Here’s one way to track certain food trends: follow the money trail. USDA officials say that during 2012, consumers spent 5.7% of their disposable income on prepared foods for home meal consumption, versus 4.3% spent on food away-from-home purchases. Although USDA data for 2013 are not yet available, Nielsen now suggests that Americans spend just more than $6,000 per capita on food, which is equivalent to roughly 10% of all spending.
Nielsen also is looking more closely and critically at those foods prepared and sold for at-home meals. Its researchers note that more consumers -- on the lookout for something new and, particularly, “fresh” -- are exploring in-store delis for an increasing share of meal solutions.
One result has been a significant downturn in frozen department sales. In fact, dollar sales of frozen juice, chicken and pizza are all down since 2009 (by 26%, 9.3% and 5.6%, respectively), per Nielsen. Likewise, Euromonitor International found that retail sales of all U.S. frozen meals dropped 3% from 2009-13.
Nielsen notes that ConAgra shelved a number of its Healthy Choice frozen dinners due to lagging sales and changing consumer attitudes. Interestingly, although consumers have trended toward health-conscious foods, this shift has not necessarily helped frozen meals. Elsewhere, Information Resources’ data suggest Stouffer’s Lean Cuisine, a Nestlé line, lost more than a quarter of its sales during the past five years.
And when the Wall Street Journal recently looked at the freezercase malaise, Rob McCutcheon, president of ConAgra's consumer frozen food division, observed, "Within this foodie culture the last few years, I think there has been a change in how some people define healthy foods. There is definitely a push toward products that are more real, higher quality, more homemade and closer to the source."
Right or wrong, more at-home meal shoppers view supermarket in-store delis as their source for higher quality, fresh products.
In its report "Consumer Shopping Dynamics: The Decision Tree," the International Dairy-Deli-Bakery Association (IDDBA), notes, “The majority of shoppers pass through the deli and bakery because they're curious. We discovered that most of these shoppers didn't make the decision to stroll through the department until AFTER they entered the store. Their reasons for adding a ‘look-see’ to their route included checking to see if anything was new, eye-catching displays, themed merchandising, creative signs with highly readable fonts, and visual appeal for the whole department (including cleanliness, lighting and ambiance)."
Meanwhile, other researchers are looking closely at who’s shopping the deli and what they’re looking to purchase. Addressing attendees of the 2014 International Dairy-Deli-Bake Seminar and Expo, Laurie Demeritt, CEO of The Hartman Group, said many Millennial shoppers are looking for items in dairy, deli and bakery outside of their primary store. Demeritt noted this valuable demographic often looks for what they perceive as value and variety. Millennials, she has found, sometimes shop fresh categories in other mainstream stores, but when seeking specialty cheeses and bakery, this demographic will seek out specialty stores. In fact, she finds half of Millennials leave their primary store to purchase specialty cheese.
Furthermore, two-thirds of Gen Y consumers shop at least monthly for specialty meats. Comparatively, only 45% of Baby Boomers do so. While 39% of Baby Boomers shop for specialty cheeses at least once a month, more than 61% of Millennials do so. In addition, citing research in the IDDBA-commissioned study “Engaging the Evolving Shopper: Serving the New American Appetite,” Millennials shopped an average of nine different stores in the past three months; Baby Boomers averaged only six stores during that same timeframe.
Of the 850 adult shoppers who participated in the survey, 46% of Millennials left their primary store to buy fresh prepared foods because of their preference for specialty stores. This is a substantial disparity when compared to the 35% of Baby Boomers who do the same. Overall, a quarter to half of shoppers, depending on the category, will look beyond their primary retailers to seek out new or high-quality food products
“[Millennials] want to know more about the store behind [their food choices], where did [the food] come from, who made it and what the company stands for,” Demeritt said. “They also believe they should have more of a voice, more of a say, in what’s coming out in the market.”
In-store shoppers no doubt are applying those same real food choices and considerations to another popular, perimeter department, the in-store bakery. Meanwhile, a Nielsen Perishables Group report suggests that more shoppers are turning to in-store bakeries for sweet treats. The report finds the volume of individual desserts sold by U.S. supermarket in-store bakeries grew by 3.4% in 2013 compared to the previous year. Moreover, brownie and dessert bar sales rose 15.9% in volume and 14.2% in sales in 2013 over the previous year.
One large in-store bakery supplier, Rich Products Corp., used this year’s Dairy-Deli-Bake Expo to promote a growing trends in desserts and confections: the idea that smaller is better. Among Rich’s many new products were a Mini Chocolate Brownie Extreme, a Mini Caramel Sea Salt Blondie Extreme, a Mini Boston Crème, and three flavors of bar cakes described as “ideal for two people to share.” Those varieties are Red Velvet, Triple Chocolate and Carrot.
“Research tells us that sales of smaller-portioned desserts are continuing to grow, driven by smaller households and an increase in snacking frequency by consumers,” notes Mariah Kerwin, Rich’s associate marketing manager, Desserts. Officials say the Mini Chocolate Brownie Extreme and the Mini Caramel Sea Salt Blondie Extreme both come fully finished and packaged and require no on-site labor.
For that matter, Rich’s product developers are doing their homework and mining menu trends. According to a 2013 report from Datassential MenuTrends, chocolate remains America’s number-one dessert flavor, while the combination of buttery caramel with savory sea salt also continues to increase in popularity. In fact, MenuTrends reported that the caramel sea salt flavor registered a 850% increase in U.S. menu incidence between 2009-13.