By Mark DiDomenico
Datassential, Inc.

Today’s consumer is much more engaged with the foods and beverages they consume. Subsequently, they are driving faster adoption of trends. Nowhere is this more evident than in the restaurant channel, where operators are challenged with developing new and enticing menu options for their patrons’ ever evolving tastes. Those trends are also providing great challenges and opportunities for supermarkets, which are increasingly competing with restaurants.

Datassential recently published an in-depth analysis of how supermarkets can grow their prepared food departments and become popular and profitable food service destinations in their own right. Here are some of our key findings regarding the challenges and opportunities faced by supermarkets today.

• Most operators (40%) mention competition from restaurants, including both quick service and full service locations, as their primary growth challenges. Limited space and staffing are also concerns. An understanding of restaurant traffic and menu trends are key to identifying growth opportunities.
• Supermarket deli operators are seeking growth opportunities for their prepared foods business. On their last visit, 53% of consumers reported purchasing prepared foods for dinner vs. 34% for lunch. While these are the top dayparts overall, there is a significant opportunity to grow the breakfast and snacking occasions in the deli in order to drive non-peak daypart traffic.
• Only 39% of consumers report making a prepared food purchase frequently or always, leaving 61% who purchase only occasionally. This represents a sizeable conversion opportunity, provided the operator has a competitive product offering. In addition, consumers are more interested in healthier items, as well as items that feature new and unique flavors. Again, following the trends at restaurants will yield a variety of product, ingredient and flavor ideas.
• First and foremost, though, are the factors that consumers use when evaluating the prepared foods offering at a supermarket deli. Freshness is always listed as the primary factor (65% reporting). Cleanliness of the area is a close second, mentioned by 62% of consumers as a key factor. Interestingly, food item visual appeal is third, ahead of price. Pricing is usually higher up on these type of lists, but seems to be slightly less of a factor here. Cleanliness and fresh, visual appeal of the food are most important. Further analysis points to some hidden or underlying drivers, including friendly/knowledgeable staff, variety of offerings, packaging options, clear signage, and the ability to see the food being prepared. That last one is critical, as we have seen strong growth of open kitchen concepts at restaurants for some time. Fast Casual concepts like Chipotle do an excellent job of providing consumers with sight lines into the actual food preparation process.
• Part and parcel to an open kitchen is the concept of engaging all of the senses, not just sight. 36% of consumers rate having freshly baked bread as a dinner purchase motivator. Fresh baked items can produce aromas that are as strong a motivator, if not stronger, than any visual appeal.
• The top items that consumers asked for were chicken (fried and rotisserie), hot sandwiches, pizza, hot appetizers and sides, and desserts. Again, supermarket deli operators can look to the major chains to see what is being launched in each of these categories. Of course, regional tastes and consumer demographics should always be considered when adding new items to the menu.

Join me on Sept. 22-23 for Supermarket Sense, where I will explore these concepts further in a session titled “Restaurant Trend Opportunities for the Supermarket: Identifying trends at restaurants and how retailers can adapt them for prepared foods success.”