How Grocers Can Leverage the $13B Foodservice Opportunity

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How Grocers Can Leverage the $13B Foodservice Opportunity

By Gina Acosta - 09/04/2019
How Grocers Can Leverage the $13B Foodservice Opportunity
Foodservice is a large focus at the Wegmans Food Market in Medford, Mass.

A new report from the Food Marketing Institute (FMI) looks at the challenges and opportunities for grocers when it comes the $13 billion category of foodservice.

According to FMI’s fourth annual Power of Foodservice at Retail report, foodservice is growing annually at 8.2% and can be a primary strategy for food retailers to differentiate and appeal to convenience-seeking consumers.

The report also finds that 63% of consumers continue to incorporate time-saving solutions in the form of semi- and fully-prepared items for dinner, but opportunities exist for grocers to garner greater visibility as the primary dinner solution. Survey participants offered feedback for their stores to focus on faster service; more cuisine variety; healthier dishes as well as healthier alternatives to current options; competitive prices; more information; freshness; knowledgeable and available staff; and various operational improvements such as cleanliness and in-stock performance.

More Information

The FMI 2019 Power of Foodservice at Retail analysis will be presented at the Total Meal Solutions Summit on Tuesday, Sept. 10, an event hosted by Progressive Grocer.

FMI Vice President of Fresh Foods Rick Stein noted that consumers continue to look for convenient ways to get all – or part – of their meals away from home, and supermarkets play a pivotal role in this decision making.

“The study notes that grocers with a positive reputation in retail foodservice can serve as strong motivation for 64% of shoppers who say they will actually go out of their way to find these stores," Stein said. “Competitive differentiation strategies abound for our grocery members who place an emphasis on variety and reduce obstacles through fast and convenient shopping experiences. These experiences may also be enabled by technology, as we’re witness to similar motivations in the restaurant industry.”

Here's some of the other top takeaways from the report:

Need for Variety

  • Eighty-eight percent of shoppers want to see more new items and flavors in retail foodservice. In fact, the most frequently mentioned word in the open-ended suggestions of the survey was “more” in combination with words such as variety, food, options and items
  • The highest share, at 31%, want to see flavor and item rotation on a monthly basis, but 28% want even greater levels of innovation and recommend a weekly or even daily rotation

Need for Speed

  • The importance of speed is once more underscored by the grab-and-go, ready-to-eat format being the most popular method, which is of interest to 68% of shoppers
  • Grab-and-go, heat-and-eat is the second most popular style, at 63%

Need for Technology

  • While 57% of shoppers have grocery store apps downloaded, 42% actively use one or more
  • App usage is highly related to checking weekly specials (78%), online ordering of groceries (53%), getting recipes and meal ideas and researching the deli-prepared foods menu, but foodservice orders lag (38%)

The FMI 2019 Power of Foodservice at Retail analysis will be presented at the Total Meal Solutions Summit on Tuesday, Sept. 10, an event hosted by Progressive Grocer.