Food City Launches Healthy Deli Line

ROSEANNE HARPER

ABINGDON, Va. — Food City Stores has launched a new line of private-label deli meats that's expected to give it a healthy edge in its marketplace.

Partnering with supplier Hansel 'n Gretel, makers of the Healthy Deli line, the chain has given the new private-label deli meats a send-off filled with flair. By the end of this week, huge, colorful signs advertising the new products will be suspended above the service delis in 87 of the chain's units spread across Virginia, Tennessee and Kentucky.

Featuring an illustration of an overstuffed sub sandwich, the signs highlight the line's healthy qualities: “Fat 50% lower than USDA requirements, cholesterol 66% lower than USDA requirements, protein 80% above USDA requirements,” the signs read.

Food City officials are quick to point out that it's a combo of quality and taste as well as healthfulness that they're betting on.

“We're communicating to our customer base that we're interested in their health, but this also is a very high-quality product that eats exceptionally well — an A-tier product, I call it,” said Phil Gass, the chain's director of bakery/deli operations.

“That is an important part of it. People want to eat healthy, but they want things to taste good, and these do,” Gass added. “In fact, in blind taste panels conducted by an outside service, these meats stacked up exceptionally well against Boar's Head, Sara Lee, any of the branded products. Hansel 'n Gretel's Healthy Deli won hands down.”

With that data to bolster its efforts, Food City was anxious to get weekend sampling and demos under way immediately in all its delis. The first weekend in August found Food City deli associates offering tastes of turkey, ham and roast beef to anyone who ventured near the deli.

So far, the co-branded, private-label line has been received with enthusiasm.

“It's too early to talk about sales, but customers like it,” Gass told SN. “Particularly noteworthy are the honey ham and honey turkey. It's real Vermont honey they use. Those get exceptionally favorable comments from customers.”

Gass explained that the multifaceted attributes of the new private-label deli line, as well as a previously unfilled void in the marketplace, will make the company's endeavor an almost certain winner.

“I felt there was an unfulfilled niche. Everybody has deli meats and cheeses, but not like these. If the healthy qualities are effectively communicated, coupled with the taste profile, we'll have a winner,” Gass said.

Gass outlined a three-point selling proposition: The quality level has gone up, the taste profile has gone up and retail prices have held the line.

“We couldn't have done this program if we had had to raise the retails of the products,” he said.

“Frankly, in this market, price elasticity is just very, very sensitive.”

Food City's stores are located in blue-collar areas for the most part, where 88% of its customers have a household income that falls below $40,000 a year.

“People want to eat healthy, they want it to taste good, and they also want a value proposition. That's what we're giving them,” Gass said.

And some strategic doings have kept retails down, at $5.99 a pound for everything, except roast beef, which is $6.99.

“We had been getting our private-label deli meats from three different sources — roast beef from one, turkey from another and ham from another. Now, they're all coming from Hansel 'n Gretel. So by consolidating shipments, we've been able to keep our costs down from a freight standpoint.”

Food City has also scrapped products that were previously tagged Food City Premium and has eliminated all its national brands, with the exception of Sara Lee.

“We naturally reset the case, and all the bulk Food City Premium Healthy Deli meats are in first position in traffic flow as customers near the case. They're so close customers can bend over and read the ingredient and nutritional information on the labels,” Gass pointed out.

Colorful product tags and trifolds on top of the cases that extol the new lines' attributes are part of the point-of-sale splash, but come September a full-blown marketing program will get under way.

That will include full-page print ads in the chain's circulars and a constant in-store broadcast of pre-recorded messages over the public address system. Every 30 minutes, shoppers in the store will be reminded that a good-for-them line of deli meats awaits them in the deli, Gass told SN.

Food City delis are already using the new premium-quality meats in their sandwich programs, but attention will be brought to that fact loud and clear as its marketing program gets revved up and the sandwich program gets an upscaling makeover, which is already on the drawing board.

Food City's delis, which traditionally have fallen last in the store's traffic pattern, are being given the first spot on the right, just inside the entrance, in all new stores.

That and the newly crafted partnership with Hansel 'n Gretel, Glendale, N.Y., reflect the fact that 95-unit Food City, whose parent company is K-VA-T Stores, has made bolstering deli traffic and sales a top priority, Gass said.