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In the past year, nearly three-quarters of supermarket consumers have taken home and eaten prepared foods from the grocery store, and more than half have consumed such items in their markets’ dining areas.
These findings, from a recent study by Acosta Sales & Marketing, indicate that foodservice continues to be a growth category for grocery retailers, and one that by most accounts is here for the long haul.
“I believe there is tremendous opportunity for grocery stores to shift from the historical ingredient/component approach we have seen for many years,” says Mark Hayden, president of Acosta Foodservice for the Jacksonville, Fla.-based marketing consultancy.
Research from “The Why? Behind The Dine,” a July 2014 survey of 1,500 U.S. foodservice consumers, conducted in partnership with Chicago-based Technomic, indicates that consumers view retail foodservice as a convenient opportunity for them to grab a meal for themselves or the entire family. Indeed, lines have blurred to create the “grocerant” — grocery store as restaurant — where ready-to-eat meals have been a major growth area.
“It’s important to create offerings that are high-quality and executed consistently day to day,” Hayden says. “This is where bringing foodservice expertise is important to consult on areas such as equipment, packaging, food preparation, menu design and marketing strategies, to create visibility for their programs.”
That’s definitely been the approach taken by many grocers. One of the latest is Schenectady, N.Y.-based Price Chopper’s Market Bistro, the Golub family enterprise embarking on a chain-wide rebranding as Market 32 (see Ones to Watch, beginning on page 33 of this issue). Market Bistro’s Bistro Blvd., a bold new dining concept PG detailed in a July 2014 Store of the Month feature, is part of the template.
“Prepared foods should be an experience of choice — great ambiance, sensory stimulus,” says Troy Johnson, Price Chopper’s VP of deli and foodservice. According to Johnson, those choices should include recognizable favorites with a twist; compelling offerings for consumers to indulge in; fresh, restaurant-quality convenience; and diverse ethnic choices by location. “Also, health and wellness is a driver — low-sodium, gluten-free,” he notes. “Everyone is reading labels and, now, all menu boards, too.”
Supermarket foodservice is one of the fastest-growing segments of the food industry, the Acosta study indicates. According to Technomic, sales of prepared foods, which include in-store and takeout dining, are up 30 percent since 2008, compared with about 10 percent for the overall foodservice industry during this period.
“With so many options available to them, consumers’ meal decisions intersect across categories on an increasingly routine basis,” the study relates. “In fact, dinner may include a ready-made selection from the grocery store (rotisserie chicken) with a homemade casserole and semi-homemade salad-in-a-bag, while lunch at work may consist of store-bought baked snack chips and flavored water brought from home, with a turkey wrap from a nearby prepared food department.”
When asked to name the three most important reasons they brought home prepared foods from the grocery store, respondents most often said they didn’t want to cook that evening (46 percent); convenience, because they were already at the store (44 percent); and that it was cheaper than eating out (34 percent).
“The biggest opportunity for grocery stores is to focus on quality, consistency and effective packaging for core menu offerings to ensure they meet or exceed consumers’ other away-from-home options,” Hayden says. “It is important to think like a restaurant overall to meet the more demanding expectations of consumers who show tremendous loyalty for quality and consistent away-from-home food experiences.”
Consumer packaged goods companies have also responded with meal solution products or offerings that require some simple home preparation, the Acosta study reveals.
Among them is Charlotte, N.C.-based Stefano Foods, a division of Smithfield Foods that makes pizza, frozen dough and other heat-and-eat items for supermarket delis. “Items from other cultures and countries with unique flavors are desired,” says Alan Hamer, VP at Stefano Foods. “Supermarkets provide a vehicle for experimentation at a fraction of the cost of a comparable restaurant experience.”
Hamer says customization of components “answers the desire to be involved in foods they eat, regardless of culinary skill.” Further, he says, “consumers trust supermarket foodservice when they have physical proof that there is dedication and commitment to the given program.”
The folks at Beaverton, Ore.-based Reser’s Fine Foods, which makes cold salads, salsas and other items for grocery foodservice, see trends in ethnic flavors, including multicultural fusions, and healthier salads with ingredients such as ancient grains, beets, kale or cauliflower.
Brenda Killingsworth, Reser’s trade marketing manager, and her team suggest grocers use branded in-store products to prepare meals to go, call out local products, and market meal solutions online as well as in-store.
“It will be a continued focus of retail to steal share from foodservice restaurants,” Killingsworth says. “Supermarkets are hiring experienced chefs and staff to create in-store dining and full-blown restaurants. Adding things like wine or beer tastings or live music will continue to pull in consumers.”
Among the recommendations from Price Chopper’s Johnson: “Don’t play it so safe. Keep an eye on overall mix. Build a loyal relationship with consumers through innovative, signature items in prepared foods.”
Further, communicating with Millennials is an opportunity, via mobile apps, iPads, kiosks and digital menu boards.
Says Johnson: “Retailers need to balance quality, consistency, food safety and staffing. The entire store must develop a reputation as a fresh food destination, not just the same old chicken, pizza or packaged food in a case, but an interesting, exciting solution that drives repeat business.”