New Approaches to Key Retail Categories
Top performing categories saw a big shift due to pandemic...
New Approaches to Key Retail Categories
As consumer behavior shifts, retailers must adapt.
In-Store Evolution
How five key retail categories are adapting for a post-pandemic future
How five key retail categories are adapting for a post-pandemic future.
The last year has been a wild ride for the supermarket industry. No part of the business has been untouched by the effects of the pandemic and the radically changed needs of the consumer. For some product categories, that meant record-setting sales spikes; for others, dramatic dips.
Now, retailers are imagining every part of the store for the future. Which trends are here to stay? What will consumers expect this year and beyond? And which businesses are best positioned for a
post-pandemic world?
This special report from Supermarket News offers an in-depth look at how five key product categories have been transformed — and what trends are shaping their futures. Find out how retailers are innovating throughout the store
and driving sales with a focus on convenience, safety and value.
Click the menu at right to explore each of these categories.
Produce
Customer demand for local fresh fruit and vegetables, already high, reaches new levels
Consumers have been moving toward local produce in supermarkets for years, but the COVID-19 pandemic has increased demand as customers are more inclined to help out their local producers in a time of need while feeling better about food safety when produce is coming from suppliers they know.
That has driven more stores to beef up their efforts to offer local produce.
For instance, Big Y Foods will soon open a new 425,000-square-foot Fresh & Local Distribution Center adjacent to the company headquarters in Springfield, Mass., which will allow 70 local farmers to supply the company’s stores in Massachusetts and Connecticut with approximately 1,200 types of produce annually.
Charles D’Amour, president and CEO of Big Y Foods, noted that the facility is an important way for the company to show its continued commitment to local producers and deliver produce to its customers at the peak of freshness.
John Savidan, senior director of produce & floral at Gelson’s Markets, an upscale regional supermarket chain operating in Southern California, noted that the company has had a very strong relationship with local growers since its beginnings in the early 1950s, with many of the original partnerships still intact, and strong as ever.
“Back in the day, it would not be uncommon for a grower to back his pickup truck to the docks and unload its local harvest for the day straight from the fields,” he said. “Although some of this has changed due to rules and regulations, we still deal with the same local farmers from years past and local still plays a major role in our program.”
Steve Carlton, produce category manager of Natural Grocers, a Lakewood, Colo.-based organic grocer, said stocking local produce can change from year to year, and market to market, as challenges can keep the stores from sourcing local organic items.
“Fire and smoke damage, and early freezes are two reasons — especially in our home state of Colorado this year, where local produce yield was lower than usual,” he said. “As with everything else this year, COVID has impacted local produce. We’ve heard from some farms who have not had a large enough harvesting team — the backbone of the produce industry — to completely harvest their farms.”
"As with everything else this year, COVID has impacted local produce. We’ve heard from some farms who have not had a large enough harvesting team — the backbone of the produce industry — to completely harvest their farms.”
- Steve Carlton, produce category manager of Natural Grocers
Chris Dove, vice president of produce category & merchandising for Food Lion, the Salisbury, N.C.-based supermarket chain, said the retailer has increased efforts with local producers during the pandemic, partnering with its local DSD Produce Suppliers to offer produce in 900 of its stores.
“Many of our suppliers operate locally in the communities we serve and it’s important to us that we work with them to help them get through this challenging time,” he said. “Many of our DSD produce suppliers were impacted by the downturn in the foodservice business so this partnership was a win for all.”
Its Local Goodness program began in 2016, and over the years has evolved to include products across all of its stores and in each state within its 10-state footprint.
“Supporting local businesses is an area of importance for Food Lion and our neighbors,” Dove said. “Through our Local Goodness program, our goal was to make it easy to support local businesses by shopping at their neighborhood Food Lion store.”
Jeff Cady, director of produce & floral for Tops Friendly Markets, a regional East Coast supermarket chain with 170 stores in New York, Pennsylvania and Vermont, said the company tries to express the importance of local to consumers as soon as they hit the door.
“We want people to know that we support local and I think most consumers understand the benefit of dealing with not just locally grown products, but locally produced,” he said. “People right now are pleased when they see in-stock conditions, so I’m not sure COVID has helped increase demand, but with all things being equal, our customers are usually more attracted to local items.”
“We want people to know that we support local and I think most consumers understand the benefit of dealing with not just locally grown products, but locally produced,”
- Jeff Cady, director of produce & floral for Tops Friendly Markets
Highlighting Local Growers
Natural Grocers works hard to ensure its produce section remains 100% organic and local takes precedence, so it works with local growers whenever and wherever it can and makes sure to showcase that message in its marketing efforts.
“We promote our local produce through weekly ads and {N}power, Natural Grocers’ free loyalty program,” Carlton said. “Throughout the year, we offer special sales on produce through {N}power, such as Organic Harvest Month in September and Resolution Reset in January.”
Since Gelson’s Markets’ stores are located so close to major produce-growing regions like San Diego, Carlsbad, Fresno and Orange County, it does some local bug callouts on signage and in mailers. Still, Savidan notes that customers can tell when fresh produce items are at their peak and can distinguish local items themselves nowadays.
At Tops Markets, local produce is also heavily promoted.
“We always have signs near our items that are locally grown and we speak to it in our print ads and digital ads,” Cady said. “We run an annual ad about our efforts with local produce and other fresh items.”
Before COVID-19, the store regularly brought local farmers in for tastings to introduce them to customers, and Cady is looking forward to when protocols allow for that to happen again.
At this time in our lives, Cady sees the power of neighbors helping neighbors, and that’s a philosophy that the store subscribes to, and one that many customers believe in as well. That has upped the demand for local as well.
“But it’s not just because consumers are demanding it. Now we are all aware that if we can take miles out of the supply chain by getting products locally, we all know it’s better for the environment,” he said. “In consumers’ minds, they feel better about it and we feel better about it.”
Bakery
Supermarkets offer product and packaging innovation to draw shoppers to the fresh bakery department
The onslaught of COVID-19 brought with it confusion and fear in the supermarket, and fresh bakery departments were among the hardest hit sections of the grocery store, with people afraid to purchase anything that others could come in contact with.
Andrew Moberly, director, category solutions at Daymon, a leading private brand consultant, notes the bakery department across grocery was immediately impacted by the pandemic.
“In the short-term, sales of fresh bakery items dropped considerably as shoppers pivoted to purchasing longer shelf-life items and focused on buying staples versus indulgence, while retailers determined the safest way to offer fresh grab-and-go bakery items,” he said. “Overall sales were down 3.% year-over-year.”
But since last summer and fall, retailers have ramped up safety and protective measures throughout their bakeries and are working to entice customers back.
“People didn’t leave bakery, they just shopped differently,” she said. “Initially, we pulled back on self-serve items like single-serve donuts, pastries and bagels, but we saw an extremely positive switch on prepackaged six-counts of bagels and muffins.”
- Karri Zwirlein, director of bakery, deli, and prepared foods for Tops Friendly Markets
Karri Zwirlein, director of bakery, deli, and prepared foods for Tops Friendly Markets, a regional East Coast supermarket chain with 170 stores in New York, Pennsylvania and Vermont, noted that while the retailer’s bakery department was impacted by COVID-19, it still saw sales growth overall in 2020.
“People didn’t leave bakery, they just shopped differently,” she said. “Initially, we pulled back on self-serve items like single-serve donuts, pastries and bagels, but we saw an extremely positive switch on prepackaged six-counts of bagels and muffins.”
These were still freshly baked each day, just packaged in a way that made customers feel comfortable about buying the items. Single-serve items returned by summer’s end because customers were asking for them.
“We still offered a choice, so those who weren’t comfortable could still buy the prepackaged,” Zwirlein said. “We saw very little feedback that was negative and people seemed to like buying something the way they used to and return to somewhat normal.”
Throughout the pandemic, dedicated staff at all Tops stores were charged with cleaning any and all high-touch points in the bakery department, and the stores offer plenty of disposable gloves and wipes for customers to use if they want to wipe something down before grabbing it and adding to their shopping cart.
“We have done very little marketing specific to bakery, but it’s part of our overall message to consumers alerting them as to what we’re doing to keep the store clean and safe for everyone,” Zwirlein said. “We do have signage up in the department letting people know we are cleaning throughout the day and what we have available for everyone’s peace of mind.”
Scott Fox, bakery director for Dorothy Lane Market, a gourmet chain based out of Dayton, Ohio, noted that early in the pandemic, bakery dropped off drastically — especially decorated cakes — but it was very short-lived and by Mother’s Day, the core bakery division was flourishing.
Safety measures in the bakery department included masks worn by all staff, constant cleaning and removing product merchandised on top of cases. In addition, not only were the self-serve bagel and muffin stations shut down, but the store is not planning to bring them back and will institute refrigerated grab-and-go packaged items early in 2021.
Chris Mentzer, director of operations for Rastelli Market Fresh, a small independent gourmet market with locations in Marlton and Deptford, N.J., said the stores had to make many changes within its bakery departments to assure safety for customers, as well as a sense of trust about the products that they are purchasing.
“The days of bulk rolls and bagels are no longer available. All rolls, breads and bagels are now packaged in bags and individually wrapped to meet high standards of safety and sanitation,” he said. “It takes more labor, but our focus is keeping guests feeling good and safe about their purchases.”
“We have also brought in a whole line of smaller cakes and pies that feed two to four people instead of the larger cakes that feed eight to 10. This has been a huge success with the smaller gatherings at home.”
- Chris Mentzer, director of operations for Rastelli Market Fresh
Rastelli Market Fresh has also brought in more packaged products for the bakery, which it didn’t previously carry.
“Items that are packaged from the manufacturer including cakes, cheesecakes, donuts, pound cakes and individually wrapped pastries seem to offer some peace of mind for those that are very hesitant to purchase freshly made service products,” Mentzer said. “We have also brought in a whole line of smaller cakes and pies that feed two to four people instead of the larger cakes that feed eight to 10. This has been a huge success with the smaller gatherings at home.”
Uncle Giuseppe’s Marketplace, with nine stores in New York and New Jersey, has implemented crowd-control devices in its bakery department, installing new technology where a text can be sent to someone when it’s their time to order.
Taking the Cake
One area that Dorothy Lane Market struggled with was fresh-baked cake sales.
“Early in December we struggled with our corporate business and our bakery party trays,” Fox said. “We did send out a coupon around Dec. 15 to try and get that business back but other than that, we just stuck to our normal marketing for the bakery department.”
For safety precautions, some retailers have discontinued day-of customization of decorated cakes in-store and have moved to a pre-order option for customized decorated cakes.
According to Daymon proprietary data, specialty cake sales increased during the pandemic as consumers craved comfort foods or items that heighten nostalgia. Dessert cakes (32.7%) and decorated cakes (21.9%) made up 54% of all dessert and sweet-goods purchases from the in-store bakery in 2020
A Packaging Transformation
In December, global food supplier Rich Products asked consumers about their preferences for products in self-service bakery cases and 55% of consumers responded that they prefer to see all fresh-baked goods and donuts packaged.
Jen VanDewater, vice president, health, authenticity and strategic insights for the Buffalo, N.Y.-based company, notes on-shelf claims like “fresh” and “baked today” resonate even when products are prepackaged.
In the survey, 66% of shoppers shared that it’s very important to see the items through packaging, while 52% are looking for packaging that adds shelf life as a quality cue.
According to Moberly of Daymon, retailers — who had been working hard to prioritize sustainability by using less packaging or eco-friendly options — had to quickly pivot to provide prepackaged fresh bakery goods.
“This brought back plastic packaging as items such as donuts and croissants, which were previously grab-and-go, are now paired into prepackaged items,” he said.
The most noticeable change for consumers in the bakery department is that fresh items are now prepackaged for grab-and-go. Whereas previously a consumer could choose what type of donuts or pastry they wanted, now items are paired together and prepackaged for safety.
“While this eliminates the consumer’s choice of donut or croissant flavors they may have wanted to pair together, it provides safety to the shopper and to employees who don’t have to engage at the counter with shoppers,” Moberly said.
“While this eliminates the consumer’s choice of donut or croissant flavors they may have wanted to pair together, it provides safety to the shopper and to employees who don’t have to engage at the counter with shoppers."
- Andrew Moberly, director, category solutions at Daymon
Meat
Value-added options, new meal opportunities and filling the need for comfort foods can help retailers maintain strong meat sales
More digital engagement with customers as well as value-added options, new meal opportunities and filling the need for comfort foods can help retailers and the meat industry maintain the strong sales they’ve experienced in the category over the past year, said speakers during a Meat Conference session last week.
Value-Added Options
“Supporting meal planning and solutions is going to be huge for our consumers as they start to go back to work,” said John Beretta, group vice president, meat & seafood at Albertsons Cos., the operator of more than 2,200 supermarkets. “They have less time preparing meals. So value-add and really value-add innovation is going to be very important for us to bring in this post-COVID economy.” He added that premiumization in the meat category will also help keep customers buying different cuts and types of meat going forward.
Beretta noted that the economy will continue to be a factor in meat sales this year. “We're going to have to watch the economy closely, along with the customer behavior. Because as we look at the fuel costs going up and commodity costs, I'm sure we can bring value to the customer. That'll be really important to us, especially over this first half of the year. Things that are staples like ground beef and chicken, ensuring that we're bringing value to the customer at shelf.”
It’s an exciting time for the meat industry, said Lisa Selk, vice president marketing, meat products at Hormel Foods. “As I think about general change in the industry and in consumer and shopper behavior sets, that's always where you really find innovation. And new engagements with shoppers and consumers. So it’s super exciting from that standpoint,” she said.
“The first consideration is really looking internally though, as we think about how we operate as a business. We really do need to create that vision for where we want to take the business to have solutions for those consumers and shoppers. If it's uncertain, we definitely need understanding. This is all about empathy for our constituents.”
“Thinking about foods in general, we have people eating for comfort,” Selk continued. “And people eating for health. And both as well. But I think one point is the comfort food position this past year, if you just look at how much bacon was consumed in this past year, comfort was definitely one of those things consumers have been looking for. And so moving forward, how do we fulfill emotional and the physical needs of consumers and shoppers with our solutions?”
Digital & Online Engagement
Selk and Beretta both agreed that the retail meat industry is seeing permanent customer behavior shifts.
“As we went through this past year, people were probably forced into new behaviors by being kind of locked in their homes for a while,” said Selk. “I think when you have that longevity of behavior change, it's going to stick.”
One way of reaching those consumers is through increased digital engagement. “Digital mediums have been really inspiring,” she said. “Giving people new ideas for recipes and recipe videos are inspiring a whole new generation of younger cooks. They’re trying it out.”
"Digital mediums have been really inspiring. Giving people new ideas for recipes and recipe videos are inspiring a whole new generation of younger cooks. They’re trying it out."
- Lisa Selk, vice president marketing, meat products at Hormel Foods
In addition, there has been a huge shift to online shopping, including for fresh meat, which prior to the pandemic was a more challenged online category. “Some people were resisting it before,” noted Selk. But during COVID, they were probably forced to try it out and then found the value budgeting, time-savings, those sorts of benefits. So I think it's around for a while.”
Trends in Meal Prep
Innovations in meal prep that many consumers discovered during the pandemic are also here to stay. “The air fryer, the pressure cookers, everything that's speeding up that scratch cooking in the home, I think is definitely here to stay,” she said. “And I think there's also a role for this sous chef, the hyper premiumization, the restaurant-quality sort of experience at home. There’s a lot of innovation opportunities for us to deliver.”
On the retail side, Albertsons’ Beretta shared his observations. “What we've seen a lot of and talked about, social and digital and of course e-commerce consumers are gravitating towards that for their shopping behavior. Recipe hunting is big. So they're utilizing that within their pre-shops. It’s important for us as a retailer to bring that to life with our platforms where we can, both online, but even when they're in-store and giving them those ideas and suggestions. There's a lot less frequency of shopping but there's bigger baskets. So that shopping list is even more important than it ever was before.”
Frozen Meat
“The pandemic also taught the customer that frozen meat and products can be part of a great end-of-week meal or backup meal that's there in the freezer for them. They're all great quality. They're convenient. And they're great to have on hand,” he said. “So I'd say that that category is ripe for innovation as we go forward.”
Beretta also said that as breakfast and lunch has moved to inside the home, there is a great opportunity for retailers and meat producers. “If we've got that consumer that's at home and not going back to work, we've got that captured audience,” he said. “So being very creative with lunch offerings is going to be big for us.”
"The pandemic also taught the customer that frozen meat and products can be part of a great end-of-week meal or backup meal that's there in the freezer for them. They're all great quality... And they're great to have on hand. So I'd say that that category is ripe for innovation as we go forward."
John Beretta, group vice president, meat & seafood at Albertsons Cos.
The Convenience Factor
Meal solutions will continue to be important as consumers emerge from the pandemic. Grocery chains, including Albertsons, are exploring new ways to provide family meals in-store or for pickup or delivery.
Of course, convenience as always continues to be key, said Selk, “especially as we establish what that new normal looks like. It may not be that we all go back to the offices, but maybe our kids’ schedules get going again. So convenience is going to be super key. I think we can accomplish that at retail by providing semi-prepared meals. Think about the sous chef idea where it's maybe not completely from scratch but it's partially put together. So you can get that meal on the table faster.”
“Giving that consumer that offering that they can put in that fridge so they know it's there but they may have to do a little something to it,” said Beretta. “They maybe have to add the salt and pepper. They may have to cut up the salad to go with it on the side. But it’s that protein that we can bring to a value whether it's in a packaging that can go right in the oven or it's packaging that can go right in the microwave. But for consumers, knowing that it's there for them and just being that one step closer to getting it to the table is key.”
"It may not be that we all go back to the offices, but maybe our kids’ schedules get going again. So convenience is going to be super key. I think we can accomplish that at retail by providing semi-prepared meals. Think about the sous chef idea where it's maybe not completely from scratch but it's partially put together. So you can get that meal on the table faster."
- Lisa Selk, vice president marketing, meat products at Hormel Foods
Deli
Supermarkets are capitalizing on demand for sliced meats during COVID, but fresh-made sandwiches are taking a hit
While prepared foods at the deli counter have struggled during COVID, sales of deli meats have been off the charts thanks in large part to more lunch occasions at home.
In fact, the latest stats from IRI, examining sales through the end of October, revealed the overall category for sliced meats is seeing huge increases over last year’s numbers.
“That can be attributed to the fact that for the most part, people are working from home, and being at home the majority of time, so these products are used more often for lunch meals, and maybe even dinner meals,” said Eric Richard, education coordinator of the International Dairy Deli Bakery Association (IDDBA). “What’s continued to drive a lot of these sales are the grab-and-go pre-sliced options within the deli.”
Even before the pandemic, supermarkets offered the pre-sliced and packaged options, but it was a very small part of total sales. However, Richard notes the amount of people looking for these now has boomed, and that is a big reason for the higher numbers.
“A lot of people don’t want to stand around the counter and wait in line among other customers, so they can easily just grab what they want and get out of the store quicker,” he said. “That’s important during these times.”
"What’s continued to drive a lot of these sales are the grab-and-go pre-sliced options within the deli. A lot of people don’t want to stand around the counter and wait in line among other customers, so they can easily just grab what they want and get out of the store quicker."
- Eric Richard, education coordinator of the International Dairy Deli Bakery Association (IDDBA)
Strong Numbers
Karri Zwirlein, director of bakery, deli & prepared foods for Tops Friendly Markets, a Williamsville, N.Y.-based regional supermarket chain with 170 stores in New York, Pennsylvania and Vermont, noted that sliced deli meats and cheeses have been trending up on average 30% year-over-year since the beginning of the pandemic.
“All subcategories are doing well, however bologna was very strong all throughout the pandemic,” she said. “Kids being home and not at school for six months is really what drove this then. With some kids back in school, more are bringing their lunches instead of buying. Adults are also bringing their lunch more now that some are back to work as some are apprehensive of restaurant takeout or dining out.”
Jason Lachawiec, category manager, specialty deli & service deli for Stop & Shop, a 415-chain of supermarkets located in the northeastern United States, noted that when the pandemic hit, the stores temporarily closed the deli counter service to help both customers and associates practice safe social distancing.
“During this time, we did see customers purchase more sliced meats and cheeses via our Grab and Go program,” he said. “With people working from home and not going out for lunch in the office, more customers are taking advantage of our delis for simple at-home meal solutions.”
Stop & Shop has also added the Boar’s Head Fresh Slice program to most of its stores, which allows customers to buy freshly sliced Boar’s Head products in prepackaged form for greater convenience.
“In our newly remodeled stores, we have expanded our fresh-sliced Grab and Go options to show larger offerings of our private brands and other national brands,” Lachawiec said. “After the deli counter reopened, we have seen customers return to this service over the last few months.”
Additionally, Stop & Shop has launched a new Deli Order Ahead app, where customers can place orders on their phone to be picked up during their shopping trip when it’s convenient for them. This has quickly become a popular way for people to buy their deli meats and has helped the category grow.
Sub Sales Subpar
As for prepared sandwiches sold in the supermarket deli, IRI data show sales are down 10% percent from a year ago. Richard attributes this to the fact that people would rather make their own sandwiches at home, and no longer need freshly-made sandwiches to take to the office with them.
“It’s certainly changed the dynamic of the shopping and eating patterns of consumers since March,” he said. “The premade or prepacked offerings have helped. You still have some impulse purchases, but not to the same degree of where they were pre-pandemic.”
He added, however, that supermarkets that have historically had a robust sandwich program — such as Wegmans or Publix — could tap into more sales by highlighting that within their e-commerce platform.
“If there’s a real nice deli prepared sandwich push on their website, these stores might be able to generate additional sales from those individuals who are predominantly shopping by that e-commerce platform,” Richard said.
Zwirlein said Tops Markets’ sandwich category has been struggling versus last year, likely because of many businesses still having people work from home, negatively affecting the lunch business, but it’s working on marketing the offerings to improve the numbers.
Riding the Wave
With vaccines just announced and on the horizon, things may get close to normal again sometime in 2021. When that happens, supermarkets need to think about how to continue to find success with their sliced deli meat programs.
“For those people who in the past didn’t purchase as much from the in-store deli, but are now, hopefully they will continue to buy because they may have become more accustomed to eating deli meats and cheeses and making sandwiches themselves,” Richard said. “The stores need to continue to focus on making sure they are available no matter the channel, whether it’s in-store shopping or the e-commerce platform.”
Additionally, he said stores should market by focusing on different varieties and flavors, and educating consumers about different types of sliced meat products.
Topps Markets has been expanding its Grab & Go sections of store-sliced meats — usually between half and three-quarter pounds of deli meat or cheese that are fresh sliced every day in the stores. Automatic slicers and stackers have been added to high-volume stores to help with production, which helps associates be more efficient and ensures fresh, full cases all day.
“These items are located near the full-service deli to attract customers to this convenient, time-saving option,” Zwirlein said. “I believe Grab & Go will continue to be a destination for our customers even after the pandemic. We continue to re-allocate space for this high-performing category as well as invest in equipment to help make it more operationally friendly.”
Frozen Foods
More focus on breakfast and better-for-you in the freezer case can help stem the tide of year-to-year sales drops
When it came to stocking up on grocery items during the pandemic, frozen foods were hot. The question is, how much of the sales gains that supermarkets achieved in 2020 will melt away in 2021?
With many restaurants closed or operating at limited capacity, and amid a broad shift toward working from home and remote schooling, sales of frozen breakfast items, family meals, snacks, appetizers and desserts soared in 2020.
“At Giant Eagle, we’ve noted increased guest interest throughout the frozen food category, especially in family breakfast and dinner items,” said Jannah Jablonowski, a spokesperson for the Pittsburgh-based chain. “Frozen pancakes, waffles and breakfast sandwiches have been particularly popular, as have pizza offerings and other multi-serve dinner entrées.”
“Frozen pancakes, waffles and breakfast sandwiches have been particularly popular, as have pizza offerings and other multi-serve dinner entrées.”
- Jannah Jablonowski, Giant Eagle spokesperson
Across the industry, dollar sales of frozen foods grew 21% in 2020, driven by increases in the number of frozen food trips and spending per trip — resulting in a 19.4% increase in spending per buyer, according to the Power of Frozen in Retail report from the American Frozen Food Institute and FMI. The report also found that 57% of consumers continue to purchase more frozen foods than they did before the pandemic. Dollar sales rose in double digits across nearly all major categories, including gains of 30% and higher in frozen seafood and processed poultry.
Loan Heilner, associate category merchant for frozen, baby and pet categories at New York-based e-commerce retailer FreshDirect, said sales of frozen foods have remained “significantly elevated” long after the early surge in stock-up buying last spring.
Frozen breakfast items including croissants, bagels, pancakes, waffles, breakfast sausages and heat-and-eat breakfast meals and sandwiches have all been popular, she said, as homebound consumers replace their morning out-of-home breakfast stops with items from their own freezers.
Additionally, FreshDirect has also seen large sales gains in frozen fruit and vegetables, snacks, and appetizers, pizza and pasta as customers searched for longer shelf-life items to store at home. Sales of frozen pasta dishes, for example, were up 82% in 2020 at FreshDirect, Heilner said.
She said the “cooking fatigue” induced by the pandemic has helped drive more meal solutions and prepared foods in the frozen-foods category. The company has also begun to see an increase in demand from its corporate customers for individual frozen meals, including breakfast and lunch options, as workplaces have reopened.
Giant Eagle’s Jablonowski said the chain is preparing for consumers to gradually drift back toward their former restaurant-dining routines.
“Understanding that this anticipated shift will result in fewer meals prepared at home, we are working to fine-tune our selection of restaurant-quality dinner options to offer Giant Eagle guests elevated food experiences at an excellent value,” she said.
Better-For-You Here to Stay
Although shoppers splurged on frozen treats in 2020, the pre-pandemic trends around better-for-you items and plant-based foods have not gone away, said FreshDirect’s Heilner.
“As customer behaviors normalized, we have seen a return to the focus on wellness and better-for-you items stronger than ever,” she said. “Customers with families to feed are especially looking for cleaner meal solutions and snacks to feed their children.”
“As customer behaviors normalized, we have seen a return to the focus on wellness and better-for-you items stronger than ever. Customers with families to feed are especially looking for cleaner meal solutions and snacks to feed their children.”
- Loan Heilner, associate category merchant for frozen, baby and pet categories at FreshDirect
Heilner noted that frozen plant-based meat alternatives had already been gaining traction before the pandemic.
“This is a category we expect to continue to grow as consumers seek out sustainable, plant-based proteins, and especially within frozen, where there is an ever-increasing selection of innovative brands,” Heilner said.
Other better-for-you frozen categories ripe for growth include foods that boost immunity, such as bone broths and fruits and vegetables, she said.
Anne-Marie Roerink, principal and founder of 210 Analytics, which compiled the Power of Frozen report, agreed that broad consumer interest in health and wellness will continue to drive sales of frozen foods. This is evidenced by the increasing amount of front-of-pack claims on frozen products and the strong sales growth of items such as seafood, fruits and vegetables.
“These items can be the jumping-off point for even more shoppers to start exploring other items in the frozen food aisle,” she said.
Other frozen-food trends Roerink sees propelling the category include above-average growth through e-commerce, and the cost efficiency of frozen foods amid an economic downturn.
She predicts that frozen foods could be one of the few supermarket departments that will come close to retaining the sales gains of last year.
“Success in frozen foods lies in its wide variety and getting people to shop across a greater number of categories,” she said, citing opportunities for cross-merchandising similar to the tactics used in fresh departments. “People may simply not be aware of the great variety in frozen plant-based meat, poultry and seafood, for instance. Or the ever-growing availability of breakfast sandwiches that just require reheating. Or the innovations that are specifically geared toward instant pot kits and air fryers.”
Another key to driving sales in the department is encouraging consumers to include frozen on their weekly shopping lists, rather than thinking of it as a backup solution.
“Having suggestions for the meal lineup that mix fresh and frozen can be a great way to capture more meal occasions overall,” Roerink said.
Celebrate with Frozen Treats
The supermarket freezer case proved to be a source not only for practical meal solutions during the pandemic, but it also provided a ready supply of sweets and baked goods for consumers seeking to elevate their mood or celebrate special occasions.
“As consumers have celebrated special events and holidays with smaller gatherings, we have seen increased interest in frozen novelties as well as pies and other desserts,” said Jannah Jablonowski, a spokeswoman for Giant Eagle.
Anne-Marie Roerink, principal and founder of 210 Analytics, which compiled the 2021 Power of Frozen report, said consumers appeared to shop the freezer case before the holidays to stock up on items that they might otherwise have bought in the bakery, such as rolls and pies.
“We actually saw the week before the holiday week being the biggest one, as people tried to avoid big crowds and shop early,” she said, predicting that trend will not last as consumers return to their pre-pandemic patterns.
At New York-based FreshDirect, the e-commerce retailer said sales of ice cream and novelties were up 78% in 2020, outpacing growth in the frozen category overall.
“Novelty items offer people something unique and special,” said Loan Heilner, associate category merchant for frozen, baby and pet categories at FreshDirect. “They’re just really fun products that bring small moments of joy to a customer’s day.”
“Novelty items offer people something unique and special. They’re just really fun products that bring small moments of joy to a customer’s day.”
- Loan Heilner, associate category merchant for frozen, baby and pet categories at FreshDirect
She cited as an example the Not Fried Chicken frozen novelty from Life Raft Treats, which recently launched at FreshDirect. The ice cream bar, made to look like a fried chicken drumstick, features a waffle-flavored ice cream center, with a chocolate-covered cookie piece as the bone, caramelized white chocolate on the outside and is topped with crushed corn flakes.
“This kind of daily joy is what we’re hoping to give customers every time they shop with FreshDirect,” Heilner said.
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