Grocery stores could give restaurants a run for their money through the continued growth of retail foodservice. That was a key theme of the inaugural keynote presentation Sunday of the 2023 International Dairy Deli Bakery Association (IDDBA) conference in Anaheim, California.
IDDBA kicked off its 2023 show with a presentation from IDDBA Vice President of Marketing Whitney Atkins and Heather Prach, the association's VP of education, which highlighted trends and areas of opportunity in the industry.
Prach noted in the presentation that home delivery and e-commerce have been “difficult for our categories to execute in retail” but they’re well worth the investment. A survey of consumers showed that 62% occasionally order restaurant delivery, compared to 33% for grocery prepared foods delivery. The results were similar for restaurant takeout at 78% versus grocery deli-prepared takeout at 41%.
“There’s a bit of margin lost with the delivery services, but 46% of shoppers are wanting that option, so maximizing the e-commerce platform to give recipes, meal solutions and meal planning within the platform can be ways to increase sales,” Prach said.
She noted that sandwich sales, particularly peanut butter and jelly components, are up but could go much further with indulgent upgrades. Prach advised showing the full sandwich and meal pricing within the departments, as a way to illustrate the value and savings available to shoppers compared to their quick-serve restaurant counterparts.
“There’s also room here to upgrade sandwiches to fresh-baked bread in the deli or a small indulgence upgrade to brioche bread or to a bagel or a croissant, etc.,” she added.
Educating consumers on the use of appliances for quick and easy preparation of meals is also a way to help boost sales, she said. “People purchase many countertop appliances—the air fryers, the Instapots, the toaster oven—to create quick, tasty meals at home. Continue to educate customers on how to use these appliances,” she said.
Prach noted that the “on-the-go lifestyle” has returned with many workers returning to the office, adding that “Feeding the family has become a balancing act between money, health, taste and time.”
There’s not a single shopper that always saves money, always shops for health-forward foods or always shops for new over nostalgia. Convenience at the right time for the customer is key. A great example of this is pizza, she said. Pizza can be sold ready to eat, it can be sold ready to bake, frozen or as its individual, from-scratch components. It's a customizable product that can serve a variety of consumer need states.
“Home cooking burnout fuels this trend,” she said. “It is exhausting to keep a rotating menu at home and to cook every meal every day.”
Prach noted that most households maintain a “hybrid system” of cooking, which involves weekly meal planning, subscription plans for home cooking and buying premade meals and sides to support parts of the meal. Forty-one percent of shoppers are cooking mostly from scratch, while 50% mix homemade meals with semi- and fully prepared items, she added. “These items can be from the deli along with produce and meat,” Prach said, noting that currently, only about 9% are mostly shopping for fully prepared items.
“Shoppers want convenience as an option, and this is led by our grab-and-go. Fifty-five percent of shoppers want easier shopping in the grab-and-go, so make sure these items are stocked throughout the day and night,” she said. “Shoppers may be thinking of future meals while they’re in the store.”
Grocers can capture more spend from morning grab-and-go shoppers who may already be thinking of lunch and dinner for later while in the store. Similarly, later shoppers “want to know that their local retailer will have a reliable selection of grab-and-go along with easier preparation items that they can quickly heat and serve no matter what time.”
Prach added that quick breakfast items, especially in the bakery, have seen huge growth since 2020. “Donuts, croissants, pastries, muffins have all grown,” she said. “Some shifts from being home have built habits and taught people how to save. Having a quick piece of bakery and brewing coffee at home can save time and still feel indulgent.”