For today’s consumers, an on-the-go lifestyle leaves less time to prepare traditional meals they may have grown up with. As a result, meal kits available within the grocery store are picking up steam and providing consumers with more options for quick and easy solutions. In fact, just over the last year, in-store meal kits surpassed more than $80 million in sales and are expected to top more than $100 million by 2020, based on current growth rates. While meal kits are a great option for those who enjoy being in the kitchen, there’s an even quicker option for time-starved shoppers. Grocery stores continue to provide an abundance of deli-prepared options that require no additional prep-time and are ready to eat, capturing those that may not be as skilled chefs.
Grocery stores that focus on innovation within deli prepared are seeing stronger growth than those that do not. The deli prepared section alone is worth $15 billion in the U.S., growing 4.5% in the last year (52 weeks ending Dec. 31, 2016) and accounting for 59% of all deli purchases. So, who is driving this growth? Affluent, older consumers who live in urban centers are helping drive and sustain sales within deli prepared. Households with an income over $100,000 are 20% more likely to purchase items in the deli prepared section. Empty nesters and senior couples, likely with a higher disposable income, are also more likely to shop in the deli prepared section, purchasing 17% and 21% more than the average consumers, respectively.
As consumers change where they spend their food dollars—with more being spent away from home—retailers who can provide consumers with a variety of prepared foods will help ensure dollars stay in the grocery store. And with online food-delivery platforms expanding choice and convenience, and allowing customers to order from a wide array of restaurants with a single tap of their mobile phone, grocery stores need to work even harder to keep the dollars within their four walls.
Still, retailers face some roadblocks when trying to appeal to today’s ever-evolving shoppers. One-quarter of consumers feel that deli prepared food lacks health/nutrition, while 17% feel it is expensive and 16% state is lacks freshness. So, what can retailers do to overcome these hurdles and encourage continued shopping within the deli prepared section? Tapping into key trends across the store—convenience, health and wellness and multicultural flavors—will help retailers engage the changing consumer.
Prioritizing speed can help pull in consumers that may otherwise think a trip to the grocery store is too time consuming. For consumers who are just looking for a quick meal, retailers should make it easy for consumers to get in and out quickly, with the deli prepared section near the front of the store or adding separate checkouts. But it's also helpful to remember that some consumers may be pressed for time but still enjoy cooking or desire more control over the ingredients that go into their meals. Retailers should look for ways to better serve these consumers, including expanded meal kit offerings sold in-store.
At the same time that consumers demand speed, they also want fresher, more healthful items. Retailers should consider expanding their array of better-for-you options, including those with special dietary needs. Kale, for example, is no longer a product just for health nuts. It can now be found in more than 19% of categories across the store as consumers demand healthy products and retailers respond.
As the U.S. population continues to grow and diversify, African-American, Asian-American and Hispanic consumers collectively are influencing a variety of product categories and industries, including grocery. At the same time, palates that favor multicultural flavors are influencing the taste preferences of non-Hispanic whites and society at-large. And with almost one in three Americans consuming foods that contain multicultural flavors at least once a week, adding a multicultural flair to deli prepared offerings may help drive interest and consumption.
As consumers eating and shopping habits continue to evolve, retailers need to ensure they are providing innovative, healthy and convenient products to keep them coming back and ensure their dollars are not being lost to other meal options. Through constant innovation, you can stay ahead of consumer needs and keep them thinking about the deli as an option for easy meal solutions.