Progressive Grocer

JAN 2017

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84 | Progressive Grocer | Ahead of What's Next | January 2017 Fresh Food Prepared Foods delivery services may encounter some obstacles. "More stores are starting to have meal kits similar to the ones you'd get from HelloFresh or Blue Apron, but less expensive," Lempert noted," so I see in-store meal kits continuing to rise because of that meal kit phenomenon." For their part, retailers report a growing emphasis on prepared foods. Earlier in 2016, FMI commissioned research to survey retailers represent- ing 8,000 stores, focusing on the sophistication of supermarket fresh prepared foods. While 8 percent of respondents reported total store sales growth of more than 5 percent, 69 percent reported that same level of growth or much higher in their prepared food departments. In addition, 88 percent of the store banners polled said that they have a corporate executive chef on staff. Wakefern Food Corp., the largest member- owned retail cooperative in the United States, has experienced growth in prepared foods as its members "push the envelope" with their offerings, according to Geoffrey Wexler, VP of foodservice for the Keasbey, N.J.-based company. "We know that the expectations and demands of today's customers are significantly different from those just five years ago. Our consumers are far more food-centric and food savvy," Wexler says, adding that such savviness translates to a more discerning shopper. "Today's consumers demand transparency in product origins, ingredients and production; seek out mission-based retail options; support hyperlocal products; and demand quality." Other retailers have homed in on, and responded to, changing consumer knowledge of, and prefer- ences for, prepared foods. "As food retailers continue to prove to customers that they can deliver fresh and high-quality pre- pared foods offerings that meet the needs of their busy schedules, customers' expectations of these of- ferings also evolve," says Dan Donovan, spokesman for Pittsburgh-based grocery chain Giant Eagle Inc. "As they do in other departments, such as produce when possible, many customers are interested in prepared foods offerings that are more healthful, locally or regionally sourced, and personalized." Variety Show Employing chefs on staff is one way to boost a pre- pared food department, especially at a time of strong competition with restaurants and other take-home or make-at-home meal providers. "Retailers are invest- ing a lot in this area," Stein notes. "ere are more corporate chefs and more store chefs than there have ever been." Chefs can lend authority and in- novation to prepared foods, qualities that resonate with consumers. According to the "Power of Fresh Prepared/Deli" study, although 96 percent of shoppers pur- chase deli/fresh prepared foods once a year, only 12 percent think of visit- ing the deli regularly when deciding what to do instead of cooking dinner; the report emphasizes that food retail- ers who want to stay competitive with foodservice "need to focus on elevating the profile of deli/fresh prepared as a key differentiator and thus the driver of sales for the entire store." By hiring chefs and focusing on flavor, many grocery stores have already elevated the profile of their offerings. Datasssen- tial's report, for example, revealed that a third of consumers say that the variety and quality of prepared foods have improved. To stay competitive in terms of quality and variety, Kostyo says that grocers and in-house chefs should continue to find ways to think outside the box. "Now that supermarket prepared foods are competing with nearby coffee shops, fast-casuals and other trendy restaurant concepts, not to men- tion growing delivery services, retailers really have to start broadening their view and looking at what's happening across the industry to understand what customers want," he advises. Anne-Marie Roerink, principal at San Antonio- based 210 Analytics, which conducted research for the "Power of Fresh Prepared/Deli" study, agrees that grocers and grocery chefs should keep that question in mind — What do consumers want? — as they develop their prepared food offerings. Roerink suggests that stores first meet baseline expectations on fresh prepared staples like rotisserie chicken, sandwiches and pizzas, and then work on other, up-and-coming items. "Once the basics are perfected, stores can expand to become a true deli destination that is a viable restaurant alternative in the eyes of the shopper. is includes a much wider variety of items of on-trend foods to elevate the consumer perception," she says, noting that grocery stores are well positioned to deliver on innovation. "Grocery stores that have been able to build a reputa- tion and destination by innovating and staying above the trend with flavors, ingredients and customizable options have given restaurants a run for their money." "You're starting to see supermarkets with a sta- tion for pizza, a station for salad, and a station for sushi or Mexican food," Stein concurs. "ey can switch those over time, like maybe switching sushi to Mediterranean sandwiches, if those become Today's consumers demand transparency in product origins, ingredients and production; seek out mission- based retail options; support hyperlocal products; and demand quality." —Geoffrey Wexler, Wakefern Food Corp.

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