International fare and regionally produced ingredients are the hottest trends in deli department foods, according to “What’s in Store 2012,” the recently released annual trends publication of the International Dairy-Deli-Bakery Association (IDDBA). Eighty-two percent of consumers enjoy visiting supermarket delis that feature newer and trendier items, regardless of whether they regularly purchase these items.
Delis need to cultivate an image of being “in the know” so that customers are more receptive to new products, trends and menu ideas. Fresh, local, and organic salads and side dishes are rising in popularity in line with restaurant trends.
Following behind hot dogs and pizza, sandwiches are the next most popular fresh food choice for c-store customers. Of consumers who purchase food from c-stores, 28% opt for made-to-order sandwiches, according to a recent study by Mintel International, a market research firm. The firm estimated foodservice sales in c-stores reached $22.8 billion, a 4.1% growth in 2011.
Deli programs can generate higher gross margins than the average c-store profit line, said John Matthews, president of Gray Cat Enterprises, a consulting firm for the convenience and restaurant retail industries. Profitability is the goal with a deli or any other foodservice program, but too many c-stores fall short in the execution.
“The execution of the program to ensure food safety, freshness and quality; managing food and paper costs; and providing good customer service will test the mettle of any operator. It is a completely different ballgame than simply pricing Snickers on the shelf,” said Matthews, who has extensive foodservice experience as the former vice president of marketing for the Clark convenience store chain in Chicago and a past president of Jimmy John’s Subs.
Ethnic entrees, such as chorizo and carne asada, as well as Korean short ribs, Polish kielbasa, carnitas and Serrano ham, are interesting to customers looking for new meal solutions.
Ready-to-eat foods are always popular at the deli. For instance, deli pizzas are trending toward smaller portions and artisan pizzas with regional and ethnic flavors and local produce for toppings. Whole grain crusts, as well as all natural, organic, and vegetarian options are catering to the newly sophisticated American palette.
IDDBA research shows, top trendy ethnic items attracting shoppers in deli sandwich programs/prepared food areas are: crepes (27.6%), chipotle flavors (24%), hummus (23.4%), Korean BBQ (22.7%) and empanadas (21.6%). Others mentioned were Vietnamese banh mi sandwiches (10.5%) and stuffed cornmeal cakes known as pupusas (10%).
C-stores may fulfill the latest deli trends, but convenient service and merchandising tactics complete the package.
“Long lines and shoddy service—no matter how good the food is—will be a huge deterrent for repeat business,” Matthews said.
Deli operators need to implement time-saving throughput strategies to eliminate wait times.
Deli Trips and Dollar Share
According to Perishables Group, deli-shopping households only make an average of 15 trips per year to the deli department at their local supermarket. Deli prepared foods captured 85.9% of households buying at least once a year, the highest penetration for a deli category.
Consumers are buying more prepared meals at convenience stores, supermarkets and mass merchandisers that are now emphasizing convenience, quality and variety to shoppers. Retailers are responding by making more space for these offerings.