What's Going on in the Deli Department?
Deli departments are showing some of the biggest gains in supermarkets, and retailers are expanding their selections to maximize sales in this key category.
Bold new flavors and limited-edition products are two key drivers in this expanding area. “We are seeing spicy and ‘swicy’ continue to grow,” says Heather Prach, VP of education and industry relations at the Madison, Wis.-based International Dairy Deli Bakery Association (IDDBA).
“Sauces are really trending right now, and with global entrées and flavor continuing to grow, there are a lot of opportunities for sauces.” Hot honey, dill pickle and hot barbecue are key trends right now, adds Prach.
“Currently, spicy offerings are on 71% of food menus and 11% of drink menus,” affirms Lauren Talbert, senior director of marketing at Virginia-based Smithfield Foods. She notes a recent study from Chicago-based Mintel showing that for the first half of 2023, 270 limited-time offers showcased that flavor profile.
To meet evolving consumer trends, Smithfield’s Kretschmar’s brand recently introduced a line of sweet and spicy offerings, including Lemon & Cracked Pepper Turkey Breast and a Spiced Pineapple Ham. Additionally, under its Eckrich brand, Smithfield has added a Hot Honey Ham with a touch of chili peppers.
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The company also launched a new Made for More campaign that urges consumers to think beyond just making sandwiches when using its line of meats and cheeses. “Our deli programs go beyond product offering by also implementing best practices for retailers to draw attention to the grab-and-go section and giving consumers inspiration for deli options, including using new condiments, exploring beyond the traditional sandwich, and using descriptive language to stimulate and engage consumers in-store,” adds Talbert.
Consumer interest in more natural deli products is also driving new introductions in the category. “Our Margherita brand is expanding its deli offerings with four new all-natural charcuterie-cut dry sausages: Pepperoni, Italian Dry Salami, Genoa Salami and a duo pack,” says Talbert.
Austin, Minn.-based Hormel Foods recently reintroduced two new items in its Hormel Natural Choice line. The Deli Roast Beef and Rotisserie Seasoned Deli Chicken Breast varieties join a portfolio of natural deli products with no nitrates or nitrites added, and no preservatives.
Additionally, Greenridge Farm, a Chicago-based brand specializing in all-natural uncured deli meats, meat sticks, sausages, cheeses and condiments, recently rebranded to emphasize the brand’s clean-label offerings. Greenridge Farm has also rolled out new packaging.
Staffing Challenges Continue
Retailers continue to grapple with understaffing in this high-touch category. To offset the labor shortages, retailers are responding with more grab-and-go cases and fewer service cases in the deli. “Many retail delis have also shortened their hours to staff during key times,” notes Prach.
“Freshly sliced deli grab-and-go offerings continue to be an area of growth, meeting consumer demands for convenience while [enabling the] purchase [of] high-quality products,” says Talbert. “Retailers are continuing to evolve the deli case to best show offerings, including the addition of merchandising coolers to feature a larger selection of freshly sliced deli grab-and-go options.”
According to Prach, retailers are adding more pre-packaged offerings that are assembled on-site or through a commissary. “As customers increasingly grab more than one meal per stop, grab-and-go hot cases are frequently stocked with more than just the traditional rotisserie chickens,” she notes. “There are breakfast sandwiches and burritos and more side options in the case.”
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The Kroger Co., based in Cincinnati, is just one supermarket chain that has added mobile fixtures throughout the department to inspire shoppers considering their mealtime needs. “Customers are looking for fresh, high-quality items with simple ingredients,” says a Kroger representative. “Across the deli, we continuously work to simplify ingredients statements and elevate quality. We also innovated in categories that have a high importance for non-meat offerings.”
Retailers Increase Variety
When it comes to prepared foods, “meal combos are key,” asserts Anne Nelson, senior manager, deli brand and strategy manager at Beaverton, Ore.-based Reser’s Fine Foods. “We continue to see excitement in meal-bundling programs. Consumers want to see new ready-to-eat and ready-to-heat meal options for both weeknight meals and special occasions.” She adds that pre-packed meal deals that pair high-volume movers, such as rotisserie and fried chicken, with sides such as a Chili Crisp Pasta Salad or a Korean Style Noodle Salad provide variety and value.
“Deli cases have come a long way from the traditional salads,” says Prach. “We are seeing more wings, and chicken and turkey are continuing to be the top meats.” According to Prach, dips, trays and boards for entertaining are more important than ever in the section.
“Price-conscious consumers want restaurant-inspired foods they can heat, eat and enjoy at home – even better if the meals are veggie-forward or feature trending ingredients like chili crisp,” observes Nelson.
Reser’s Stonemill Kitchens five-product salad line brings premium flavors to the case and extends the brand’s footprint in the deli. “Due to their small size, they are perfect for grab and go and offer a very reasonable price point,” asserts Nelson.
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Multicultural flavors are also driving deli category growth. “We’ve introduced many items that explore flavors and spices from around the globe,” notes the Kroger rep. “Our customers love to find new varieties of their favorite products, and we often launch items initially as limited-time offerings, and then find that they become great, everyday favorites.” Kroger recently reformulated its premium chicken to create a double-breaded, hand-dipped version in its signature flavor, and then repackaged it to prolong crispiness.
Meanwhile, Lakeland, Fla.-based Publix Super Markets introduced a limited-time fiery Deli Nashville Hot Chicken Sandwich last year. The retailer combined its spice-marinated breaded and fried chicken tenders with a glaze made with garlic, cayenne pepper and brown sugar, and served the sandwich on two slices of King’s Hawaiian bread and topped by a pickle.
Asian flavors are proving popular as well. “Sushi and Asian options are also strong, especially in the summer months, when temperatures are warmer,” says Prach. This June, Kroger celebrated International Sushi Day with limited-time flavors and special deals on its fresh restaurant-quality sushi made in-store daily. The supermarket chain, which offers cooked and sashimi (raw) sushi rolls, party platters, dumplings, bao buns, poke bowls, salads and Asian rice bowls, is the largest sushi retailer in America, offering rolls and related items at more than 1,800 of its stores nationwide.
Additionally, the pizza category is a key segment, with 9% year-over-year growth, according to IBBDA. “Pizza is strong,” affirms Prach. “It’s a great option that is filling, can be customized and can feed a whole family at a great price.”
Increased Remote Ordering
Staffing shortages and convenience are resulting in more remote ordering in the deli category.
“Remote grocery ordering has been on the rise since COVID, so it’s not surprising to see this extended to the deli,” says Patrick Nycz, president of West Lafayette, Ind.-based NewPoint Marketing. “While it does make sense that new technology can help ease labor shortages, it also requires grocery stores to keep their deli menus updated online or through the app, plus it also requires grocers and shoppers alike to plan ahead to accommodate the growing popularity of grab-and-go prepared menu items.”
