KANSAS CITY, MO. - Before the coronavirus (COVID-19) pandemic shook the category, deli prepared foods like sandwiches were performing very well. Data from IRI shows that in the 52 weeks leading up to Jan. 26, prepared-convenient foods totaled dollar sales above $21 billion with sandwiches accounting for nearly $1.8 billion. The only deli prepared items that outperformed sandwich sales in 2019 were salads and appetizers.

COVID-19, however, has had an adverse impact on deli prepared foods which has been largely driven from many grocers limiting or shutting down deli operations to focus on other things like keeping shelves stocked. From March 22 to May 3, total deli prepared dollar sales ranged from 24-47% below dollar sales in the same timeframe in 2019, while sandwich dollar sales specifically came in between 29-49% below 2019 numbers during the same timeframe.

“Before the pandemic, deli prepared was probably the top producer of all the fresh departments,” said Eric Richard, industry relations coordinator at the Madison-Wis.-based International Dairy Deli Bakery Association (IDDBA). “This is something no one was prepared for and the fresh departments and prepared foods sections will have to evolve.”

COVID-19 solutions: visibility, grab-and-go and online

Richard highlighted that online ordering has increased opportunities for sandwiches in the times of COVID-19. He said the desire for prepared foods is still there, but there are limitations on how consumers can acquire prepared foods.

He suggested that retailers should think as a restaurant would. Restaurants are heavily relying on online ordering, pickup and delivery services, and retailers can do the same thing with prepared deli options like sandwiches. Richard doesn’t see increased online ordering going anywhere anytime soon, and grocers will need to take advantage of that.

“There’s probably a good chance that people will be utilizing online ordering and that could factor into store sandwich programs as well,” he said. “Sandwiches are the perfect type of food to order and either have picked up or delivered.”

Richard also pointed out that consumers are now making larger, and more, planned shopping trips, a trend that is expected to continue even as stay-at-home orders lift across the United States. Since a consumer likely isn’t going to jot down a single sandwich on their shopping list, grocers are going to have work harder to remind consumers about the sandwich offerings the store has.

While it’s important for grocers to still use traditional marketing routes like advertising through social media and television channels, most important is going to be making the product prominent in the store, as Richard highlighted.

“Especially now, you don’t want the consumer to have to search for it,” Richard said. “So if they’re already on their stock-up mission and they see a display table that’s prominently placed somewhere in the store deli or even more toward the front of the store where there’s better engagement, because it’s going to be more of an impulse type of sale now versus in the past.”

For Denville, N.J.-based Anthony & Sons Bakery, a company that supplies bread for grocery sandwich programs across the country, eye appeal has always been one of the most important factors when it comes to sandwiches, which is important now more than ever in helping drive those impulse sales.

“The quality of the product has to have that eye appeal,” said Ben Rizzitello, vice president of marketing for Anthony & Sons. “It’s very important. The bread is the first thing people see when they’re looking at a sandwich.”

Even before COVID-19 came into the picture, Rizzitello was seeing increased consumer interest in grab-and-go sandwiches, which he expects to accelerate in post-pandemic times.

Rizzitello pointed out that Anthony & Sons’ breads are built to hold up and avoid the sogginess that can sometimes occur from being put in the refrigerator for grab-and-go. Anthony & Sons has the option to slice its breads thicker with five-eighth-inch slices opposed to a traditional half-inch slice that gives the bread more of an artisan feel with a lighter interior in a thicker slice. The company takes their time when it comes to fermenting dough, allowing longer fermentation times for that European authentic flavor.

 “I think people are going to prefer grab and go over standing and waiting for someone to handmake their sandwich,” Rizzitello said. “The perception of getting something that’s in a clean package is going to be a lot different than what it is today.”

Trends are still trends

While it is difficult to predict the exact future of the category, Richard believes consumers are still going to be interested in the same trends that were popular before COVID-19 hit in March.

“Overall, trends are trends,” Richard said. “I think now we’re in that spot where people are looking for more common foods but once we’re passed this I think people will start thinking like they did pre-pandemic and look for certain types of foods, and where we left in January is where we will pick up.”

Richard also foresees the possibility of a sandwich “reawakening” because of the fact that the pandemic has led to more people making their lunches at home, and a lot of them are probably making sandwiches, a traditional lunchtime staple in US households. This could remind consumers that sandwiches are delicious and viable options for lunches going forward.

“There might be some greater interest in not just the typical ham, turkey and roast beef sandwich, but a greater desire to explore different deli meats,” Richard said.

One of the instore deli’s biggest advantages over restaurants when it comes to sandwiches is the wide range of sandwich possibilities grocers can offer. Whereas a sandwich shop is limited to a tailored menu of meats, cheeses, breads and toppings, the grocery deli has the whole grocery store at its advantage with a large variety of meats, cheeses, breads and toppings it can offer from within the store.

Like across most fresh categories, there’s an enhanced consumer interested in unique and ethic flavors, said John Pauley, chief commercial officer of Smithfield, Va.-based Smithfield Foods.

“Younger generations are increasingly multi-cultural and looking for more variety in their cuisine,” Pauley said. “Kretschmar’s (a brand of Smithfield Foods) Masters Cut line of premium deli meats and cheeses offers consumers delicious flavors.”

Kretschmar’s Masters Cut line offers deli meat and cheese varieties like:

  • Black Pepper & Jalapeno Ham
  • Maple & Brown Sugar Ham
  • Sun Dried Tomato Turkey Breast
  • Cajun Style Tukey Breast
  • Sriracha Seasoned Turkey Breast
  • Chipotle BBQ Chicken Breast
  • Habanero Jack
  • Smokey Sharp Cheddar
  • Lacey Swiss
  • Garlic & Dill Cheddar Cheese
  • Horseradish Cheddar
  • Fontina Cheese

Also, on par with trends that apply across fresh categories: health and wellness. Consumers want food products that support a healthy lifestyle, that’s why rye is one of Anthony & Son’s bestselling sandwich breads.

“The rye bread is a much healthier bread because of the benefits, it's higher in fiber and has a small amounts of fat as well as a fairly lower gluten content which delivers a better for you product,” Rizzitello said. “Not only that, you’re going to have the uniqueness of the rye bread because there’s so many different types and flavors.”

Rizzitello said the company has also found that consumers are increasingly moving away from sandwiches made with a traditional soft, hoagie roll bread to heroes made with a lighter artisan style crumb that still has the stability to hold product.

Rizzitello pointed toward Anthony & Sons’ artisan rustic hero, a European-style bread that’s crunchy on the outside and airy on the inside. Not only is artisan on trend, but it’s clean label and non-GMO, which helps make a healthy sandwich.

“Now not only is your bread healthy,” Rizzitello said. “But now the ingredients that you're going to put in it are a cleaner label, healthier for you type of product that consumers are looking for today.”

Dorothy Lane’s success with feature flavors

As stay-at-home orders are lifting across the United States, and consumer hoarding patterns are easing and making room for deli counters to begin to fully reopen, Dayton, Ohio-based Dorothy Lane Market is eager to reinstate its sandwich of the month program and shift its focus back to specialty choices instead of just the traditional staples.

Carrie Walters, corporate chef and culinary director of Dorothy Lane, said the grocer has had wide success through offering seasonal and thematic flavors in their sandwich program. In 2019, Dorothy Lane did monthly food destinations — Thailand, for example — and then geared a sandwich of the month toward the monthly destinations that really drew customers into the store.

Over the last couple of months, however, the company has had to shelve its monthly flavors and sandwich specials, but the grocer plans to bring back the program in June with specialty sandwiches highlighting local produce and ingredients

“It’s not that things have changed that much with COVID, but it’s time to provide more of what we normally do,” Walters said. “It gets people kind of excited.”

This story is from the June 2020 issue of Supermarket Perimeter. To view the full magazine, click here.