FMI – The Food Industry Association has released its “The State of Fresh Foods” report, which highlights findings from the upcoming “The Food Retailing Industry Speaks 2022” analysis of the fresh foods departments.
Retailers surveyed detail investments for fresh foods departments in-store but also report an increase in the amount of sales online. Key insights from the report were shared in a keynote address by Leslie Sarasin, president and CEO, during FMI’s FreshForward event.
“The pandemic changed Americans’ grocery shopping and cooking habits, with more of us enjoying meals at home with family members,” Sarasin said.
“These broad-level changes particularly impacted fresh foods departments, and even as we shift to more in-person activities, shoppers continue to rely on their grocery stores for fresh food items. Food retailers and suppliers are responding to the heightened consumer interest in fresh food items with enhanced, affordable offerings both in-store and online.”
Rick Stein, VP of fresh foods, shared, “As we look at fresh foods departments, it’s important to see where businesses are investing and how the food industry is responding to changing consumer trends. Two important areas stand out. First, the fact that 40 percent of online sales are being generated by fresh foods departments suggests a major change from previous trends. Second, it is significant to note the emphasis that retailers are putting on foodservice and prepared foods departments.”
Online share of sales by fresh categories
Fresh food offerings are becoming more prominent players in e-commerce. Fresh or perimeter departments comprise 40 percent of all online sales, rivaling dry grocery online sales (41 percent) and surpassing frozen online sales (11 percent).
Enhanced space and staff for foodservice
Food retailers are re-envisioning fresh foods departments with enhanced space allocation and increased staff. Eighty-two percent are planning to grow the space allocation for fresh-prepared grab-and-go options, while others are increasing space for chef made-to-order stations (35 percent) or self-service (29 percent).
Retailers are also increasing staff for foodservice (44 percent of retailers planning), trained or certified chefs (22 percent), in-store dining (20 percent) and scratch bakers or pastry chefs (18 percent).
Food retailers experiment with foodservice experiences
Food retailers surveyed are getting creative with their service differentiation strategies by experimenting with new consumer touchpoints, like in-store dining (51 percent), a coffee bar (39 percent), online ordering and pickup/delivery of foodservice offerings (33 percent), catering services (30 percent), a juice bar (20 percent) and a full-service restaurant (13 percent).
However, the success of these programs has been mixed. Retailers report a success rate of as high as 60 percent for juice bars to as low as 13 percent for online ordering and pickup/delivery of foodservice offerings, revealing an opportunity for retailers to explore other specialty options.
For more information, visit fmi.org.
For more association news from The Shelby Report, click here.