And those members of the grocery industry and other retail channels who position themselves on the forefront of this lucrative segment will be better prepared to capture consumer spend, according to Sarah Schmansky, director of account services at Nielsen Perishables Group, during her presentation, "Trends in Fresh Retail Foodservice – Deli-Prepared," at the NRA Show 2014 held in Chicago May 17-20.

    Although grocery maintains leadership in the fresh category – 64 percent of market share – the industry's stronghold is beginning to wane as other retail channels offer greater availability and assortment, including club stores (12 percent, up 2 points) and mass/supercenters (15 percent, up 1 point).  

    Schmansky further confirmed the fresh category's value, noting that 87 percent of households purchase such foods ($70 per year on average), accounting for an average of 29 percent of total sales, and 40-45 percent for top retailers.

    Trends Driving Deli-Prepared Growth

    The renewed energy within the category dovetails nicely with today's consumer lifestyle, Schmansky noted, pointing to convenience, personalization and health and wellness as key drivers, as well as renewed interest in foods infused with multicultural flavors.

    Consumers look for options that require little to no time to prepare and are easy to transport on-the-go, Schmansky said, giving examples like deli prepared chicken and value-added veggies, as well as desserts in a cone or jar as among the items seeing substantial growth.

    The continued focus on health and wellness is nothing new – the popularity of mainstays like low-calorie, gluten-free, all-natural, organic and no trans fat are as popular as ever – but as the trend evolves, consumers are looking for options that support proper nutrition without scarifying on taste and quality, particularly during the ever-popular snacking occasion.

    Additionally, Schmansky continued, as the food and beverage industry becomes increasingly fragmented, and thus offers consumers more choice as to where they spend, the trend toward personalization and customization will continue its growth as well.

    For retailers looking to further enhance their fresh departments, Schmansky recommends a menu that boasts breadth and versatility; portion sizes that offer variability; flavor combinations that provide an opportunity to "mix it up"; as well as transforming the department into a "complete" meal solution center, fulfilling the full spectrum of customer needs.

    Boomers Vs. Millennials

    Schmansky explored two of the nation's most lucrative consumer groups, Boomers and Millennials, as well as the strategies that retailers can implement to meet their respective needs.

    Boomers, who account for some 50 percent of spending in the food and beverage industry, value nutritional foods that support heart health, and 44 percent desire smaller portions. With regard to the fresh section, this age group comprises strong deli shoppers who gravitate toward deli snacks and sandwiches.

    Members of the Millennial generation spend $200 billion annually, and will overtake Boomers as the primary spending group by 2020. Millennials value price over convenience, a technologically integrated in-store experience, and are most likely to spend their dollars on afternoon snacks, often as a meal replacement. This group tends to index higher in center store departments, despite widely held assumptions, but in the fresh section they index higher in deli sushi and deli pizza.

    Schmansky concluded that in this highly competitive marketplace, retailers can help redefine their identities in the fresh space, especially given that retail is more often a substitute for restaurant visits, particularly for these key consumer groups.

    "Focus on value," she said. "Each group wants value with the products they purchase. Think about the experience they want. Rethink how you're reaching them."

    By Kyle Shamorian, Stagnito Business Information
    • About Kyle Shamorian In his digital editor role, Kyle Shamorian oversees all content on progressivegrocer.com, Progressive Grocer’s online extension that features real-time daily news, exclusive content, new products, blogs, and related multimedia products. In addition to writing and editing content on a wide range of grocery industry issues, Kyle helms the Brain Food department in PG’s print edition, which spotlights shopper behavior and consumer trends in the retail industry. Before joining Progressive Grocer’s editorial team in July 2012, Kyle, a 2003 graduate of Marquette University, previously managed digital platforms for a variety of industries.

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