Showtime!

In a PG exclusive, research and insights from The NPD Group shed new light on the key consumer drivers of lunch and dinner consumption of deli-related foods.

Editor's Note: Progressive Grocer and The NPD Group have teamed up to present an exclusive three-part Deli Shopper Insight Series to elevate knowledge and awareness of the critical issues and corresponding opportunities unfolding in the deli and prepared foods department. The first installment of the series on the following pages provides an eagle-eye look at the behind-the-scenes meal-planning decision-making process the average consumer experiences prior to entering the store. The exclusive Deli Shopper Insight Series will continue in future issues, with Part II evaluating how consumers shop the dell, and Part III analyzing the connection between what happens at home and In-store, and how retailers can better deliver on consumer expectations.

It's 5 p.m. — time to decide what to have for dinner. In the majority of households, dinnertime takes place between 6 p.m. and 6:30 p.m., and in most cases, homemakers are deciding within a few hours of the meal what they'll serve. Among the most frequent options before them: Dinner can be assembled from items on hand at home, purchased from a foodservice establishment for either on-premise or takeout consumption, or prepared from ingredients picked up during a quick trip to the store.

But how do you get inside the minds of these homemakers to help seamlessly facilitate this regular ritual?

“A key to maintaining customer loyalty to a retailer's brand is to connect with them by anticipating their needs,” says Joseph Derochowski, executive director for the Chicago-based NPD Group. “Understanding how consumers use a product in the home — how they plan before going grocery shopping, how they shop once they're at the store — are all the ways in which retailers can gain a better understanding of their customers' needs and connect with them at the points of decision-making.”

And nowhere is this scenario more important than in the deli, where the bulk of the inventory is primarily used for lunch and/or dinner occasions. Indeed, as revealed by NPD's DeliTrack research, more than one-third of all adults (37 percent) make a purchase from the retail deli (inclusive of supermarkets, supercenters, club stores, c-stores and standalone delicatessens) every week — good for more than 87 million adults shopping the deli weekly and choosing from cheese, lunchmeat and prepared food items (including soup/food/salad bars). Deli-area foods are primarily used in the home for lunch and dinner occasions.

According to NPD's DeliTrack, the most common deli purchase drivers include habit, having a specific occasion or use in mind, easy meal needs, satisfying a craving for a particular food, and the right price at the time. For prepared foods, an additional top purchase motivator is avoidance of meal preparation, cooking and/ or cleanup, or all three. This in turn, according to Derochowski, begs the question: “Can deli associates work to differentiate shoppers with a mission in mind vs. those who are shopping at 5 p.m. with perhaps a desperate look in their eyes as they browse the prepared food offerings?”

Let's find out.

The store's deli area provides convenient, fresh options and is an important way retailers can not only meet the meal solutions needs of shoppers, but also solidify loyalty and repeat business.To successfully meet these needs, retailers need insight into the consumer's mind and the day-to-day needs tied to creating meals, which comes from understanding what happens before shoppers enter the store, as well as the needs and behaviors that take place in the home.

As revealed in NPD's recent report, “Before the Store,”many purchase decisions are made in the home. Most primary shoppers say they make a shopping list and that many household members contribute to this list.The specificity of the list varies from home to home — one list, for example, may show “milk, eggs, lunchmeat and something for dinner tonight,” while other lists may include specific brands to pick up. Once shoppers enter the store with either a written or mental list — or perhaps even a simple need in mind — retailers and in-store marketers have an opportunity to connect with shoppers on the needs behind the shopping trip.

The common use of shopping lists is additional evidence that consumers have specific needs in mind when they enter the store, and that most often, those needs are driven by in-home behaviors. While list use, shopping habits and meal preferences vary by life stage, the main focus of this article is on the marketplace in general.

When shoppers make deli-area purchases, NPD's DeliTrack finds that more than 60 percent of the time, their purchase intentions are identified before entering a store. For prepared foods, however, nearly half of all purchase decisions are made in-store, indicating that these foods are more impulse-driven vs. deli meat and cheese purchases.

Whether the decision about which specific items in the shopping basket is made in the store or before they get there, all consumers have specific needs they're seeking to satisfy, along with particular occasions they're shopping for, such as an easy meal, a nightly dinner, lunches to pack for work and/or school, replenishment food for the home, and more.

NPD's “Before the Store” report also explored challenges faced by primary grocery shoppers, including those encountered when planning and shopping for meals and snacks. Twenty-six percent of respondents said that staying within their household budgets is the foremost challenge, followed closely in second place by discovering new ideas for main meals (22 percent). One respondent to NPD's study, a 35-year-old female, summed it up well:“I think it would be helpful if the store circular could include recipes and/or meal ideas based on each week's sales items.”

“Consumers are always motivated by saving money and time,” says Derochowski. “Deli personnel need to always be thinking of ways to accomplish both for their customers.”

The needs that drive purchases manifest themselves every day and throughout the day as consumers decide what to eat. According to NPD's “MealScape” studies, the largest need state for both lunch and dinner is driven by convenience, which the research organization refers to as “Beat the Clock” and “Last Minute No-Brainers,” respectively. To be sure, it's in these convenience-driven situations that deli items can play an important role.

Thinking about the alignment between the needs that drive the food choices during these situations and the motivations behind the actual deli purchases (i.e., the need for speed or an easy meal, or to have something readily on hand for quick meals), we will first explore lunch and dinner to reveal the essential characteristics of these situations, findings of which will in turn arm retailers with the critical information they need to better position and merchandise their deli offerings to make connections with consumers as they shop for these occasions.

For just over half of all lunchtime occasions, consumers are obtaining and eating this meal in the home, while just under half are obtaining and eating it away from home. Although two-thirds of lunch consumers, adults and kids, decide what to eat within 30 minutes of the meal, more than half of all primary shoppers said they plan ahead for midday meals. Retail marketing programs need to link with traditional marketing, with a first objective of getting on the shopping list and coordinating with in-store marketing to influence the final purchase decisions in the store.

Retailers may“own”the in-home lunch occasion, but they compete with foodservice operators for away-from-home occasions. Deli sandwiches, or other prepared foods such as salads, can be used to compete for away-from-home lunch meals, especially if retailers can offer consumers interested in a quick meal an easy way to get in and out quickly.

Whether in the home or away from it, convenience is a primary concern when consumers are deciding what to eat for lunch. For occasions where convenience is a primary driver of food choices, NPD's“Lunchtime MealScape”study has identified this need state as “Beat the Clock,”which is the largest at lunchtime and accounts for 40 percent of all lunchtime occasions. There's a great deal of opportunity for retailers and the deli department when it comes to offering convenience. While sandwiches are the top lunchtime food overall, this food has an even greater importance in Beat the Clock situations.

The top needs or benefits sought in convenience-driven “Beat the Clock” lunch situations are choosing foods that are:

• Easy to prepare or purchase

• Made or obtained quickly

• Easy to clean up

• Quickly eaten

• Affordable

“Retailers who can help consumers address meal-planning challenges before and while they are at the store have the potential to become ingrained in the family meal-planning and shopping cycle.” —Joseph Derochowski, The NPD Group

Sandwiches can deliver on all the above benefits. Similar to lunchtime overall, just under half of all Beat the Clock meals are obtained and consumed away from home. Nearly 70 percent of the time, consumers are deciding what to eat within 30 minutes of eating:They can choose from something on hand, they can opt to get the meal from a restaurant or other foodservice establishment, or they can go to the store to pick up items for a meal.

“Consumers are looking for cost, variety and convenience when looking for meal solutions, and there are options available to them to fill those needs, including eating out at a restaurant,” says Derochowski. “For grocery stores to be the chosen option means understanding these drivers and being a quick and easy source for prepared foods.̶

NPD's “National Eating Trends” study shows that in the home, where deli lunchmeat and cheese are primarily used, 76 percent of lunchmeat and cheese sandwiches made at home are consumed at the lunch occasion, either consumed in the home (59 percent) or carried from home (17 percent). The most popular types for lunchtime occasions are ham (34 percent), turkey (23 percent) and cheese/grilled cheese (17 percent).

Just over half of all homemade lunchmeat sandwiches contain cheese, which presents a co-marketing opportunity to promote deli cheese with each purchase of deli lunchmeat. These lunchtime sandwiches are most often consumed with chips, fruit, soup, vegetables and cookies — consumers are shopping multiple areas of the store for these occasions. Can this be made easier with a special display of popular sandwich accompaniments in the deli area one day a week?

“The deli is a critical area for customers looking for solutions, and it's an important area for retailers because it helps to increase basket size,” notes Derochowski. “Consumers discover solutions, like a ready-to-eat sandwich, in the deli, and then they shop in other areas of the store to pick up the other items needed.”

Dinnertime meals skew more heavily to the home compared with lunch: Nearly nine of 10 such meals are consumed in the home. For just over half of all dinnertime meals, consumers are deciding what to eat within an hour of eating. However, more than two-thirds of primary grocery shoppers said they plan for dinners more than a day in advance. As with lunch, shoppers create an inventory at home that can be “shopped” when mealtime rolls around. Like lunchtime, the largest dinnertime need state is convenience-driven, and NPD's “Dinnertime MealScape” study identifies this need state as “Last Minute No-Brainers.”

These convenience-driven situations represent just over one in five dinnertime meals, showing that convenience at dinnertime is a big consideration but not as dominant as at lunchtime. For the evening meal, there are more diverse needs, such as nurturing the family, budget considerations and using up leftovers, as well as health, shift eating and others. For Last Minute No-Brainers, when the need for convenience is important, sandwiches are one of the top options served, with a 16 percent share of these occasions. The top main-dish foods for convenience-driven occasions are center-of-the-plate meat or poultry entrees such as steak or chicken breast, sandwiches, pizza, casseroles and other types of one-dish meals, and Italian dishes such as spaghetti or lasagna.

“The frequency of meal planning is an indication that many purchase decisions are made prior to grocery shopping,” observes Derochowski. “Retailers who can help consumers address meal-planning challenges before and while they are at the store have the potential to become ingrained in the family meal-planning and shopping cycle.”

In addition to sandwiches, deli prepared foods can be leveraged to meet the needs represented by Last Minute No-Brainers. The top needs or benefits sought at these convenience-driven situations are choosing foods that:

• Take little/no planning or thought

• Fill up/satisfy hunger

• Are easy to prepare or get

• Could be made or gotten quickly

• Could be prepared at the last minute

NPD's DeliTrack service shows that the motivations expressed by deli shoppers when they purchase prepared foods align closely with the needs associated with Last Minute No-Brainers. The top prepared food purchase motivators include:

• Purchased regularly for an easy meal

• Had a craving for it

• Purchased for immediate consumption

• Appeared to taste good

• Didn't want to cook

“Everyday retailers need to be asking themselves how they help consumers plan for, prepare, eat, clean up and shop for their meals in their store,” says Derochowski, noting that “connecting with customers at these moments is what will create brand loyalty.”

Retailers should make the connection for shoppers between the need for a quick/convenient dinner meal and stores'deli department offerings. By speaking directly to consumer needs, retailers will have greater success in having shoppers turn to the deli for lunch and dinner meal solutions.

Opportunities for Retailers

Coordinate in-store programs with traditional marketing to:

• Get deli items on the shopping list

• Help shoppers create a home inventory of meal solutions

• Provide in-store shopping lists and complete meal ideas

• Make the connection for shoppers between the need for quick/easy meals and offerings in the deli department

• Identify and help those consumers in the store shopping for a last-minute meal by providing ideas for complete meals

• Consider sponsoring different meals once a week (e.g. Spaghetti Night, Soup and Sandwich Night, Friday Night is Pizza Night)

• Compete with restaurants for away-from-home lunchtime meals

• Provide a menu of lunchtime options, with all meal components close at hand

• Ease the way for those who need to get in and out of the store quickly with a meal they intend to eat right away (e.g., retail version of the “drive-thru lane”)

“The best approach is for retailers to think about their stores from a consumer's perspective,” says Derochowski. “It's not about prepared foods; it's about offering solutions for lunch, the meal most likely to be consumed from home, or dinner, a meal that is driven by convenience.”