Supermarket delis can  bridge food-safety knowledge gaps that consumers have.
Supermarkets can build their food safety authority with educational programs, signs and consistency in what customers see in the deli department.

Food safety and cleanliness are important to consumers in supermarkets, especially in-store service deli departments. And if customers perceive food safety and cleanliness by employees are lacking in delis preparing fresh foods, they will likely walk out of the store and probably never return.

Those are the high stakes for food safety, especially among in-store delicatessen departments, highlighted in a new exclusive consumer research report recently released by the International Dairy-Deli-Bakery Association (IDDBA) called “The High Stakes of Food Safety in Dairy-Deli-Bakery and Prepared Foods.” The report was prepared for IDDBA by Phil Lempert, also known as the SupermarketGuru. The idea was to survey American consumers about their confidence in food safety in supermarkets, particularly within the deli, prepared food, dairy and bakery areas of the store.

Americans crave convenient meals today, made from prepared foods, easy-to-heat and ready-to-heat takeout, conveniences that play to the strengths of in-store delis. To stand out as primary destinations, supermarket delis must be impeccably clean and safe, because that continues to be a top concern for consumers.

People have time to observe a lot while waiting in lines in delis, dairy and bakery departments. They see everything from food servers’ grooming to the state of the physical setting; from workers’ hygiene habits to cleaning methods for slicers, counters, showcases and trays; from food handling to temperature integrity – and a lot more. The report underscores how food safety practices in deli-dairy-bakeries impact a store’s total performance and its credibility with shoppers as a primary resource of health and wellness foods and beverages.

The report shows one-third of US adults have ended a supermarket visit due to store messiness. And those shoppers are pickier about food safety within the deli-dairy-bakery than in the store as a whole. Eighty-five percent of shoppers need to feel confident about food safety in the deli and the dairy-bakery service areas before buying food there.

There are five areas of supermarket food safety leadership that stem directly from deli-dairy-bakery departments:

1. Food must be handled in pristinely clean areas;
2. Food handlers must wash hands and change gloves often, in full view of customers;
3. The department must receive the highest grade from a food safety inspector, and this rating should be posted for customers to see;
4. Food handlers must wear hair restraints;
5. Food handlers must wear clean jackets, aprons or uniforms.

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Good news for delis

The good news for delis is that supermarkets are the most trusted retail format.
Consumer demand for fresh foods and the increasing quality of deli prepared foods are driving growth in the deli segment.

The good news for in-store service delis is that supermarkets are the most trusted retail format, three times more trusted than specialty stores, according to the IDDBA. Within supermarkets, consumers trust service perishables department managers the most for food safety vs. store managers and butchers.

Supermarkets, especially delis, can bridge food-safety-knowledge gaps that consumers have, and build their food safety authority with educational programs, signage and consistency in what customers see. It’s important for delis and supermarkets because the survey found that 96.5 percent of adult survey respondents said they shopped in supermarkets for deli, dairy and bakery items.

Increasing consumer demand for fresh foods and the increasing strength of deli prepared foods in grocery stores and supermarkets are two of the driving trends strengthening the deli segment this year, according to industry analysts.

According to Nielsen Perishables Group FreshFacts, the deli department, thanks largely to the success of deli prepared foods, provides strength to groceries, giving grocers the ability to compete with foodservice/restaurants for consumer dollars. In order to innovate and offer convenience to their shoppers, retailers have expanded the reach of their prepared foods in the last five years to reduce the need for extra trips to restaurant locations. As a result, deli sales have kicked into overdrive as retailers cater to multiple eating occasions throughout the day. Now they offer higher-quality items in order to compete directly with restaurants and reinforcing the quality perception of the entire retailer.

US sales of perimeter-of-the-store food items were $296 billion this past year, says Patricia Johnson, global food analyst for Mintel International, almost a 15 percent increase over 2009 sales. “Growth is attributed to increasing consumer interest in fresh and healthy foods, as well as prepared foods,” she says.

“Sales growth of deli prepared foods (18 percent by 2019) from $11 billion to $13 billion is forecast to outpace all other perimeter categories,” she says. “Convenience, freshness and selection drive sales in the in-store deli department. Specifically, customers are looking for specialty meats and cheeses, as well as products labeled as natural.”

According to Lightspeed GMI/Mintel, consumers say they like shopping at grocery specialty counters, including delis because:

• “I like being able to select what I want.”
• “The staff at specialty stores are more knowledgeable about the products they sell.”
• “Food items from specialty (deli) counters are fresher.”
• “I wish more stores I shop had individual specialty counters,” and
• “You get better value from specialty (deli) counters.”

Deli meats from the fresh or service deli are brand driven, according to IRI.
Consumers will seek out name-brands of deli meats that satisfy their need for fresh foods, according to IRI.

Mintel believes the packaged lunch meat segment will grow 15 percent by 2017 to almost $6.8 billion, and Johnson attributes this to some consumers brown-bagging it more often and eating in more, but also to product innovation in flavor, premium characteristics and convenience/usage.

“Convenience is something the segment can uniquely capitalize on with products that help consumers consume lunch meat faster, while on the go,” she says.

She also notes that about half of lunch meat products are sold through the deli counter, while the other half are pre-sliced but already packaged. The growth seems to be at the deli service area because consumers think of it as being fresher and of high quality.

Chris DuBois, senior principal at Information Resources Inc. (IRI), reports that deli prepared food showed 8 percent growth last year, including meats, sushi and salads. He notes that while there is customer demand for both fresh deli items and packaged items, there are really two kinds of customers looking for each of these products.

“Deli meats from the fresh or service deli are very much brand driven – brands like Boar’s Head and Dietz & Watson,” DuBois notes. “For some customers, freshness is the top priority, and they will search out these kinds of brands. This is where the real growth is.

“But there is still a strong mainstream market for pre-packaged deli items,” he adds. “The main interests here can be value and convenience. These customers may perceive the service deli counter as more expensive; pre-packaged is really more about speed and convenience. If the deli counter is not staffed when they’re there, they’ll pick up packaged items.

“For example, if a customer comes in and thinks, ‘I need a pound of meat for the kids’ lunches,’ he or she may think it’s a better value to pick it up at the packaged deli area. Or sometimes customers may like the product tub, thinking they can wash it and re-use it. There are lots of reasons,” DuBois says.

He notes that numbers are very important for the service deli vs. packaged deli items, and why people are choosing one over the other. “A lot of lunches still come from home. Seventy percent of deli sandwiches may be for lunch vs. only 30 percent for dinner sandwiches,” he says.

He points to the increasing move toward premium deli cuts, such as Boar’s Head, and brands like Dietz & Watson. “Boar’s Head is 25 percent of the volume across the US, but Dietz & Watson and other similar companies are moving in the same direction – and people increasingly want the premium products.” This trend has grown since the American economy began improving after the 2008 recession. “Employment has picked up,” DuBois says, “but if people want less-expensive meat, the packaged side of the industry can certainly solve that.”

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He notes that in the world of service delis and packaged products, there are two different shoppers and each prefer a different type of product. “Service deli consumers value the brand, where packaged product shoppers are usually more interested in price, value and convenience,” DuBois says. “But that doesn’t mean people never go back and forth between service deli and packaged, sometimes they do.”

Other trends DuBois sees in the deli business include organic and antibiotic-free products becoming more important and playing a bigger role in deli. “Today, more people will walk away and find something else if a product doesn’t meet their needs.”

Retail opportunities

Millennials thrive on discovery, global flavors and new experiences.
Millennials are a strong potential source of new business.

According to Eric Richard, education coordinator for IDDBA, there are a number of opportunities for retailers to connect with shoppers at the service deli counter – one of which is “storytelling.”

“Today’s consumers, especially millennials, want to know where their food comes from. Delis can connect with consumers through storytelling,” Richard says. An increase in consumer snacking and demand for smaller portions/single-serve/on-the-go options puts in-store delis in a good position to compete with restaurants. New flavors, such as those originating from Mediterranean and Indian cuisines, are a natural for delis,” he states. “And a focus on more local and healthier products, as health and wellness becomes an increasingly important consideration among shoppers, is an excellent opportunity for in-store delis,” Richard further explains.

IDDBA also looks at consumers’ reasons to shop or not shop the deli. According to Richard, the in-store deli attracts about half of all shoppers on a monthly basis, fewer than dairy, but ahead of prepared foods or specialty meats. “Of all fresh perimeter categories studied, deli may represent one of the greatest opportunity areas to build traffic and loyalty,” he explains. With deli shoppers, ensuring the items are fresh is very important. Older shoppers (boomers plus) rate their preferred deli departments especially high for freshness and wide variety, suggesting these are the most critical issues to get right to satisfy shoppers.

“Retailers need to be vigilant about keeping deli items appearing and tasting fresh. Signage that can underscore “made on” dates is a way to underscore freshness and provide information that many shoppers want,” Richard says. “At a minimum, retailers should do internal checks to assess quality and freshness – does it measure up to foodservice quality? Consumers mention this as a gauge they use to assess deli offerings.”

Millennials are a strong potential source of new business if courted properly, Richard believes. Millennials are more likely to be attracted to the deli and specialty meats departments, even compared to older age groups. The appeal is fresh, fast food – snacks and meals to eat in the short term with little time or effort invested.

“Millennials thrive on discovery, global flavors and new experiences. So it’s no surprise that they are looking for more unique items from the deli,” Richard says. “Deli departments that can change offerings frequently, leverage new flavor and ingredient trends, create new foods with quality distinctions and become millennials’ ‘sous chef’ will have an opportunity to build trust and long-term relationships with this important group.”