Differentiate your deli
As a result of the global economic crisis, many Americans began to dine out less frequently, opting instead to enjoy culinary experiences in the comfort of their home. And many of these shoppers – who turned to their local supermarkets wall and service delis for products to enjoy at home– opted for store brand deli products over their higher-priced national brand counterparts, says Rich Mitchell, senior retail analyst with the North American division of London-based Planet Retail.
\"[They] found that the items often matched the quality and taste of [the national] brands,\" he explains.
And Mitchell adds that these consumers will continue to stick with these products even as the economy improves. This reality will provide retailers with plenty of opportunities to grow own-brand sales in their service and wall delis – particularly bound salad, soup, dip, salsa and hummus items.
Dont be bound to the basics
In bound salads, Wade Hanson, principal of Technomic Inc., Chicago, expects to see two new trends in both the service and wall delis. First, more and more retailers will be adding a \"layer of uniqueness\" on top of traditional store brand varieties.
For example, Hanson says a retailer might tweak a macaroni salad by using a different type of pasta or adding \"subtle spices\" or chopped vegetables to the recipe.
\"Consumers want to spend their hard-earned dollars on things they know they like, but they also want some excitement,\" he states. \"This type of innovation gives them both – reassurance and something new.\"
And Hanson expects to see retailers widening their selection of better-for-you bound salads under their own brands. For instance, retailers might add products featuring on-trend healthful ingredients such as edamame or chickpeas.
\"These products will not necessarily appeal to the masses, but will be a draw for the health- conscious consumer who often cant find items such as these outside of Whole Foods or organic markets,\" he explains.
Bobby Ray, vice president, retail with Select Store Brands, a division of Ontario, Calif.-based Haliburton International Foods, also sees better-for-you products becoming a bigger deal on the store brand side of the bound salads category. In particular, he points to grain-based salads as an area of opportunity for retailers, as these salads have seen much recent success in restaurants. His company already has developed several types of these salads for retailers to stock under their own brands.
\"Weve got a fire-roasted apple wheatberry salad,\" he says. \"Weve also got a Greek orzo salad that seems to be\" catching retailers interest right now.
Its worth noting that the majority of people who purchase bound salads do so only a few times per year – mostly on summer holiday cookout occasions, says Chris Balzer, senior project analyst with the Nielsen Perishables Group, Chicago. But a subgroup of loyalists purchases bound salads more frequently. And these consumers are the ones excited about healthful offerings and bolder, more exotic flavors.
Soup up your soups
Turning to soups, much of the activity seems to be taking place in the wall deli, Balzer points out, with soups here making up 87 percent of total dollar sales of deli soups during the 52 weeks ending Feb. 23, according to Nielsen Perishables Group data.
\"For the most part, staples are still driving growth – broccoli cheddar, chicken corn, chicken tortilla,\" he explains.
Ray also sees much of the soup activity going on in the wall deli, stating that hes been noticing a number of national brand products that \"seem to be doing great\" and are inspiring retailers to create their own soups for the wall deli – whether the soups are national-brand-equivalent items or more upscale products.
As for the service deli, Balzer notes that even though soups here made up only 13 percent of total dollar sales of deli soups during the 52 weeks, some innovative activity is taking place.
\"We are seeing growth in ethnic/global varieties, suggesting retailers are testing new flavors in-house to connect with the ever-expanding taste palate phenomenon,\" he says. \"This is a strategy we observe a lot in the deli. Its one of the best places for consumers to experience new foods from around the world, [which] they might not know how to prepare on their own.\"
Mexican soups, in particular, are on the rise in the service deli, Balzer points out.
Authentic key in salsa
Just as they do in the soup and bound salad category in the deli, fixed-weight packaged products make up \"the majority of the business\" in the salsa category, Balzer explains. But he notes that he hasnt been seeing a whole lot of flavor and ingredient innovation here, although peach-mango – an \"interesting innovation a few years ago\" – continues to grow.
However, strong innovation potential for store brands exists in authentic-style salsas, Ray says. He notes that many national brands seem to limit their offerings to \"typical American palates,\" leaving retailers with the opportunity to differentiate their offerings with more authentic-style products. As examples of authentic-style products, Ray points to roasted tomatillo verde salsa and mango-pineapple salsa – two of many different types of salsas his company offers, most of which are made with fire-roasted ingredients.
Hummus continues hot streak
Speaking of ethnic offerings, hummus continues to see strong growth. And just like in the soups category, packaged products in the wall deli rule in this category, Balzer notes.
\"The classic varieties continue to drive growth, as weve seen for years – spicy, roasted red pepper, roasted garlic,\" he points out, adding that hes also noticing some up-and-coming varieties such as pine nut (up 17.9 percent in dollar sales during the 52 weeks) and Mediterranean (up 23.1 percent).
However, not all opportunities in the hummus category lie in traditional Mediterranean-style offerings. Ray says he is seeing some retailers beginning to try something a little different with their store brands.
\"It seems that a few [retailers] have been trying to expand their selections beyond the traditional hummus products,\" he states. \"We came up with a black-eyed pea hummus for the Southeast. Were also moving people to white beans and to maybe a curried-lentil hummus, offering some different tweaks of what people could put in it. Its not just Mediterranean anymore.\"
Develop delish dips
Flavor innovation also is critical in the dips category, Ray explains, noting that the traditional French onion dip has run its course.
\"People are hungry now for something new,\" he points out.
To reach consumers desiring something different, his company decided to ride the bacon trend by introducing a bacon-cheddar dip, Ray says.
Balzer adds that global flavors are a rising influence in the dips category.
\"While staples – guacamole, spinach dip, artichoke dip – still drive growth in dips, were seeing a few bold global flavors on the rise, as well,\" he says.
In particular, Balzer says dollar sales of tabbouleh – an Arab salad made of bulgur, chopped vegetables, olive oil, lemon juice and more – rose 10.7 percent during the 52-week period. And in the coming years, these sales are expected to grow.