Slice Up Sales

For consumers who want food that is both convenient and fresh, the deli offers multiple options, and more shoppers are visiting it precisely for those reasons. In its “What’s in Store 2015” report, the Madison, Wis.-based International Dairy, Deli, Bakery Association (IDDBA) says millennials, rather than boomers, are becoming the largest generation of shoppers of the deli.

“It appeals to several values the generation tends to share, such as convenience, variety, the ability to experiment with food without needing culinary experience, and quality and freshness of products,” IDDBA states.

And prepackaged meat and cheese sold within the deli area also stands to appeal to those values.

Think flavor

Millennials, in particular, are looking for prepackaged cheeses with unique flavors — not just the standard varieties. While American remains the No. 1 selling cheese, other cheeses are seeing sales increases as well, IDDBA states. Gouda has seen a significant jump in sales, and Hispanic cheeses — such as Queso Fresco — and Italian cheeses are exciting shoppers as well.

“Bold, aged flavors, as well as smoked cheeses, are trending right now,” says John Stephano, director of marketing and training at Elizabeth, N.J.-based Atalanta, a privately held importer that supplies foods in a number of categories.

And ingredients such as cinnamon, onion, garlic and even poppy seeds that provide unique taste experiences are being added to cheese, IDDBA states.

“The flavors are virtually endless in the cheese case today,” IDDBA adds.

Regardless of variety, retailers looking for growth in store brand deli cheese might want to keep their eyes on the overall market for natural cheeses.

“Strong interest in natural cheese, driven by artisan varieties and new flavors, will contribute to sustained growth in the category,” IDDBA notes in its report.

Consumers also want more flavor from prepackaged deli meats.

“Ethnic flavors have been added to deli meats for years, and they’re continuing to evolve,” says Jonathan Whalley, education coordinator at IDDBA. “We’re also seeing the increased popularity of charcuterie — products which tend to have bold flavor profiles.”

Call out health benefits

Besides products that taste great, shoppers want products that are more healthful. For deli meats in particular, consumers are increasingly requesting antibiotic-free (ABF) options.

“Delis are starting to wake up to the ABF trend for private label,” says Jeff Schwartz, national sales manager for private label retail at West Liberty Foods, headquartered in West Liberty, Iowa.

According to a Nov. 3, 2014, article in The Wall Street Journal, the market for ABF meat currently stands at about 5 percent for beef, pork and chicken. However, that number is growing. Citing data from Chicago-based Information Resources Inc., The Wall Street Journal reported that sales of ABF chicken rose 34 percent at U.S. retailers in 2013.

Companies such as Panera Bread Co. and Chipotle Mexican Grill Inc. have been offering ABF meat options for a long time. But McDonald’s Corp.’s recent announcement — that within two years, all chicken it sells will be ABF chicken — could raise interest and awareness even more.

Consumers are also concerned about high levels of sodium and preservatives in deli meat and cheese.

“We’re seeing some shoppers eating smaller portions of highly flavorful deli meats and cheeses as a way to cut back on sodium,” Whalley says.

Additionally, retailers could call out health benefits on deli packaging. For example, retailers could point out the high protein content of cheese, Stephano states. And clean labeling is important, too.

“Complete transparency and a simple, short ingredient deck will go a long way,” he adds.

Focus on quality

Although store brands are usually associated with value, the deli might not be the best place for retailers to focus on low prices. Instead, they might want to focus on premium deli options. After all, customers already know they could buy the more value-oriented deli meats and cheeses elsewhere in the store, and they are expecting to find higher-quality products in the deli. Still, Schwartz says he doesn’t always see retailers emphasizing the quality of own-brand offerings.

“I think too often, they gravitate to the lowest common denominator or the most basic when that isn’t what consumers are looking for,” he says.

However, this attitude could be changing. He cites The Kroger Co., Cinncinati, as an example of a retailer that is doing a good job with its private label deli selections.

“It’s all about having the right variety, having the right quality tiers and hitting on trends such as ABF in addition to just the basics,” Schwartz adds.

One means of providing higher-quality products is with better packaging. According to Schwartz, peel-and-reseal packaging is a more modern, user-friendly choice than the older zipper packaging.

“Many shoppers aren’t big fans of zipper packs,” he says, pointing out that zippers often leave consumers having to awkwardly stuff the deli meat back into the bag, and the bag is susceptible to tearing.

Provide an education

Education also could play a big role in prompting customers to buy a new meat or cheese.

“Retailers have an opportunity to educate consumers on the variety of types, names and even common flavor descriptors so consumers have the confidence to try new products and better understand and experience what they’re eating,” Whalley says, adding that increased education could override consumer concerns about higher prices in the deli.

With shoppers increasingly interested in knowing the origins of their foods, one education tactic that could lead to success for store brands is to give consumers the product’s history.

“Millennials, which is the group that the market most focuses on today, realize that the origin of the food — the story — is just as important as the taste of the actual product,” Stephano says.

In its 2014 “Engaging the Evolving Shopper” report, IDDBA also states that consumers desire more product information.

“Shoppers are seeking much more nuance from specialty cheese and are more concerned about implicit attributes, including artisanal production, ingredient quality and source of the product,” the report says.

Displays are another way retailers could educate customers about deli cheeses while also helping store brand products get noticed.

“In-store displays, whether in or out of refrigeration, that can be paired with accompaniments such as crackers and nuts that work with that cheese highlight usages which are key to getting the consumer interested,” Stephano says.

And for cheeses that have won awards, IDDBA suggests a display just for those winners.

“They give customers the confidence to try a new cheese,” it states.

Do offer high-quality meat and cheese at the deli counter.

Don’t overlook the connection between education and deli purchases.

Do provide unique and interesting flavor profiles.

Don’t ignore the trend toward antibiotic-free deli meats.