PORT WASHINGTON, N.Y. — Supermarkets' prepared foods programs are set to grow, driven by consumers' changing eating habits, NPD Group officials said.
The consumer research group has just released its 23rd Annual Report on Eating Patterns in America, which shows consumers want their mealtimes made easier, and at the same time they want to trim their food budgets. And, just as important, they don't want to start cooking again.
“Consumers want to moderate their food costs, but without doing more cooking at home, and supermarkets are in the best position to help them do that,” NPD vice president Harry Balzer told SN.
“What's happening in supermarkets gives you a glimpse at the future of eating in this country. In fact, supermarkets are one of the few places offering takeout, prepared meals for eating at home that is still expanding [its sales].”
The NPD Group's ongoing research shows supermarkets' prepared foods sales growing each year for the past five years.
“The share is still small, at 6.3%, but it's on a consistent growth pattern,” Balzer said.
Since 2003, when supermarkets' share of the takeout supper market stood at 5%, that share has expanded a little each year. Much of the growth could be attributed to the fact that more supermarkets have added ready-to-eat and ready-to-heat food programs, and/or have expanded them, adding variety, Balzer explained.
“But that [growth pattern] indicates a structural change. We don't follow fads. We're looking at 30 years of eating behavior, the changes that have occurred over time,” Balzer said.
Indeed, the NPD Group draws from more than 40 databases it has established over the years, and which it keeps up to date — in fact, up to the minute.
Balzer stressed that NPD has its finger on the pulse of what people are really doing on a daily basis.
“We have 5,000 people who write down everything they eat — and where they eat it — for 14 consecutive days, for instance. That's ongoing, and it's just one way we track what's going on. We also contact 4,200 people every day — every day — online and ask them if they have had a meal not prepared at home.”
Various research sources have said that people are not eating out in restaurants as much as they were, but Balzer said NPD has found the number of visits to restaurants has not gone down in the last year.
“Consumers are just using restaurants differently. While fewer dinners are being eaten on-site at restaurants, more people are eating breakfast at a restaurant.”
Takeout from restaurants, too, has grown.
Rising food prices will not send people back to their kitchen stoves, Balzer said. Instead, they'll find other ways to save money.
“There will be no recession in eating, but there will be winners and losers [among food providers]. The winners will make mealtimes easier for consumers while still being considerate of their budgets.”
Underscoring the “easier” part of his comment, Balzer said that while retailers are in a good position to be winners, they must do more than just offer prepared food to take home to eat.
“Drive-up would be ideal. If anyone can keep me from getting out of my car, they win.”
Significantly, the NPD's current report shows that fast food now accounts for 77% of all restaurant meals eaten. That's a new high, perhaps resulting from the ease of drive-up windows and a low price point.
Conceding that for many supermarkets, a drive-up window might not be possible, Balzer told SN there are other ways to make things easier for the meal-seeking customer. He said putting products together into a meal and pricing by the meal, rather than by the pound, could boost sales by creating convenience.
“The world is moving toward packaged meals, not packaged food,” he said.
Making takeout menus easily available, too, and encouraging customers to call in or fax in orders would go a long way toward making mealtimes easier for customers, he said. Packaging that makes serving and cleanup easy would help as well, Balzer added.
A consultant who has been monitoring the supermarket meals business for years agreed that the time is right for supermarkets to whip up their meal solutions efforts.
“This is an ideal time for supermarkets to position themselves against restaurants by being a higher-value alternative,” said Neil Stern, senior partner at McMillan Doolittle, a Chicago-based retail consulting firm. “While they can't win on convenience [drive-throughs will always be impractical] they can, at least, use dedicated registers.”
Stern also pointed out that today's busy consumer is looking to buy a meal, rather than a bunch of components. Putting things together for the customer would provide convenience, he said.
“Mostly, supermarkets need to redefine convenience by doing a better job of bundling solutions together — what makes a whole meal, how much does it cost, and how easy is it to assemble?” Stern said.
“Rather than selling a rotisserie chicken, how do you sell a meal — entree, sides, bread, dessert and beverage? That increases the ring as well consumer convenience.”
|6. RTE Cereal||70%|
|10. Carbonated Soft Drinks||59%|
|Percentages reflect the number of individuals consuming products in each category at least once every two weeks. |
SOURCE: The NPD Group's National Eating Trends Service
Percentage of shoppers who consume vegetables at home at least once every two weeks.
Source: The NPD Group's National Eating Trends Service