It was a challenging year for fresh foods departments.
Five big stories of the last year, selected from among many, were food safety, nutrition labeling, implementation of standardized codes for bulk produce, the increased interest in case-ready meat and the takeoff of rotisserie chicken in the deli.
In general, this year there were pressures from without to not only interpret, but to implement, the new federally mandated nutrition labels, and to have in place safe-handling labels on meat.
There also were pressures to cope with customer concerns about the fruits of biotechnology, namely
genetically engineered tomatoes and milk from cows treated with the newly approved growth hormone BST.
Supplies of seafood were tight, while meat was more plentiful than it's been in years. For the first time, the beef industry adopted grocery tactics and pushed for use of coupons.
From within, there were pressures to make the service-oriented, labor-intensive perishables departments more efficient without sacrificing quality. Staffing also was a big headache, whether it was finding workers, keeping them, or training them. It's a problem that promises to be a major challenge in the year ahead, retailers said time and time again in the past few months.
In terms of competition, the specter of the big bad warehouse club and big bad supercenter wasn't the scariest; it was the retailer down the street.
As one deli-bakery executive said: "I used to think you had to be sharp. Now you have to be tough and sharper. Everything I do I think how can I do it with less labor. And you've still got to look like you have service and theater."
But 1994 wasn't all food for headaches.
Some categories showed exciting and in some cases double-digit growth. They include European-style breads; value-added produce, especially salad mixes, and rotisserie chicken and deli meals. What bound these all together was shoppers' seemingly unquenchable thirst for convenience items that represent a value.
Strains on Food Safety
Like last year, there was very bad news on the food safety front: The deadly strain of the naturally occurring bacteria E. coli 0157:H7 continued to elude easy elimination.
Just last month, new cases of food-borne illness related to E. coli were reported in Washington state and California and were linked to an apparently new source: dry-cured salami. Until the salami indicident, reports of illness were related mostly to ground beef, the most notorious of which were in January 1993 with the fatal outbreak in the Pacific Northwest that put the issue on the map.
The year also ended with a ruling in U.S. District Court in Austin, Texas, upholding the government's right to conduct random tests of ground beef in supermarkets for the presence of E. coli 0157:H7.
The testing program began in October, with no reports of contamination apparently detected from the random tests by USDA inspectors. However, testing done under a Florida state program revealed the presence of the bacteria from a sample of ground beef from a single-unit independent in Lakeland, Fla.
That prompted the recall of meat from the same lot from Wal-Mart stores in Arkansas and Texas and units of Oakland,
Calif.-based Safeway in Denver.
Also on the food safety front, the Food and Drug Administration weighed in at the beginning of the year with its revised Food Code, which sets new standards for sanitation. The agency also proposed a Hazard Analysis Critical Control Point program, or HACCP program, for the seafood industry, which could, if enacted, include mandates for retail food service operations.
A New Code For Produce
In the quest for efficiencies, there seemed to be a lot of action, or at least a lot of willingness to consider taking action.
Perhaps the brightest spot on that front was the adoption by some of the largest chains in the country of standardized price look-up codes, known as PLUs, for tracking bulk produce sales.
Not all companies are eager to sign on for a standardized coding system, but many industry members see it as inevitable once the considerable kinks are worked out for buyers and their suppliers.
This year, suppliers said at industry meetings that they suddenly have to have huge inventories of labels to satisfy the often conflicting needs of their retail accounts. Some big chains insist their produce bear the standardized four-digit numbers, while some other big players refuse to accept the very same shipments. Couple that with different coding requirements for the increasingly important export market, and there are problems.
But the benefits promise to be great: more accurate rings at the front end, allowing cashiers to charge the proper amount for a bulk item, and much improved tracking of sales.
Applying Labels In Bakery
In bakery, retailers worked to figure out which items to label with nutritional information according to the mandate of the Nutrition Labeling and Education Act of 1990. The law went into effect May 8. Playing a big hand in trying to help solve the puzzle -- which even the officials at FDA admitted had missing pieces -- was the Retail Bakers of America and its devoted student of labeling, Peter Houstle, the trade group's executive vice president.
"There are a lot of issues that need to be resolved," Houstle told SN earlier this month. He said there are still questions about which bakery products need to have nutrition labels and which do not, such as items that are treated with an egg wash before they are baked at store level.
Despite fears that the law would have a negative impact on deli and bakery sales because the labels spell out the fat content of a product in black and white, Houstle said the labels have, anecdotally at least, been "something of a nonevent."
To track the impact of the law on sales and operations, Houstle said RBA is about to launch a retailer survey, the results of which will be unveiled at the group's next convention, which is slated for March 11 to 13.
Solid Turns For Rotisserie Chicken
In the deli and food-service area this year, retailers continued to tinker with prepared food and new formats to show it off. Some put in food courts while others took them out. A strategy in prepared foods seemed to be for retailers to limit their assortments to give big play to a handful of items. And here is where chicken came out the winner.
"Whether it is because of the health or the versatility of chicken, we have not ceased to find ways it can sell," said retail deli/food-service consultant Howard Solganik, president of Solganik & Associates, Dayton, Ohio.
"Some of it may be related to the fact that chicken is a great value," he said. "The combination of health and value is what's making it so strong." Chicken has also helped fuel the merchandising of meals in the deli, where add-ons such as rolls, side dishes and desserts can significantly add to the bottom line.
Case-Ready Meat Makes Its Case
The prepackaged fresh meat movement picked up momentum this year as distibution of case-ready pork widened, and some retailers showed willingness to experiment with case-ready beef.
Nash Finch Co., Minneapolis, announced that in 1995 it would create a test meat department fully supplied with case-ready meats.
The case-ready concept -- in which fresh meats are prepackaged by the processor and delivered ready for placement in the retail case -- is gaining attention because it reduces in-store labor.
But issues of product quality and color persist. And some retailers fear the adoption of case-ready will homogenize meat departments and create price wars. It also poses a threat to back-room meatcutters.