Supermarket departments are working together more than ever when it comes to their prepared foods offerings, incorporating a variety of ways to cross-merchandise and innovate new ways of foodservice bundling. Indeed, prepared foods is a segment of the industry that’s growing so fast that it’s now seen as a barometer of a store’s overall success, according to a study done by Nielsen Perishables Group.
As such, now is the perfect time to reexamine exactly how those foods are prepared, where appropriate investments should be made, and most importantly, how different departments around the store perimeter can work together and cross-merchandise for increased profits all around.
First let’s look at one of the best ways to instigate this kind of multidepartmental cooperation: foodservice bundling. Various store departments are creating and merchandising fully prepared, ready-to-eat meals, and their retailers are banking on that kind of foodservice bundling being the next big grab-and-go hit.
“We must continue to find ways to help make our shoppers and their families’ lives more convenient, healthy, and happy,” says Pat Rogers, delicatessen specialist for Hen House Markets, which just opened a recently remodeled store in Leawood, KS, that has redefined the chain as a modern, convenience-centered supermarket with prepared food offerings above and beyond what they’ve previously had.
One of those offerings is their new What’s for Dinner? program, wherein a customer can come in and grab a bag already stocked with an entire meal for a family of four, featuring items from the bakery and deli departments. Targeted specifically for families on the go, it’s been one of a number of new prepared-foods programs the supermarket has put in place.
“The success of the program in the beginning was very strong, and continues to be a valued and appreciated option for the families we serve,” Rogers says. “As a retailer, we understand how busy family households have become. With both parents working every day as well as the kids’ activities, there’s very little time to spend in the kitchen.”
The bags feature a salad, main course, rolls or other bread products, dessert, and often a side, all for $22, though there are $20 specials on specific bags Thursday through Sunday, with Sunday’s featuring more breakfast-related items like quiche.
Ready-to-eat vs. ready-to-heat
Another program Hen House has along these lines is call The Meal Deal, Rogers says. “It’s usually a meal where the components come from many departments, such as a pasta meal that may have pasta from grocery, ground beef from meat, marinara from deli, and garlic bread from bakery.”
The primary difference between the two programs, he says, is thatwhile the What’s for Dinner? program is composed of completely prepared foods that may at most need reheating, The Meal Deal program consists of foods that usually aren’t prepared, but ready to be tossed in the oven to save on prep time.
“Marketing is usually done through our weekly printed ad in addition to point of sale in the store,” Richards adds. “Merchandising all these items together is also an important aspect to the success and convenience of the programs.”
Rogers says that both programs have been successful, but since both have only recently been rolled out, there is the question of whether one will end up doing better than the other. The success of bundling completely prepared meals is virtually doubtless as of right now, but what of the other programs similar to it? As it happens, Wade Hanson, principal of research firm Technomic, spoke of this very thing at the National Restaurant Association’s annual trade show in May. Hanson was invited to speak for the NRA’s first-ever “Food Service at Retail” day during the four-day program of lectures and seminars.
“Ready-to-heat prepared foods will gain traction in retail foodservice,” Hanson predicted. “Again, grab-and-go and ready-to-eat is very successful, but when we talk about ready-to-heat — that’s something that’s going to be getting more and more traction. For instance, as we see more ethnic entrees emerging within the retail channel, you’re going to see more of a need to add a reheating component to that.”
He went on to elaborate on the difference between this and previous, similar programs that in the past haven’t gained as much traction — including those like The Meal Deal.
“It’s important to note the difference between ‘ready to heat’ and something like ‘ready to bake,’” Hanson said of his predictions for foodservice in both the supermarket and c-store channels. “Ready-to-heat is something simple for the consumer. They’ll say, ‘If it’s ready to bake, that’s not the convenience aspect I’m looking for. I don’t want to take something home and put it in the oven for 40 minutes. Now if I have to reheat it for two or three minutes and it’s not going to compromise the quality, that’s a ready-to-heat option that I’m looking for.’”
But who knows? In an industry changing as quickly as retail foodservice is, it’s anyone’s guess as to what will prove to be the most successful strategies in hindsight, and as far as Hen House goes, so far, so good. The main takeaway seems to be that Hen House Markets is poised for success because they’re investing heavily in prepared foods, grab-and-go options, diversity of cuisines, and most of all, convenience. As long as retailers continue to invest in these attributes, they can be confident they’re choosing the right path toward improved customer satisfaction and a bigger bottom line.
How to accomodate current trends
While some trends like grab-and-go seem easier for supermarket departments to collaborate on over the long-haul, other trends like clean-label will require greater change within the departments themselves before they can bring all of their wares to programs like foodservice bundling. For example, this could include providing grass-fed, antibiotic-free meat at the deli counter; offering cage-free eggs and cheese alternatives in the deli; carrying organic and non-GMO produce in the perishables department; or incorporating functional ingredients in what your store produces in-house, which would allow for the offering of things like gluten-free breads and energy-boosting muffins in the bakery. (For more information on functional ingredients, see Page 20 of Commissary Insider).
Another good example of a trend that yields tremendous potential for this kind of cooperation is protein, which almost every center-store item now features either inherently or in various ways that have only recently been developed. Many of these were made by brands that jumped on trends like this quickly, and their endurance in the marketplace is a testimony to how their success can be applied longterm to a supermarket’s own products and collaborations.
“Bread makers have joined meat snack sellers and dairy product producers on the high-protein bandwagon,” says Tom Vierhile, innovation insights director for Canadean. Protein was the top recurring trend he noticed at the IDDBA conference in June. “The ranks of protein snacks are growing. Prime Foods’ Eggs on the Run Pro-Go Protein Pack combines a hard-cooked peeled egg, Colby cheese, and dark chocolate-coated almonds for an unlikely protein trifecta. Kontos Foods’ new Greek Lifestyle Flatbread has 15 grams of protein per wrap, and is one of a growing number of breads advertising elevated protein contents. ”
Can you imagine how popular your foodservice bundling could be if your various departments’ in-house foods were made with these hot-topic ingredients, and then paired with these on-trend products? These brands’ success so far illustrates how the perishables, dairy, bakery, and deli departments can work together to produce similar buzzword-oriented prepared foods with their own resources.
Granted, making the change to having your different departments produce their own clean-label or high-fiber foods is a tall order that requires high investment, but the potential ROI is huge. Doing so could increase not only prepared foods sales, but sales for each of the departments involved, which in turn could foster further cooperation and innovation between them — all of which means more profit.
Cross-merchandising and displays
Changes don’t always need to run so deep though, and there are many simpler ways that departments can work together to achieve positive results. Displays and product placement in and between departments is an easy key to increasing multiple department sales and basket size.
Departments, at the end of the day, don’t need to be exclusive. Artisan bakery bread can be placed in a display case next to choice sides of beef, chicken and seafood, with a wrack featuring not only those breads within arm’s reach, but tear-off recipes that show how they pair with the various meats and can be included in new and exciting dishes at home. This strategy is a very effective method of product placement.
Packaging company Robbie Fantastic Flexibles found an opportunity for departments to further cross-merchandising like this through single-serve pouches. Penny Sweeney, communications manager for the company, says that the idea came to them when someone at the company asked why a retailer didn’t place any of their bakery’s cookies in their prepared foods department. The retailer responded that no one wants to buy a whole box of cookies with only a few pieces of fried chicken. So Robbie developed the individual pouch, and later, a clip strip that holds a number of them and can hang on walls and display cases, as well as other merchandising holders for countertops.
“That really took off,” Sweeney says, “and now we have retailers doing custom bakery and deli bags. So someone will buy a few cookies with their fried chicken and take it home, and their wife will say ‘Wow, what a great cookie, where did you get it?’ So these are really helping retailers brand the perimeter of the store.”
Robbie’s bags and pouches come in varying sizes, and allow for departments to put a number of products into the bag, seal it up, and display it in another department next to complimentary items. The single-serve pouch is primarily used for bakery items and sweets, but the company just recently introduced a snack pouch that can hold more as well.
“We have one retailer who fills his with almonds and puts them in the produce department so that customers can have a little salty and sweet together with their fruit,” she says, noting that things like nuts could also be placed near salads, or fruits could be put near the meats department for sweet and savory recipe suggestions.
“We also have bulk bags, where the produce departments can put a mix of different fruits and vegetables together,” she says. The possibilities for this packaging in particular seem endless. Not only can a customer quickly go through the department and pick up a bag with all the assorted fruits they want, but different vegetables could be assembled for soup bases or even meal combinations, not to mention foodservice bundling like that employed by Hen House.
Cathy Scott, store director of a separate Hen House in Missouri, says that her departments have weekly meetings where they discuss how they can cross-merchandise their wares through product displays, as well as directives that come down to them from corporate headquarters on those and other product placements.
“They have conference calls with each department on a weekly basis, and their merchandisers will talk to them about putting different items together,” Scott says. “For example, we may have a setup for tacos, and we’ll have all of our different sauces set up there, and produce may set up baskets with onions, green peppers, tomatoes, and other products that are shelf-stable.”
The store will then bring in items from the center of the store, like tortillas, tortilla warming bowls, and specialized tongs. The whole display can then be set up near the meat counter for maximum engagement.
“We try to bring in as many of our items as we can, and then have less facing on our shelves so that we can have more varieties of any given product,” Scott says.
The deli and bakery departments are often directly across from (and sometimes right up next to) each other in a given Hen House, with prepared foods and fresh produce between them and specialty cheeses and imported items around the perimeter of the setup. The departments are placed close together so that the staff is encouraged to talk with each other as well as the customers, suggesting pairings with items from all over the store for those looking to try something new.
In the end, it’s this kind of interdepartmental cooperation that brings strategies like foodservice bundling and cross-merchandising even greater success to those retailers taking advantage of trends and ramping up their prepared foods offerings.