CHARLOTTE, NC. — Bakkavor USA, a subsidiary of UK-based Bakkavor, is helping retailers keep fresh prepared food profitable in a post-pandemic world.
While the past year saw shoppers largely forsake self-serve options and deli service items in favor of canned, boxed and frozen foods, Bakkavor USA’s packaged fresh prepared items allow retailers to address safety and hygiene concerns while simplifying their operations, said Peter Laport, chief executive officer. The company offers more than 300 varieties of packaged meals, dips, pizza, and bread in the United States.
“COVID has changed the behavior of both consumers and retailers,” Laport said. “Hot bars and self-serve options have been shut down, and they’re probably going to stay down. Retailers aren’t offering it and consumers aren’t asking for it. I think that is a long-term change for supermarkets. People are not going to want that potential cross contamination from other consumers.”
Bakkavor is unique in the United States because it offers individualized, customized items developed specifically for its partners that are already packaged and prepared, he said.
“We have an opportunity to capitalize on providing a solution where they can simplify their backroom, their deli area or wherever they’re assembling fresh prepared items,” Laport said.
The company resigned from its foodservice and co-manufacturing business in 2020 to simplify operations and focus on building long-term relationships with successful retailers. As part of the simplification process, it resigned from around 50% of its customers and reduced its product portfolio by a third. It used the commercial reset to invest all innovation and process improvements behind three key categories that address the growing trends for healthier, fresher and more convenient foods.
“One is what we call the fresh ready meal,” Laport said. “That is usually a protein with starch. That continues to grow. Even with people working from home and staying at home more, they’re not shunning those fresh meals.”
The company saw growth in family size meals as consumers sought to recreate the restaurant experience in-home. It responded by launching unique fresh prepared meals in a family-style format across two of its largest customers. It developed a national distribution of fresh prepared meals for a home delivery meal kit business and established partnerships with several online retailers to capitalize on the growing trend of direct-to-consumer delivery.
Bakkavor USA also invested in its dips and hummus business, which continued to grow with consumers purchasing those items for holidays and special events, and in its fresh bread and pizza business, which saw the most growth during the pandemic.
Pizza was the most resilient category because it provides two important meal solutions, both as an easy midweek meal, which benefited the company’s core ranges, and as a treat for the weekend, which benefited its premium and takeaway style products.
“We have a bakery here in the Charlotte area that provides national distribution,” Laport said. “We also provide a topped, fully cooked pizza. It isn’t a traditional frozen pizza. It’s a super-premium product and we do those custom designed for the retailers we work with. That business has been really strong in the last 12 months, so we look at fresh pizza as being a key offering.”
The company is looking to build on the momentum it gained in 2020 by growing with its current partners and expanding into new geographies. It sees significant runway for its fresh prepared meals business in particular.
“A lot of the retailers have been doing something like this, but they haven't done it in packaging for easy-to-grab,” Laport said. “It's been at hot bars or behind the deli counter. The convenience aspect — where you can go in and get a fresh prepared meal that you go home and reheat — a lot of retailers haven’t quite embraced that yet.”
The meal kit storm that hit the United States in the last 10 years has continued evolving, he added.
“It’s not as strong as people thought it was going to be,” Laport said. “We have an offering that requires a lot less work. It’s the same quality that you could get if you were to prepare fresh ingredients, because that’s basically what we do in our factories. We take those raw materials and turn them into a fresh meal. There are very few folks in the United States that can do that at scale. This category is worth billions of dollars and we’re at the beginning of it.”