The growing popularity of prepared foods continues to establish the deli as a destination for innovative hot entrees, grab-and-go meals and samplings of what’s new and delicious. While chicken, pizza and ribs continue to draw shoppers, many stores are offering options inspired by regional and international cuisine and convenient pairings for quick meals and snacks.
“The deli gives shoppers the flexibility and ability to pick and choose from so many options,” says Eric Richard, education coordinator, IDDBA, Madison, Wisconsin. “Shoppers can be indulgent in one meal and healthy at another. They have the ability to customize and have more versatility than in restaurants.”
The deli has long been a draw with its sensory attractions of roasting meats and savory hot entrees. Recognizing a good thing, 70% of grocers added more space to their fresh prepared foods sections in 2017, according to IDDBA’s What’s in Store 2019 report.
Throughout the U.S., deli dollar sales increased 14% from 2016-2018, totaling $33.3 billion in the 52 weeks ending July 21, 2018, representing 4.2% of total store sales, according to Nielsen Total Food View data. Three-quarters saw increased dollar sales over $875 million, an increase of 240 million in units in the past year with shoppers making 32.7 trips/year to the deli and 17 trips for deli-prepared food, according to IDDBA.
One in seven shoppers purchase deli-prepared foods every few days or daily, and millennials and households without children under 18 lead the segment. Despite some competition from online meal kits and grocery delivery, the deli remains a go-to for shoppers who favor scratch-made hot and cold prepared foods and the ability to customize meals and snacks.
Reasor’s, headquartered in Tahlequah, Oklahoma, draws shoppers with scratch-made entrees and sides served at its Brookside Cookhouse. The chain is seeing generational differences in the selection of hot entrees with millennials seeking out innovative proteins such as jackfruit tacos, falafel and rotisserie cauliflower.
“Purchase of hot entrées and appetizers have increased tremendously over the last year,” says Reggie Carmen, director of bakery and deli, Reasor’s. “Convenience is a key area in the growth of hot entrees with a focus on comforting foods and staples made with the best high-quality ingredients.”
Scratch cooking continues to be an important selling point for many instore delis because it speaks to the attributes of real food, local and freshness, all things that the deli area performs well, Richard says. Metropolitan Market, headquartered in Seattle, Washington, is a well-known Pacific Northwest shopping and eating destination. The chain features a poke bar, made-from-scratch meals and a hot buffet featuring breakfast, lunch and dinner options.
The popularity of “speed scratch” solutions and restaurant-quality, ready-to-eat foods can be attributed to a rising segment of on-the-go consumers who want to spend more time at home, according to Mintel. These consumers desire upscale, grab-and-go options, meal kits and customizable, quick premium convenience products for meals, snacks and desserts.
Despite some outside competition, grocery stores remain up to the task. Chains such as Balls Foods, headquartered in Kansas City, Kansas, predict restaurant delivery and meal kits will be a temporary solution for consumers who want hot, ready-to-eat entrees. Balls Foods, which includes Hen House, Price Chopper, PayLess Discount Foods and Sun Fresh grocery stores, offers a range of instore hot entrée options.
“Certainly, restaurant delivery is having an impact on most all food retailers who serve hot ready-to-eat foods, but RTE home delivery is a fleeting solution because most consumers cannot live off of nor afford to eat out at home every night, and it’s not always the most healthy option,” says Mike Tilden, Balls Foods’ director of deli, prepared foods, salad bar and bakery. “That’s when the hot foods in your local supermarket deli become a great go-to solution because there are lots of choices. You can see and sample before you buy. You can ask how it was prepared. You can buy a complete meal or components to another meal and you can control the amount you buy. None of that happens with home-delivered food.”
Evolve and conquer
Blount Fine Foods, headquartered in Fall River, Massachusetts, offers a range of hot entrees such as spicy turkey sausage and orzo pasta and turkey Bolognese in refrigerated and frozen options for foodservice, retail and consumers.
By evolving with the desires of deli shoppers, Sandridge Food Corp., headquartered in Medina, Ohio, transitioned its core business of traditional salads, adding center-of-plate proteins like beef barbacoa, meatloaf, pot roast, beef tips and gravy, grilled chicken and pork carnitas.
The Food Marketing Institute, headquartered in Arlington, Virginia, predicts consumer desire for transparency of ingredients, growers and production methods will continue. The trade association recommends stores that are looking to connect with shoppers should improve messaging around the emotional connections of dinner and family. These associations include a continuing emphasis on health callouts, uncured and nitrate-free deli meat, clean-label options, no antibiotics ever (NAE) and regional cuisine.
“Clean label is important and certainly some consumers are making choices about what they will eat based off food content,” Tilden says. “The school system has done a great job of teaching children about food and eating better so it is a growing requirement.”
In its restaurant-quality, grab-and-go entrees and throughout the store, Earth Fare, headquartered in Fletcher, North Carolina, is guided by its Food Philosophy, which includes the use of meat humanely raised on a vegetarian diet, no antibiotics or added hormones, non-hydrogenated oils; organic beans, grains, flour and pasta; no artificial sweeteners, preservatives, colors or flavors; cage-free eggs; and non-irradiated spices.
The pairing of fresh, quality products with education and friendly, informed staff continues to set the deli apart from restaurants and e-commerce choices, establishing it as a location for knowledgeable information, a place to experience new flavors and a resource for healthy and indulgent options.
“The deli is a destination for all meal occasions,” Richard concludes. “To thrive, delis should connect with shoppers through messaging, have samplings and tastings and continue to focus on what the deli does best.”