Home » Building A Reputation For Fresh Prepared Food In Grocery
Bonus Content Deli/Prepared Foods [email protected] Guest Contributors Home Page Latest News National Operations Shelby Signature Content

Building A Reputation For Fresh Prepared Food In Grocery

Rick Stein
Rick Stein

by Rick Stein/VP of Fresh Foods, Food Marketing Institute
Exclusively for The Shelby Report

When I met celebrity chef and Food Network star Mario Batali in Chicago this year at FMI Connect, I was starstruck. And it wasn’t his orange Crocs; in my mind, he’s the ultimate entertainer and he’s approachable when it comes to his explanations of recipes, ingredients and cooking techniques. He’s also uniquely invested in food retail, as evidenced by his share in Eataly, which is where lovers of Italian food go to worship. When I toured, and subsequently shopped and ate at Eataly, I recognized it as the pinnacle of where food retail and foodservice meet to deliver convenience and a sense of theater. As curators of goods, food retailers still have much to learn when it comes to their fresh prepared food offerings.

The deli is a $24 billion category with unprecedented growth opportunities. Fresh prepared is the largest subcategory at $13 billion, with 4 percent growth over the past year. As some of the most sophisticated deli/fresh prepared supermarkets are witnessing double-digit growth, the FMI Fresh Foods Council recognized an opportunity with me last year to document the fresh prepared category through the eyes of the shopper, similar to FMI’s sister reports on meat and produce. It was decided early on that this exploration was more than just cheese and cured meats—this was about mirroring the store experience with the sophistication of the shoppers’ demands and creating an environment that offers convenience as well as inspiration.

Based on a robust shopper study overlaid by actual sales data provided by Nielsen Perishables and financial support from Hussmann Corp. and The Shelby Report, the new “Power of Fresh Prepared/Deli” report attempts to better understand the role of supermarket fresh prepared meal solutions in the American meal lineup with insights detailing the entire path to purchase. We focused on fresh prepared food’s role in weekly meal planning; channel choice of general grocery shopping vs. fresh prepared; the importance of variety, quality, price, speed and other factors in the purchasing decision tree, particularly vs. eating out-of-home in restaurants or in-home through delivery, takeout or meal kit delivery services; consumption location and frequency; and areas of improvements as suggested by shoppers.

It’s clear that food retailers are differentiating their businesses by leveraging fresh food selections to meet shopper demands for convenience, all while counterbalancing declining center store sales. The battle for consumers’ eating-away-from-home dollars is being fought among restaurants, supermarkets and even convenience stores. Our collective efforts to shine a light on the fresh prepared food section offers will help retailers try to gain share of the consumer’s stomach.

Build it and they will come…

I think we’ve all heard a voice whisper, “If you build it, they will come,” at some point during our professional careers. And when it comes to the fresh prepared foods area of the store, many of you are already constructing a culinary field of dreams. I certainly experienced it the first time I walked into the wine bar at Eataly in Chicago. According to FMI’sU.S. Retailing Industry Speaks” analysis, nearly all food retailers emphasize fresh in their competitive strategies to differentiate from the competition, and they are making further investments in both fresh and prepared foods that have outgrown the total store for years. To date, shoppers’ focus on speed means that for many retailers, fresh prepared is not leading to significant sales in other areas of the store. Yet, the Power of Fresh Prepared/Deli research shows that ambiance, atmosphere and experiential factors can be an important differentiator for shoppers when connecting to their meals away from home. This is a clear signal for retailers to think about building the environment in their store that will deliver on this expectation.

Our fresh prepared research suggests that when shoppers decide last minute not to cook dinner, mood along with speed are the top considerations for determining what to do instead. During the weekend, dining out is more often a planned activity, in which case mood, variety and ambiance rise in importance. Combined with the fact that Millennials currently under-index in deli visits but have a higher propensity for eating out, the research indicates this generation is a high potential target for fresh prepared offerings.


Shoppers are mostly aspirational when it comes to cooking. They may watch their favorite culinary travel show or read blogs, but we found that consumers are mixing Fresh Prepared meals with ingredients at home and creating their own ultimate “hybrid” meals. The research shows that more and more consumers are only buying a portion of the meal already prepared and taking it home and combining it with “from scratch” ingredients from their kitchen, similar to the strategy of Food Network star Sandra Lee. This serves retailers valuable insight as they begin to think of connecting the consumer who buys the whole rotisserie chicken with other areas of the store, building recipe solutions for the Sandra Lee-minded enthusiast.

Where we see food retailers excel is when they align these meal and recipe solutions with ambiance, atmosphere and experiential factors. Most notable, regardless of age, income, region or area, a majority of all shopper groups have taken to combining items they cook from scratch with value-added items that are semi- or fully prepared.

In terms of fresh prepared/deli, 72 percent of shoppers define “fresh” by when the meals were prepared. And speaking of experience, younger generations desire adventurous meals, specifically more ethnic cuisines—and variety and rotating options within them. Food retailers need to consider Korean bulgogi, not just southern BBQ, in markets catering to Millennials to provide a twist on a proven favorite.

Battleground: lunch

One hurdle to growing fresh prepared sales lies in the fact that shoppers who eat out more frequently have a lower-than-average trip frequency and are less inclined than the average shopper to purchase fresh prepared vs. restaurant food. This is where the lunchtime opportunity fits in. Fresh prepared is largely driven by easy and frequent access to the store; urban shoppers are twice as likely to regularly stop at grocery stores for prepared lunch solutions. Moreover, younger Millennials, aged 18 to 26, are the most likely to weave in various value-added solutions.

The lunch trends are no different than the scramble consumers make around 4 p.m. any given weekday, so grocers still need to build a reputation in lunch offerings with an emphasis on speed, price, variety and healthy options. This is particularly notable in areas where proximity drives frequent and easy access to the store, with urban shoppers twice as likely to regularly visit grocery stores for deli/fresh-prepared lunch solutions.

Word-of-mouth/taste reputation

With some noted exceptions, reputation is precisely where many grocery stores struggle. The predominant way in which shoppers learn about a grocery store’s prepared foods program today is by seeing or trying it for themselves when in store (52 percent). This is the highest across all age groups. The second highest also requires in-store presence through signage.

Therefore, in order to build a reputation among consumers outside of the store, it is clear that digital media is key to success among younger shoppers and circulars among older generations. Retailers have to build a name for themselves, much like new restaurants, to become top-of-mind when shoppers are deciding what to do instead of what to cook. Millennials are much more inclined to accept recommendations from friends and family and take to social media, apps, email or texts and food/restaurant rating websites to learn about the deli/fresh prepared program. Age-wise, Millennials are the least store loyal when buying fresh-prepared, while they are the most likely to integrate meal solutions into their meal planning. Finding ways to connect with Millennial shoppers to drive conversion will be an important step.

Building a reputation in fresh prepared outside the store involves a commitment of time and effort and many communication vehicles. Additionally, message platforms will vary by store audience and demographics. This is where working with your communications and marketing teams becomes essential.

A foodie trend worth following

With many options for meals and convenience taking on an ever-growing role, the supermarket industry will continue to identify improved ways to track consumer dynamics, convenience and household trends that have had a profound impact on meal preparation and shopping behaviors regarding fresh prepared foods. I’m enthusiastic to report that FMI will explore this topic on an annual basis to ensure we’re understanding consumer buying behaviors for fresh prepared food choices to better identify what choices consumers are making and how they are determining where and what they will eat.

FMI and 210 Analytics produced the Power of Fresh Prepared/Deli, which combines quantitative data with Nielsen data on actual sales. The combination of the Nielsen data and fresh information from consumers on their decision process will offer research that the industry is (excuse the pun) “hungry” for. For more information and to download a copy of the report, visit fmi.org/FreshFoods.

Editor’s note: A press release regarding this new report will be issued Wednesday, Nov. 30.

Rick Stein joined FMI in 2014 and is responsible for developing a portfolio of services and activities to assist members in formulating and executing their fresh food strategies. These categories include everything from dairy, frozen, meat, poultry, seafood and produce to service departments—deli, bakery and fresh prepared meals and related solutions for take-out or in-store dining.

Prior to joining FMI, Stein spent 35-plus years in a wide range of retail grocery merchandising and marketing responsibilities. Before joining FMI, he was VP of retail marketing & merchandising execution for Safeway Stores Inc. During his tenure at Safeway, he held both divisional and corporate responsibilities in retail/store operations, category management, sales, marketing/merchandising and strategy development. He has experience in virtually every facet of the retail food business and helped lead Safeway to achieve operational excellence and increased market share and revenues.

Stein graduated from the University of Maryland with a bachelor of arts degree in behavioral and social sciences. He has earned continuing educations credits in marketing, merchandising and management, most recently with the Disney Institute. He serves on numerous nonprofit boards such as the MDA, Children’s Cancer Foundation and Easter Seals of DC/VA/MD.

Rick and his wife, Rosemary, reside in Rockville, Maryland. They have four children and two grandchildren.

Fresh Intelligent Forecasting: The Superpower Against Labor Shortages?

Can automation and digitization of fresh operations help retain frontline workers, maximize scarce labor hours and minimize labor expenses, errors, and disruptions? Invafresh discusses the role fresh food retail technology plays in achieving this goal.

Learn More

3 Methods For Reducing Grocery Store Shrink

Grocery store shrink has been at an all-time high, costing the retail industry around $61.7 billion in sales. It’s a problem that can be mitigated. Storewise explains how.

Learn More

Featured Photos

Featured Photo Illuminator Torch Awards, April 5
Anaheim Hilton
Anaheim, California
Share via
Copy link
Powered by Social Snap