The Growing Demand for Fresh Foods

In today’s health-conscious world, convenience stores are expanding their menus to include more healthy snacks and meals.

By: John Lofstock, Editor.

While cash-strapped consumers are cooking at home more often to help ease tight budgets, a new study by the International Dairy Deli Bakery Association (IDDBA) found that these shoppers are on the lookout for fresh, healthful deli foods to stretch their dollars and find a balance between convenience and value.

These findings, part of IDDBA’s “What’s In Store 2011” trends report, should serve notice to convenience store owners looking for effective programs to outperform their competition.

In the report, consumers said they have modestly eased their penny-pinching habits since the height of the recession, but value is still key, making price and perception of price the prominent driver of purchases. Nearly two-thirds of respondents admit to monitoring their purchases more closely, and 65% are buying fewer items on impulse—down from 75% in 2009, IDDBA found.

Sixty-four percent of consumers said they’re paying extra attention to advertised prices, down from 73% in 2009. Sixty-three percent say they stick to a shopping list, and 54% are using coupons more often. Thirty-nine percent of shoppers said they visit discount stores more frequently in the current economic environment, a statistic that climbs to 50% if one household member is unemployed.

The effect is already becoming evident at supermarkets. Supermarket deli department sales were flat at $22 billion, according to the most recent figures available from IDDBA. Forty-five percent of consumers said they bought the same amount from their supermarket deli in 2010 compared to 2008. But the percentage who said they bought less has increased significantly since 2004—from 23% to 34%.

Service Matters
While customers want quality, they are also expecting better value in terms of price paid, service consistency and food quality. Consumers are also more interested in using technology, and many would use self-service terminals if available, according to Eric Giandelone, director of foodservice research at Chicago-based Mintel and author of “Mintel Menu Insight’s Foodservice Trends” for 2011.

“Fierce competition in the industry will continue, and proper menu, service and concept planning must be ongoing to prevent business failure,” Giandelone said. “Restaurant-goers value menu transparency, but still want the occasional indulgent dining experience.”

Deli programs are becoming the bridge between dining out and dining in as time-strapped shoppers shy away from steeper restaurant prices, but still desire high-quality, easy-to-assemble meals. The deli prepared food category has grown to over 50% in the last five years, while deli meat and cheese dollar shares have gradually declined to around 24% (meats) and 19% (cheeses), IDDBA reported.

Versatile rotisserie meats, like chicken, have been surging in popularity. These can be eaten as they are, as well as in leftovers, sandwiches, salads and soups, allowing consumers to stretch their dollars in this recessionary period. Consumers are also finding convenience and value in side dishes displayed in delis as part of grab-and- go meals that consumers can take home for dinner.

Forty percent of shoppers said they eat sliced-to-order deli meats once or more a week, according to IDDBA’s “Consumers in the Deli 2010” report, perhaps indicating that they’re packing more sandwiches for lunch to minimize food costs.

Deli salads can be healthy and convenient additions to dinner, or even eaten as snacks. Mediterranean-inspired dishes like tabouleh, as well as Asian-inspired selections such as edamame, and Middle Eastern cuisine, like couscous, are becoming more mainstream and popular with health-conscious consumers, according to IDDBA.

Delis are adding such salads to olive bars, and offering them pre-packaged in the self-service deli, as well as in the service case. The bold new flavors also happen to coincide with the healthful ambitions voiced by many deli customers.

Evaluating Your Offering
With First Lady Michelle Obama’s Let’s Move! campaign against childhood obesity in full swing, Americans are looking to the deli for fresh, nutritionally balanced fare. Sixty-four percent of consumers report that someone in their house is overweight, IDDBA research shows. More than half of respondents have someone in their household with high cholesterol or high blood pressure. Nutritious children’s dishes, smaller portioning at a value price, and sensitive-ingredient products, such as gluten-free and allergy-conscious foods, are also a hit at delis.

Eighty-eight percent of those surveyed in the National Restaurant Association’s “Chef Survey: What’s Hot in 2010” noted local product sourcing as a trend. Foods grown, raised or produced nearby carry a “freshness halo” that shoppers associate with nutritious items. Local produce, meats, and seafood used in deli salads or entrées are attracting customer interest, and can be cross-merchandised with products like local wine and beer beverages, to attract a niche audience.

Interestingly, according to the fourth annual Convenience Store Decisions/Balvor 2011 Foodservice Outlook Survey, c-store retailers appear to be using the downturn in the economy as an opportunity to re-evaluate their foodservice offering in order to improve their competitive positioning.

“Given that consumer taste and needs continue to change, it’s only natural that retailers adapt their product mix to ensure that they stay in step with current and emerging trends,” said David Bishop, managing partner of Balvor LLC. “In some instances, the changes may simply reflect the entry of new product segments, such ethnic wraps and egg rolls.”

Packaged sandwiches have long been a staple of many c-store foodservice offerings and the survey confirms this is still the case.
Bakery goods, while maybe not actually prepared on site, are the second most prevalent item offered in convenience stores today, typically consisting of bagels, cookies, doughnuts and muffins.

“Although retailers have sold packaged sandwiches for a long time, a lot has changed relative to the quality of the ingredients, packaging and labeling available today in convenience stores,” Bishop said. “These improvements have been driven in part by technology, logistics and a stronger foodservice mentality.”

An expanding array of good-for-you products is also pulling health-conscious customers into the dairy department. IDDBA found that fortified, fiber-rich and organic options line dairy coolers as the anti-obesity movement in the U.S. ramps up. Significant growth for the yogurt category is predicted through 2014.

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