January 9, 2014
The last few years have been strong for retailers presenting and selling freshly prepared ready-to-eat (RTE) meals. Mass market grocers, specialty stores, drug and convenience operators have learned to increase food options for customers while keeping a fair amount of customization and personalization in the process. That’s been a winning formula to attract customers who are time-starved, but want choices that fit in with their lifestyles.
In fact, recent data from the National Association of Convenience Stores show that average monthly foodservice sales at c-stores are growing nearly 9% year-over-year, when overall sales only grew about 3%. In a 2012 report by Packaged Facts, Prepared Foods and Ready-to-Eat Foods at Retail, 39% of adults said they had purchased such a meal from a supermarket in the past 90 days, significantly higher than the 32% who said they had purchased from c-stores, so the time is certainly right for prepared foods to be expanded in the convenience channel.
The time is also right for continued growth in the supermarket channel, particularly since it’s appealing with those having higher discretionary spending power. Those with household incomes greater than $100K were 14% more likely to purchase RTE meals from supermarkets than those with more moderate incomes.
Retailers have seen the benefits of offering a personalized fresh food experience to consumers in the form of ever-growing RTE meal sales:
• Hot bars and salad bars have allowed customers to assemble customized options and incorporate an increased array of international foods, a la Whole Foods
• Delis are used for personal- and family-sized options that cater to singles and families of all sizes. Rotisserie chicken can now be purchased in half, quarter and odd sizes for individual consumption.
• Increased options like individually-packed chicken wings or sandwiches and RTE sushi allow for meal mash-ups once the consumer gets home and are appealing to young consumers and Millennials. Packaged Facts found that 18-24 year-olds were more likely than average to have purchased RTE foods.
• Wegman’s, with 83 upscale, mega-supermarkets in the Northeastern U.S., has built mini-sushi eateries that feature tap beer choices and freshly prepared sushi in an ambience that includes chefs, like the one at The Village in Leesburg unit in Virginia. This gives the ultimate personalization: an eatery within a grocery store that caters to their whims.
• In-store bakeries that fresh-bake product throughout the day are offering elements of personalized options that the consumer can take on the go.
Packaged Facts reports retail dollar sales of in-store bakery goods reached $13.4B in 2013, according to its recently released In-Store Bakery Goods Market report. Although the preparation and display of baked goods vary from retailer to retailer, there is an added advantage of presenting this option. The in-store experience that includes fresh and appealing options, such as fresh-baked cookies, pastries and cakes and broadcast their aroma and visual beauty, increases the appeal of food retailers to consumers.
What started as salad bars and rotisserie chicken that was relegated to the back of the supermarket in the days of yore, is now a category that exceeds $33B ready-to-eat, deli and heat-and-eat food sales, according to our analysis, growing at a compounded annual growth rate of more than 7% through 2014.
Think about how incorporating fresh and personalization into food options can boost the sale of RTE meals within your food retailing organization. Will you ride the wave of consumer cravings for these types of foods?
Add either Prepared Foods and Ready-to-Eat Foods at Retail, 2nd Edition or In-Store Bakeries: U.S. Market Trends to your own intelligence library and receive a 5% discount during our promotional period effective through March 28, 2014. Use code PFFood2014.
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