August 1, 2007
By Megan Pellegrini, contributing writer
For now, at least, consumers are willing to pay a higher price for premium product.
Who wouldn’t want to phone in a food order, drive up to a designated spot and have it brought out to you? For those looking beyond fast food or casual dining pickups, Publix supermarket is test-marketing curbside service of deli items in Fort Myers, Fla.
Indeed, in the current retail environment, one man’s deli of tired, dried-out hot foods could be another man’s delicious restaurant-quality destination spot. Consumers are still dependent on local grocers to define their experiences. However, it appears that recent product innovations, improved packaging and natural introductions are revitalizing the $15.4 billion deli meat category.
“[Retailers] that understand their consumer target and how to appeal to them with selection, quality, value and service — the way they are looking for it — will find a way to beat the competition and keep consumers from choosing their store based solely on price,” says Chris Bekermeier, marketing manager for Butterball’s retail deli division,in Mt. Olive, N.C., which recently launched an expanded grab-and-go deli line with Buffalo-style and fried chicken breasts and marinated fried turkey tenderloin.
It seems the deli meat industry is getting the message. New, convenient products helped reverse deli’s declining numbers, and the category has averaged a roughly 0.8 percent increase in dollar sales, according to Schaumburg, Ill.-based ACNielsen.
Certainly, 2006 brought a slew of new product launches from industry stalwarts, such as Hillshire Farm’s Deli Select Combos, Oscar Mayer’s Shaved Deli Roast Beef and Deli Creations sandwich melts, Smithfield’s Sandwich Keepers and Healthy Choice’s Deluxe Thin-Sliced line.
This summer, Carl Buddig and Co. even reached out to younger consumers by offering a free digital song for each package of Buddig or Old Wisconsin deli meat purchased.
“Today’s consumer has a short attention span and wants to be excited,” says Bekermeier, noting that shoppers won’t risk buying an item without assurances they will like it. Suppliers and retailers can counteract these needs by offering samples, recipes or another item if the customer is not happy.
Deli done naturally
To much fanfare, Hormel launched its Natural Choice lunchmeat line last year, and expanded its offerings this spring to roast beef, chicken strips, Canadian bacon and uncured bacon.
Longtime natural and organic meat supplier Coleman Natural Foods also entered the deli meat category with All Natural Pre-Sliced Deli Meats to “provide our consumer with a grab-and-go solution for natural and organic meats and poultry,” says Robyn Nick, director of communications and cause marketing, Coleman Natural Foods, based in Golden, Colo. “Today’s busy and taste-conscious consumers are looking for affordable, convenient, and high-quality all-natural meats in their favorite supermarkets.”
Koch’s Turkey Farm, based in Tamaqua, Penn., has also launched an all-natural and organic turkey deli meats line at Whole Foods and other natural retailers.
Meanwhile, it appears that, for the time being, consumers are willing to jump on the all-natural deli meat bandwagon and ride it to what they believe is a healthier lifestyle.
|Top 10 Refrigerated Sliced Lunch Meat Brands*|
|Top Brands||Dollar Sales||Dollar Sales % Chg YAgo||Dollar Share||Unit Sales||Unit Sales % Chg YAgo|
|1. Oscar Mayer||$976,148,400||3.79||30.07||357,377,900||1.04|
|2. Private Label||$506,905,800||0.58||15.62||224,088,300||(4.47)|
|3. Hillshire Farm Deli Select||$324,838,500||12.29||10.01||105,819,400||12.05|
|6. Land O’Frost Premium||$86,454,400||6.74||2.66||22,782,200||8.77|
|7. Healthy Choice||$76,593,550||(9.88)||2.36||27,374,150||(8.96)|
|8. Louis Rich||$71,405,460||(1.74)||2.20||29,616,230||(2.26)|
|10. Foster Farms||$49,486,790||6.38||1.52||16,676,950||3.39|
|*TOTAL U.S. - F/D/MX (supermarkets, drugstores, and mass merchandisers (excluding Wal-Mart)), for the 52 weeks ending July 15, 2007.|
Source: Information Resources Inc.