How Grocers Can Be the ‘Ultimate Mealtime Solution’

As consumers indicate they will continue to cook meals at home—even as restaurants reopen—“grocers are positioned to be the ultimate mealtime solution,” Rick Stein of FMI–The Food Industry Association said in the foreword of its 2021 Power of Foodservice at Retail report.

The report, which is based on a shopper survey of 1,518 U.S. shoppers and is overlaid by point-of-sale and panel data provided by NielsenIQ, offers an overview of shoppers’ perceptions and behaviors regarding prepared foods in grocery, a category that saw deep declines in the spring and summer as hot and cold bars shuttered due to COVID.

But as these services return to pre-pandemic operation levels—and through the offering of pre-packaged solutions—the retail foodservice has seen some growth. Reaching $25.5 billion, total foodservice, including beverages, increased 0.4% vs. a year ago for the 52 weeks ending May 22, 2021, according to data insights firm NielsenIQ. Unit sales, however, have not recovered, and are down 0.4%.

But with 59% of Americans indicating they will cook as many meals at home as they do now and 39% viewing retail foodservice as a substitute for both a home-cooked meal and a restaurant meal, according to the report, grocers have the opportunity to “increase their significance as a destination for health, well-being and meal solutions,” said Stein, VP of fresh for FMI. Part of that, he said, entails finding the right formula that caters to the customer with supportive technology.

One of the themes to emerge from the 2021 Power of Foodservice at Retail report is shoppers’ desire for hybrid meal options, or those that are a mix of semi- and fully prepared items. At 55% of shoppers—across all ages, incomes, ethnicities and areas—this is the most common way of dinner preparation. Additionally, 64% of consumers incorporate time-saving solutions, such as bagged salads, heat-and-eat mashed potatoes or ready-to-eat meat, in their typical meal preparation.

FMI noted that consumers who are more likely to solely rely on semi- and fully prepared items are more likely to be one-person households, pointing to the importance of portion size variety and/or customization, especially as it comes to pre-packaged offerings. “As these shoppers are more spontaneous in their dinner planning, top-of-mind awareness is key to capturing their business,” the association said in the report.

Pre-packaged offerings continue to instill the highest levels of confidence safety confidence with consumers, with 61% saying they are “somewhat” or “very” confident in in the precautions taken for pre-packaged foods vs. that of employee-served foods (55%) and self-serve foods (48%).

Other pre-packaged insights from the report include:

Another theme to emerge was how technology supports shoppers’ desire for convenience: More than half of consumers want to order deli-prepared items using technology, the report found. When ordering in-store, 16% prefer ordering using in-store kiosks or touchscreens, while 36% prefer using their own smartphones. The remaining 48% prefer to order directly with a person.

FMI notes “that consumers acceptance of using tablets or kiosks to replace people for taking orders will be highly dependent on the store audience. Having customers use their own phone easily draws the highest preference among core consumers, but is the second highest among low- and average-frequency consumers.”

Technology use for ordering retail foodservice also varies greatly by generation. By far, Gen Z and millennials prefer using their own phones or a kiosk the most, with fewer than 1 in 5 of these generations favoring in-person ordering. On the other hand, 9 in 10 baby boomers prefer to order in person.

“This analysis underscores the power in convenience-driven retail foodservice observed by the grocery shopper. These programs continue to serve as differentiation strategies for their businesses,” Stein said.