Talk about pivoting. With self-serve salad and hot bars on pause—perhaps permanently—and social distancing the new order of the day, in March grocers were forced to reinvent the deli/prepared foods area overnight.
At the same time, many restaurants across the country were temporarily shuttered or open for takeout only due to COVID-19, creating a perfect storm of opportunity for grocery stores in the grab-and-go game.
How does dining on the iconic cuisine of Commander’s Palace in the comfort and safety of home sound? At the start of the pandemic, Thibodaux, La.-based Rouses Market took deliciously inspired action, testing a program that allowed customers to purchase grab-and-go meals prepared by some of their favorite local restaurants including Commander’s Palace and Big Mike’s BBQ, in its stores.
H-E-B partnered with Max & Louie’s New York Diner to bring the beloved San Antonio deli’s soups and prepared foods to its stores throughout Texas, while Schnuck Markets, which has been partnering with St. Louis restaurants since April to sell their grab-and-go meals in certain stores, recently extended those partnerships to focus on chef-prepared meals from Black-owned businesses, including Cathy’s Kitchen and Ms. Piggies’ Smokehouse.
Meanwhile, Metcalfe’s Market, an independent grocer with three stores in and around Madison, Wis., recently forged a successful collaboration with a local ramen restaurant to offer grab-and-go meal kits sold at a premium.
“Before the pandemic, we had full-service meat and seafood, service deli with sandwiches, self-serve hot Asian bar, a wing bar, a salad bar, and a bulk section with coffee, grains, candy and more,” says Tim Metcalfe, president of Metcalfe’s Market. “At the start of COVID-19, all of it went away.”
To continue to provide customers with the high-quality and convenient foodservice they had come to expect from Metcalfe’s Market, the grocer began selling meal kits by Red Light Ramen, the chef and owner of which, Justin Carlisle, is a multi-time James Beard Award nominee for Best Chef Midwest. The “hugely successful” single-serve kits, which included par cooked ramen noodles, broth, protein and toppings for $13 to $14 each, “sold like gangbusters,” says Metcalfe.
At the height of the pandemic, Metcalfe’s three stores were ringing a total of $12,000 a week from that one item alone. “Customers liked that they could go to the grocery store and get restaurant quality meals, and it took off,” he says.
Metcalfe attributes the partnership’s success in part to Red Light Ramen having the infrastructure to prepare the food, package and refrigerate it, and transport it to the stores. Strong brand awareness for the ramen restaurant was also key.
“I see a future partnering with restaurants,” enthuses Metcalfe, who is pursuing other restaurant-branded deals in the deli and bakery. On a recent Saturday, Metcalfe’s hosted a “bakery blowout” featuring market pastries from Graze. The local James Beard Award-winning restaurant sells its legendary pastries, including a ham and swiss market bun and chocolate croissants for $5 each, at the farmers market. Metcalfe’s Market sold four-packs of assorted Graze pastries for $20.
The Deli Reawakens
While deli and prepared foods departments gradually reopened as stay-at-home orders lifted, the vast majority continue to operate at reduced capacity. But in these challenging times, the opportunities in grab-and-go, as well as delivery and curbside pickup, abound.
When Wisconsin moved into Phase 1, Metcalfe’s Market reopened its delis at 50% of its usual capacity. “We picked our top 30 items and that’s all we put out,” Metcalfe recalls. “We had 40 feet of deli only half-full, and the same in our seafood and meat service.”
Despite expanding its selection of cold grab-and-go and reintroducing a full-service version of its formerly self-serve Asian food bar, its deli sales remain at 65% to 70% of pre-pandemic business. The decline in shopper trips and the rise in consumers working from home have impacted deli/prepared food sales.
Before COVID-19, Metcalfe’s did $10,000 a week in grab-and-go sushi sales. “We didn’t really change our offerings, but sales have been down 25% during COVID,” says Metcalfe. While average per transaction sales at the Market “went right through the roof,” from around $35 to $90 per basket, shopper visit frequency dropped significantly, as did the lunch crowd. “People are now buying one to two weeks-worth of groceries at a time. Sushi isn’t going to last that long,” he says.
But while sales of deli offerings meant for immediate consumption such as sushi or made-to-order sandwiches may suffer temporarily, other aspects of deli/prepared foods are ripe with opportunity.
With 80% of consumers delaying a dine-in restaurant experience, according to WGB sister company Technomic, “food to go has never been more important,” asserts Marilyn Stapleton, director of marketing for Anchor Packaging in St. Louis.
“Shoppers’ needs for convenience and time-saving options have not changed,” she continues. “Fully prepared entrees and sides to satisfy the various appetites and mealtimes remain the same. Currently, store traffic is down, and sales may not be as robust from after-work commuters, but the need for hot-to-go and refrigerated, ready-to-microwave-and-eat remain.”
Stapleton also sees demand for meal kits, delivery and curbside pickup continuing to soar. “The deli should be promoting their hot and cold options on their loyalty apps to remind consumers of their meal solutions,” says Stapleton, who adds that family meal portion sizes—both hot and cold—have become increasingly important, because a larger number of household members are now gathered around the table at one time.
Anchor Packaging—which designs its products, such as its line of Crisp Food Technologies containers, to meet the need for hot grab-and-go, heat-and-eat, and home delivery—says drawing shoppers to the deli from other areas of the store is also key.
Stapleton points to a Walmart store she recently visited: “The first thing you see is the sign announcing the hot meals available in the deli. [It’s] a great way to drive impulse sales when your shopper may not even be planning on a visit to that department.”
Clean and Comforting
As consumers seek the convenience of grab-and-go meal kits to mix up food preparation during the pandemic, they also continue to gravitate to clean labels, quality ingredients and comfort foods.
Blount Fine Foods has made a name for itself in the fresh soup category and more by partnering with successful restaurant brands, including Panera Bread and Legal Sea Foods, as well as leveraging its own brand identity and private label.
The Fall River, Mass.-based company recently expanded its Blount’s Family Kitchen line to include two additional 12-ounce meal bowls: Chicken, Bacon and Noodles in a Ranch-Style Sauce and Chicken and Penne with Marinara Sauce. Both are crafted with chicken that has been raised without antibiotics and are microwaveable.
“Comfort foods and convenient meals that are ready in minutes and packaged in a bowl, so you don’t have to dirty a dish, are what people want now and what they’ll continue to crave post-pandemic,” says Bob Sewall, EVP of sales and marketing for Blount.
“Fresh, clean labels have also really added to allure of these meals,” adds Sewall, who predicts a strong future for the category. “I think the more robust grab-and-go section is here to stay. Don’t get me wrong. We love the hot bars, but until people can shop the way they used to, rather than out of necessity and as fast as they can, this is how to captivate customers with the allure of fresh food.”
With grocers converting former salad and olive bars into additional space for grab-and-go items, including packaged cheese, pre-sliced meats, charcuterie and more, these areas are well-positioned to promote a variety of convenient and delicious snacking solutions.
“We believe the grab-and-go segment will continue to be relevant after the pandemic,” says Sean Moran, VP of sales for BelGioioso Cheese in Green Bay, Wis. “Shoppers appreciate freshness and the convenience of having their deli cheese pre-sliced so they don’t have to wait in line at the counter.”
BelGioioso offers a variety of pre-packaged Snacking Cheeses that play well in the grab-and-go space. The company provides a host of convenient snacking options for everyday consumption, from its Mild Provolone Salami Rolls to its pre-sliced 12-ounce Italian Cheeseboard to its new American Grana Snacking Cheeses. “Grab-and-go snacks are more relevant than ever,” says Moran.