DELI, BAKERY AND PREPARED FOODS: Fresh Remains Key For Customers

The tendency for Americans to want more fresh and fresh prepared food is clearly growing, which is why traditional U.S. convenience stores have been joined by overseas chains like Tesco and Famima.

"I think the lifestyle is really changing here," said Hidenari Sato, executive vice president of Famima Corp., the U.S. subsidiary of Japan’s FamilyMart Ltd., which operates about two dozen stores in the Los Angeles market. "People want something easy to prepare, healthy, fresh and good to eat, in other words an alternative to traditional fast foods. This is where convenience stores have a real opportunity."

Smaller families mean that people aren’t shopping for groceries to last for a week, rather just a couple of days at a time, Sato pointed out. Since they are shopping more frequently, it’s logical that consumers are buying more fresh prepared sandwiches and other deli foods.

"The products that are moving well for us are deli bread, sandwiches, paninis and breakfast breads like muffins and wraps," Sato said. "Fresh grab-and-go is increasing, especially during breakfast hours."

The International Dairy Deli Bakery Association (IDDBA) reports that both higher income and ethnic consumers are more likely to buy deli. People with incomes of $100,000 or more visit deli and bakery sections 5.7 times per month, above the 3.6 times for consumers as a whole and more than twice as often as people living in households with annual incomes of less than $25,000. Hispanics are the exception to the income rule, buying deli 5.4 times per month.

Given escalating food costs, Willard Bishop research suggests retailers can minimize price vulnerability by using superior offers that target customers specific needs and then tailor the strongest pricing and promotional solutions to their preferred categories.


Health Factor

Convenience and health meet again in the deli section. More than 70% of those responding to an IDDBA study felt that delis are more convenient than restaurants, and more than 60% said they offer healthier fare.

Consumers, however, said c-store delis trail restaurant in offering innovative choices. But while they want the taste and appearance of deli foods to improve, they’re not looking for food choices that simply mimic those served in restaurants, suggesting that deli managers will do better by using restaurants as sources of menu inspiration than by imitating them.

While more Americans say they want to eat healthier fare, sales figures don’t always show that desire translating to action. Though sales of whole grain bread products continue to rise, bakery statistics show cake sales are expected to increase by 12% by 2011, with sales highest in the South and Central areas of the country.

Wavering cookie sales, both fresh-baked and packaged, have encouraged manufacturers to produce more whole grain choices with less sugar and fat.

Doughnut sales, while dropping, still account for nearly a third of convenient breakfast choices. Unfortunately, while manufacturers of other bakery products have been able to find substitutes for cooking oils high in trans fats, these products don’t work for doughnuts, so if current concerns about trans fats grow stronger doughnut sales could start to falter.

Bagels, however, are doing just fine, especially in families with children, who tend to buy more bagels than other consumers.


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