While foodservice is still in its infancy in the grocery, drug and mass channels -- particularly drug and mass -- sales are nonetheless seeing some movement. Prepared chicken naturally dominates, but pizza is also making notable gains.
Following are insights found in Fare magazine's Foodservice at Retail Handbook, available for download in its entirety at www.faremagazine.com.
[image-nocss]The grocery channel brought in $19.0 billion in foodservice sales last year. It saw 3.0% nominal growth and is forecasted to get a 4.0% bump this year, according to Technomic Inc.
All other retailers, including general merchandise, warehouse, variety and drug stores, rang up $5.8 billion, with 0.5% nominal growth and an expected 2.5% growth in 2011.
Though grocers still dominate food/drug/mass segment, mass merchandisers did make a notable jump in foodservice usage last year. In 2010, 77% of consumers said they purchased prepared foods from mass merchandisers, up from 68% in 2008, according to Technomic figures. Of those consumers, 40% said they did so at least once per week, up from 32% in 2008. This could likely be attributed to well-known brands like Target and its expanding fresh-foods department and Costco with its rotisserie chicken.
Speaking of which, prepared chicken held the largest share of dollars in the grocery deli last year at 27.8% share -- up 1.5% over the year prior. Interestingly, pizza is trending upward. In that same analysis of deli sales, by The Perishables Group, pizza saw a 10% increase in share of sales last year -- though it still only captured 3% of overall share.
Looking strictly at refrigerated prepared foods, fresh-cut salads dominate sales at 51% dollar share for all grocery/drug/mass channels, according to the Refrigerated Foods Association/SMARTeam. Side dishes, entrees and other refrigerated products all saw notable increases in both dollar sales and unit sales from Feb. 2010 to Feb. 2011.
Overall, there's a lot of room for growth in the grocery, drug and mass channels. Many retailers, especially specialty grocers such as Whole Foods, are innovating with unique branding, quick-serve style formats, and conveniences such as separate checkouts and entrances.
That said, the channel as a whole could be more creative, especially if it's trying to compete with c-stores on convenience and QSRs on variety. How the traditional deli will evolve to meet new demographics is also worth watching.
Watch Foodservice Digest for more commentaries on the inaugural Foodservice at Retail Handbook, which looks at sales trends in c-stores, food/drug/mass merchandisers and non-commercial channels, as well as sandwiches, coffee and other key menu categories. View the handbook at www.faremagazine.com, and email your questions or comments to awestra@cspnet.com.
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