What’s Going on With Foodservice at Retail?

Following a tumultuous year for the category, FMI — The Food Industry Association is out with its 2021 “Power of Foodservice at Retail” report. The annual review of grocery prepared foods explores recent trends and opportunities for future growth at a time of continually-shifting consumer eating preferences.

Among other findings, the report reveals a move toward hybrid meals that allow people to prepare meals at home with a little help. More than half – 55% – of people surveyed said they are looking for meal options that are a mix of semi-and-fully prepared items. More than two-thirds of consumers who typically prepare hybrid meals report that they plan their dinners a few days at a time.

Another notable theme in this year’s “Power of Foodservice at Retail” analysis is the use of technology, among both shoppers and grocers. More than half of survey respondents expressed a desire to order deli prepared items with a smartphone. Not surprisingly, younger consumers prefer using their phones or kiosks to order, compared to 89% of Baby Boomers who like to order from a person.

While grocers can enhance and expand their foodservice-at-retail programs through things like hybrid meals and convenience-oriented technologies, there are other areas for growth in this category – namely, making the department more visible. FMI’s latest report shows that more than a third of consumers don't recognize their local grocer as a foodservice option due to lack of menu choices, up slightly up 2019 figures. At the same time, shoppers say they are facing cooking fatigue and time constraints, trends that would seemingly open the door to a greater embrace of foodservice offerings.

According to Rick Stein, VP of fresh food for FMI, the report affirms a category with potential coming out of major changes in behaviors. “Grocery foodservice is at a competitive inflection point when we look at the state of the U.S. food dollar and the fact that 59% of Americans expect to cook as many meals at home as they do now,” he said. “The analysis suggests grocers are positioned to be the ultimate mealtime solution in that 39% of consumers view retail foodservice as a substitute for a both a home-cooked meal and a restaurant meal.”

The 2021 “Power of Foodservice at Retail” was prepared for the Washington, D.C.-headquartered FMI by 210 Analytics and published with support from Hussmann Corp. and Produce Marketing Association.