Deli, a Dark-Horse Winner in 2021, Looks Ahead

The deli department roared back to life in 2021 after a year marked by service shutdowns, and the continued trend of working from/eating at home makes deli poised for additional growth this year, recent industry sales data suggests.

"2021 was an all-around comeback with gains in each of the four areas within deli," said Jeremy Johnson, VP of education for the International Dairy Deli Bakery Association (IDDBA), in a December sales report produced with market researcher IRI and 210 Analytics. Convenience-focused items, he noted, saw strong sales in 2021 as consumers resumed more activities in-person—but weren't necessarily going to the office or getting restaurant meals as often as they did two years ago. Today, with the COVID-19 pandemic still in flux, shoppers are "once more seeking time-saving, delicious foods they can easily prepare at home without a lot of planning, preparation and cleaning up."

Deli department sales were up 11% over 2020 and 13% over 2019, IRI and 210 Analytics reported, with the greatest dollar sales gains vs. 2020 in deli prepared (up 18%) and deli entertaining (up 7.7%). Both subcategories were hit especially hard by COVID-19-prompted shutdowns in 2020.

Meanwhile, deli meat and deli cheese both managed to eke out year-over-year dollar sales gains that exceeded subcategory inflation of 5% and 2.4%, respectively. In addition, although deli-meat sales by volume were down slightly in December from year-ago levels, they were up more than 5% from December 2019. Packaged lunchmeat saw both sales and volumes increase vs. 2020 and on a two-year stack. "Lunchmeat has been a powerhouse all throughout 2020 and 2021 as many more lunch occasions shifted to the home," IRI noted. 

Grab-and-go and presliced were growth leaders for deli meat and cheese, with shoppers grateful for selections they could add to their basket quickly during shorter-than-prepandemic shopping trips. These items also can give inflation-conscious consumers an opportunity to indulge in favorite tastes without having to swallow obvious price increases on other and nationally branded meat products. 

Heading further into 2022, consumers' appetite for combining convenience and custom-prepared (homemade) is likely to remain strong, said Jonna Parker, IRI team lead for fresh. "Cooking today is much more about mixing and matching items cooked from scratch with items that are semi- or fully prepared," she said. "While the produce and meat departments carry many convenience-focused solutions, deli can still expand its role in everyday meal occasions in 2022, whether as a full meal solution or part of a meal."