Prepared foods are the future of grocery — foodservice is the top strategic initiative for many retailers, and many analysts are saying those not already playing in this arena are sitting out at their own peril.
Grocery prepared foods accounted for $25 billion in sales in 2014, up $10 billion since 2004, according to data presented by Wade Hanson, principal with Chicago-based Technomic Inc., at the recent Annual Meat Conference, in Nashville, Tenn.
Of course, it’s not enough just to attract business — you also have to keep it, and a huge part of that is delivering delicious, satisfying and fresh selections. Packaging plays a crucial role in the appeal of supermarket prepared foods.
That means packaging that’s more sustainable, and that can maximize visibility of the food inside, says Lewis Shaye, VP of culinary concepts at Schenectady, N.Y.-based grocery chain Price Chopper. “People want to see clearly what they are getting and know that it is not cluttering up the waste stream, whenever possible,” he says. “We are conscious of not overpackaging food.”
Demand for those attributes is supported by findings in the latest trends report released in late 2014 by the Falls Church, Va.-based Foodservice Packaging Institute (FPI). Current trends focus on both the environmental attributes and the look of containers, FPI reports.
Survey participants expressed a “demand for products that can be recycled and/or composted, with perhaps a greater interest this year in compostable products, which could be the result of a growing number of food waste diversion initiatives throughout the foodservice industry,” FPI notes on its website. “Respondents also pointed to the use of unique colors, shapes and sizes that help to incorporate branding in a package. Interestingly, clear (transparent) packaging was also mentioned, which focuses the visual cues on the foods and beverages, instead of the container.”
Freshness and Function
Beyond that, preservation of food quality is key.
“Our guests want restaurant replacement food, not home meal replacement,” Shaye says. “They expect our products to be made fresh, customizable to their particular liking and want us to have consistency in our food offers. They want food packaged properly — they want hot foods kept hot and cold foods kept cold, and now, more than ever, want packaging that works for dashboard dining. More and more, carry-out occasions involve portability, so just like in a typical fast-casual restaurant, our guests want to be able to eat on the go.”
The supplier community is taking note as well. “Much of the growth opportunity we’re seeing right now pertains to freshness and food safety,” says Sean Brady, marketing director for ready meals at Elmwood Park, N.J.-based Sealed Air Corp.’s North America Food Care Division. “As supermarkets try to compete with restaurants for those quick take-home meal options, consumers are expecting the same freshness and food safety that they’d experience at a restaurant. To help meet that demand, retailers are offering more full-entrée options on the ready meal side.”
Indeed, food quality and freshness are the most critical drivers for prepared foods, followed by convenience, asserts Keri Olson, marketing director at Lenexa, Kan.-based Robbie Fantastic Flexibles. Olson points to Mintel research showing that consumers place the highest importance on food packaging’s ability to retain freshness.
“As a packaging supplier, we continue to listen to consumers and retailers to meet their needs,” she says. “We created the Hot N Handy pouch for rotisserie chicken after conducting in-store intercepts with shoppers at multiple large chains. According to the study, the chicken stayed fresher and moister in a pouch versus rigid packaging. This research has led us to further listen to create additional packaging to hold crispy items as well.”
Partnering with retailers also is par for the course at Anchor Packaging, which has developed containers as a result of problems reported at retail. “Understanding how food is prepared and handled, how it will be packaged and displayed, and if the consumer is expected to eat as-is or be able to reheat the food all play a role in how a package is designed,” explains Marilyn Stapleton, marketing director at the St. Louis-based company, noting one example: “Fried chicken becomes soggy when packaged, even when numerous vent holes are included in the package. Store tests helped to develop our patented cross-flow ventilation system that keeps fried foods crispy.”
Partnering on Innovation
Retailers like Price Chopper are constantly reviewing their foodservice packaging for functionality as well as visual appeal.
“Big opportunities lie in maintaining product freshness and shelf life without looking too manufactured,” Shaye says. “Since we both prepare on-site and selectively use manufacturers for our menus, we try and get our food to the guests as soon as it has been made, and we want it to perform well for its shelf life, whether it is being consumed on the spot or three days later. Convenience in cooking or reheating is also very important, so microwaving or easy oven-prep bags or containers are being reviewed and considered as good options.”
Companies like Sealed Air aim to help grocers deliver. “Consumers have told grocery retailers they wanted the variety and flexibility to bring home more than one prepared meal to satisfy their family members’ varied tastes,” Brady says. “At the same time, they want the flexibility to serve that meal [on the] same day or to wait several days to serve it. Consumers want to be served on their own timelines.”
Sealed Air’s Cryovac Simple Steps packaging offers consumers the flavor and freshness of a chef-prepared meal, served on a white plate with vacuum-skin packaging — a ready-to-serve product that can be finished and served in store or at home. “The steam-assisted technology allows consumers to heat the food more evenly, creating the ideal eating experience,” Brady explains. “It’s a higher-quality product, thanks to the packaging, than consumers’ previous choices. Additionally, this package format can help boost food safety that the consumer demands by reducing the risk of cross-contamination from serving or handling.”
For its part, Robbie is “focusing on providing packaging that helps keep the prepared foods tasting just as fresh from the time the consumer purchases the [product] until they get home to sit down at the table,” Olson notes. “Savvy retailers have already figured out that the package is an ambassador for their brand and will ultimately help a consumer decide if they are going to return to that supermarket for their next meal to go.”
Elk Grove Village, Ill.-based Clear Lam Packaging Inc. has successfully worked with retailers to develop rigid and flexible packaging solutions such as fresh fruit and vegetable containers, platters sealed with peelable lidding film, and salad and fruit trays sealed with the company’s Peel and ReSeal lidding system technology.
“The opportunity is to develop intuitive packaging solutions for a variety of meal options,” says Jim Foster, Clear Lam’s senior marketing manager. “The challenge is creating packaging that conveys ‘fresh’ while delivering the protection and ease of use consumers need across multiple consumer segments.”
Innovation also extends to seemingly small details like packages that stay shut but are easy to reopen. An innovative adhesive, developed by Columbus, Ohio-based Battelle in cooperation with Deerfield, Ill.-based Mondelēz International, combines high self-adhesion with low tack for a product that’s easy to use, easy to apply, consistent and only sticks to itself.
Low-tack adhesive will be applicable to prepared foods that come in flexible, reclosable packaging after it gets FDA approval, expected early this year, according to Battelle spokeswoman Katie Pearson.
Unlike traditional pressure-sensitive adhesives, low-tack adhesive isn’t messy, sticky or expensive. “For example, it won’t pick up crumbs from crackers or cookies, which makes traditional adhesives ineffective,” says Cindy Conner, a Battelle senior market manager. “All consumers need to do is press it together to create an effective and consistent seal that stands the test of repeated cycles of opening and reclosing.”
Expanding the Market
What’s needed to take prepared food packaging to the next level?
“Consumers want transparency and visibility of what’s in their food, and they are bringing that same expectation to prepared foods,” says Joe Ramirez, marketing director for fluids at Sealed Air. “The consumer perception is that prepared foods are not fresh because they are served in a package or are not prepared on-site. To move this segment to the next level, retailers need to address this challenge, potentially through consumer education, and demonstrate that prepared foods can be as fresh, if not fresher, than other options.”
Meanwhile, the folks at Sealed Air see room for growth in the areas of food safety and shrink loss. “Those challenges present the greatest opportunity for retailers,” Brady says. “By educating the consumer on what they’re really buying and the freshness of the food in their prepared meals, retailers can continue expanding this product line.”
Clear Lam’s Foster says retailers will likely need a variety of meal solutions and corresponding delivery methods that appeal to multiple demographic segments with disparate levels of cooking knowledge. “Retailers also need packaging solutions that will position the products as fresh, while still offering food protection and ease-of-use functionality,” he says.
Consumer trends toward smaller portions, less time for food preparation at home, increases in snacking, and nontraditional eating times have all created a demand for new package sizes to handle an increase of food varieties, Anchor’s Stapleton asserts.
“Retailers are fighting for market share with convenience stores and fast-food chains, so custom orders will help drive traffic to the store,” she says. “Packages that allow the food to look fresh and appealing on display or made to order, with features that include leak resistance and reusability, will help to differentiate the retailer from other segments.”
Also something to consider: new regulations aimed at reducing waste. “Local legislation banning Styrofoam and polystyrene-based packages is causing retailers to explore other options,” Stapleton cautions. “Although foam packages are not being used to a large degree in the deli, there are many OPS [oriented polystyrene] lids and hinged packages on grab-and-go displays. It’s time for the retailers to get ahead of these pending changes so they can transition on their time frame to curbside recyclable products made with polypropylene or PETE [polyethylene terephthalate]. Packages made with these materials not only offer improved performance for heat tolerance and merchandising, they also provide the retailer with a positive environmental platform.”
While it’s no secret that prepared foods will continue to be an integral part of supermarket operations, it’s also clear that the right kind of packaging is essential for grocery foodservice.
“Supermarkets need to find ways to cater to, and expand on, the market,” Robbie’s Olson says. “Prepared foods are just not for dinner anymore. Convenience stores have already set the stage for fast pickup of breakfast and lunch foods, but they haven’t captured the desire for more-healthful options. Supermarkets have all the tools in the perimeter now; they just need to make it easily ready for the consumer to get in, chose their meal and exit. Consumers are already familiar with the perimeter of the store, but just don’t have the time to put their meals together. Retailers that set up a drink bar, sandwich, salad and fruit center will capture consumers very quickly.”
“People want to see clearly what they are getting and know that it is not cluttering up the waste stream, whenever possible.”
—Lewis Shaye, Price Chopper
“Consumers have told grocery retailers they wanted the variety and flexibility to bring home more than one prepared meal to satisfy their family members’ varied tastes.”
—Sean Brady, Sealed Air Corp.
“Packages that allow the food to look fresh and appealing on display or made to order, with features that include leak resistance and reusability, will help to differentiate the retailer from other segments.”
—Marilyn Stapleton, Anchor Packaging