Growth Continues for Foodservice at Retail

Fourth annual FARE conference propels education for burgeoning channels

SCOTTSDALE, Ariz. -- "The foodservice-at-retail industry continues to grow in share of industry sales," Abbie Westra said at the 2011 Foodservice at Retail Exchange (FARE). "While still a small slice of the greater foodservice pie, it continues to answer consumer demands for convenient, fresh food around every corner, at any time of the day."

This state-of-the-industry overview kicked off the fourth-annual FARE conference on Tuesday in Scottsdale, Ariz. The opening day's sessions included the Leaders in Retail Foodservice awards ceremony and panel, insights into digital [image-nocss] marketing from Gavin Blawie, and the state of food-industry regulations from Rick Berman (see Mitch Morrison's story in this issue of CSP Daily News)..

Westra, executive editor of Fare magazine, offered more insights into the state of foodservice at retail.

An updated snapshot of industry sales from research firm Technomic Inc. showed 2011 nominal growth for the c-store industry forecasted at 1%. Supermarket foodservice sales are expected to grow by 4.5%; college and university could increase by 6.1%; and health care up 4%.

Overall, the core foodservice-at-retail channels, both commercial and noncommercial, are expected to grow their sales this year.

Traditional grocery stores are leading prepared-food sales, according to a consumer survey by Technomic; 88% of consumers reported purchasing prepared-food meals from traditional grocers, followed by mass merchandisers at 77%. Among all commercial foodservice-at-retail channels, mass merchandisers saw the biggest jump in reported prepared food purchases between 2008 and 2010, up 9% in two years.

Frequency of prepared-food purchases has also increased across the channels, with traditional grocers seeing the greatest number of consumers buying prepared foods at least once per week, followed by convenience stores.

For c-stores, the channel has seen a 1% increase in foodservice traffic in each of the last three years, "Which we'll take, given this economy," said Westra. Beverages continue to drive and dominate foodservice sales, with iced tea, diet carbonated drinks and frozen drinks making notable sales gains.

Chicken still rules grocery sales, Westra shared, with a 28% share of dollar sales at the grocery deli, followed by salads and sandwiches. Perhaps surprisingly, male Gen X and Yers are dominating grocery deli sales. "Are you marketing and merchandising to them?" Westra asked.

On the noncommercial front, Westra pointed out the big jump in college and university forecasted growth comes from increased enrollment. Meanwhile, operators are reporting an increase in both revenue expectations and dedicated floor space for grab-and-go operations. Unique hybrid and mixed-retail formats are keeping noncommercial operators competitive against commercial options down the street.

"Some of the most interesting, engaging concepts I'm seeing lately are coming from college campuses," Westra said. "It'd be a benefit to all operators to visit these locations."

The FARE conference, which runs through today, featured breakout sessions on food safety, boosting beverage sales and decoding gluten-free, as well as the annual Trend Translations session. The conference will close with a presentation on "A Food Revolution: The Noodles & Company Story," with Ross Kamens of revolution llc and Jill Preston of Noodles & Company.


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