Retailer Imperatives in Meal Solutions

Behind the new amenities appearing in prepared food departments, there are several guiding principles that position retailers’ current foodservice initiatives for continued growth. Among the key characteristics that typify the next generation of prepared foods are the following:

• Tapping into Trends: As retailers work to resemble restaurants more closely, they’re paying greater attention to restaurant trends. This means that the “lifecycle” for when a popular ingredient, flavor profile or preparation technique will migrate from restaurants to retail is shrinking. Retailers are also gaining more insight into broader culinary trends. The two combined mean that prepared foods increasingly extend beyond homestyle foods and traditional favorites to include more gourmet offerings and unique ethnic foods. The degree of culinary creativity and scope of offerings that are appropriate may vary depending on the type of retailer, however. Upscale supermarkets and regional players with a heavy emphasis on prepared foods will remain at the forefront in this regard. Traditional supermarkets and other food retailers can surely learn from this group, but will adapt ideas to their customers and overall prepared food positioning. Tempered innovation or small twists that combine cutting-edge and familiar (e.g., different flavor profiles in staples like rotisserie and fried chicken) are sound approaches.
• Understanding the Consumer: Shoppers have several key priorities when purchasing prepared foods: quality, freshness, value and convenience. Quality cues include taste, but also the ingredients that are used and the overall appearance of an item. Freshness is evaluated in many ways: bright colors for produce, proper consistency for sauces, whether an item appears dried out, etc. Value is nuanced and can be expressed with competitive price points (a key competitive advantage over restaurants), but also bundling, specials and discounts, loyalty programs, and portion sizes. Convenience extends beyond eliminating meal preparation. Retailers are also making the purchase process easier by situating prepared foods near store entries, packaging items for grab-and-go and offering dedicated checkouts in the prepared food area, as well as establishing online ordering or in-store ordering kiosks.
• More Emphasis on the Experience: Grocery shopping in general has become more experiential. Shoppers can try samples, take classes, sip coffee or perhaps wine while shopping, and attend special events like live music performances or themed meals. Prepared foods provide another opportunity to elevate the in-store experience. Visible preparation adds an element of theater and boosts consumer perceptions of freshness. Well-trained, knowledgeable staff can answer customer questions, but also offer advice about product pairings and meal-planning assistance, or discuss broader food trends. Seating areas often include complimentary Wi-Fi, possibly television, and a comfortable environment to eat meals or relax over a beverage or snack, thus positioning supermarkets as a “third place” similar to some restaurants that strive to be an appealing destination for consumers beyond work and home. Select retailers (e.g., Giant Eagle’s Market District, H-E-B’s Central Market) are offering an even more novel experience by tapping into the food truck trend and taking their foodservice offerings mobile.

Jenny Anderson is a director of research and consulting services with Chicago-based food industry marketing research and management consulting firm Technomic. She is a director in its retail meal solutions practice and publisher of RMS Monitor, a tracking and intelligence program devoted to prepared foods, and has also contributed to multiple Technomic studies on retail foodservice.