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The Power of Foodservice 2019 an In-Depth Look at Foodservice at Retail Through the Shoppers’ Eyes

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The Power of Foodservice 2019 an In-Depth Look at Foodservice at Retail Through the Shoppers’ Eyes The Power of Foodservice 2019 An in-depth look at foodservice at retail through the shoppers’ eyes Presented by: Rick Stein | FMI Anne-Marie Roerink | 210 Analytics Made possible by: FMI is the trade association that serves as the voice of food retail. We assist food retailers in their role of feeding families and enriching lives. The Association: Our members are food retailers, wholesales and suppliers of all types and sizes FMI provides comprehensive programs, resources and advocacy for the food, pharmacy and grocery retail industry CONSUMER & FOOD SAFETY GOVERNMENT INDEPENDENT CENTER STORE COMMUNITY AFFAIRS & DEFENSE RELATIONS OPERATOR PRIVATE BRANDS SUPPLY CHAIN TECHNOLOGY ASSET COMMUNICATION EDUCATION FRESH FOODS HEALTH & WELLNESS INFORMATION RESEARCH SUSTAINABILITY WHOLESALER PROTECTION SERVICE Fresh @ FMI FMI is committed to the growth and success of fresh companies and their partners. FMI provides resources and networks that support the interests of member companies throughout the global, fresh produce supply chain, including family-owned, private and publicly traded businesses as well as regional, national and international companies. Emphasis on fresh • Produce Rick Stein • Meat Vice President, Fresh Foods • Seafood Food Marketing Institute • Deli/In-store, fresh prepared foods and [email protected] Fresh Foods assortments 202.220.0700 • Bakery • Floral FMI Fresh Foods Research and Education Networking Advocacy In-depth information, trends and Share ideas, explore best practices Understand what is going on in insights to foster innovation, take and develop business relations Washington and make your voice advantage of new opportunities heard and help develop winning strategies FMI Fresh Executive Committee (FEC) John Ruane (Chair) Nate Stewart John Grimes Scott Evans Nicole Wegman* Ahold USA Hy-Vee Weis Markets Price Chopper/Mkt 32 Wegmans Food Markets, Inc. Rick Steigerwald (Co-Chair) John Haggerty Rick Findlay Buddy Jones * Silent members Fresh Foods Lund Food Holdings, Inc. Burris Logistics Fresh Thyme MDI Distributors The FEC is.. Tom DeVries Mark Hilton Gary York Amanda Becker Giant Eagle, Inc. Harris Teeter LLC CH Robinson Fresh Fairway Markets Comprised of FMI Member John Beretta Terry Murphy Steve Howard Troy Vosburg companies, Retailers and Albertsons, LLC Wakefern Food Corporation Bristol Farms/Lazy Acres Festival Foods Wholesalers Dave Bornmann Kirk LaBoyteaux Mike Richter John Beretta Publix Super Markets, Inc. Brookshire Grocery Company Coborns Albertsons Co’s Scott Bradley Dan Murphy Jerry Goldsmith Paul White Target Corporation SuperValu/UNFI Spartan Nash Luckys Markets Jerry Chadwick Pat Pessotto Anthony Sattler Manuel Gonzales Lancaster Foods, LLC Longo Brothers Fruit Markets C&S Wholesalers Northgate Gonzales Inc. Alex Corbishley Teri Rose Reade Sievert Target Corporation Nick Carlino Kroger AWG MDI Distributors Buddy Jones Jack Bell Scott Caro MDI Distributors Don Sanderson Save-A-Lot Topco Meijer, Inc. Dan Koch Paul Kneeland Associated Wholesale Geoff Waldau Gelsons Markets Grocers, Inc. Food Lion FMI Fresh Foods Leadership Council John Ruane (Co-Chair) Julie Ann Potts/Eric Zito Chad Gregory Tom Daniel Ahold USA North American Meat Institute United Egg Producers Sterilox/Chemstar Rick Steigerwald (Co-Chair) Tom Super Eric Gassaway Randy Evins Lund Food Holdings, Inc. National Chicken Council Bayer SAP All- FEC Members Jarrod Sutton John Knorr Tom Windish FMI Fresh Executive Council National Pork Board Phillips Seafood Cargill Chris Dubois Joe Watson Mike Celani Michael Forrest/Ellisa Garling IRI Produce Marketing Assoc. Wonderful Thomas Foods Michael Eardley Joe Weber Jim Randazzo Mark Molter International Dairy-Deli-Bakery Assoc. Smithfield Foods Inc. Aqua Star Seafood ADC. Jason Jerome Art Yerecic/Elizabeth Yerecic Jeff Thompson Lance Jungmeyer National Cattleman's Beef Association Yerecic Label Trident Seafood FPAA Sarah Schmansky Brad Roche Jeff Baker Ray Fager Nielsen Perishables Group Hill Phoenix Hormel Foods Kings Hawaiian Paul Mastronardi Greg Livelli Sally Lyons-Wyatt Maureen Davis Mastronardi Produce Hussmann IRI Taylor Farms David Sherrod Robb MacKie Wendy Reinhardt Kapsak SE Produce Council American Bakers Assoc. Produce for Better Health (PBH) Tom Stenzel/Miriam Wolk Jim Huston Michael Lang United Fresh Produce Assoc. Johnsonville Invatron A quick bit on Methodology . Fourth annual study . Commissioned by the FMI . Conducted by 210 Analytics . Made possible by Hussmann . 360° view of foodservice at retail . Understanding opportunities, habits, preferences and trends . Shopper survey to determine attitudes, interests and behaviors . Sales overlay by Nielsen and IRI . Visuals to illustrate report findings . Developed for the industry by the industry FMI | The Power of Foodservice at Retail 2019© 8 Study definition for consumer understanding Throughout the remainder of the survey, “deli or prepared foods” refer to items that are fully- or partially-prepared and are usually found in the deli . Grab-and-go or heat-and-eat items . Convenient alternatives to cooking or restaurant/fast food . Use with items cooked from scratch or as a complete meal solution for breakfast, lunch or dinner . Examples: rotisserie chickens, sushi, salad bars, pizza, sandwiches, hot food bars, made-to-order and more FMI | The Power of Foodservice at Retail 2019© 9 Today’s agenda MARKET DINNER LUNCHTIME CHANNEL REVIEW EXECUTION HABITS CHOICES KEY TAKEAWAYS VARIETY & TECHNOLOGY NUTRITION, PACKAGING ROTATION INFLUENCE BALANCE & HEALTH FMI | The Power of Foodservice at Retail 2019© 10 Home-prepared meals Meal planning Deli prepared as solution What a meal looks like MARKET REVIEW Picture: 210 Analytics 11 Deli: A key area of differentiation and growth Deli and deli-prepared are smaller, but drive robust growth Total deli % growth $ size in B . $36.9B +1.6% $61.1 . +7.0% growth ($) +2.2% $67.3 Deli-prepared . $12.7B +3.7% $13.3 . +7.9% growth ($) +4.8% $5.3 Source: Nielsen Total Food View, Total U.S. xAOC 52 Weeks Ending 6/8/19, 12 inclusive of UPC-coded and random-weight/non-UPC data Deli-prepared: a multi-year growth engine x $1million Deli-prepared food dollar sales 2015-2018 $14,000 +8.4% $12,000 +12.8% +4.6% $10,000 $8,000 $6,000 $4,000 $2,000 $0 2015 2016 2017 2018 Source: Nielsen Total Food View, Total U.S. xAOC 52 Weeks Ending 6/8/19, inclusive of UPC-coded and random-weight/non-UPC data 13 Continued growth is very possible Opportunity to drive conversion, trips and basket ring 20.0x 94.1% $7.92 Annual deli- HH engagement Average ring prepared trips deli-prepared deli-prepared . 28.3x 98.8% Total deli Total deli . Source: Nielsen Homescan Panel, Total Shopper View, 52 weeks ending3/31/2019 14 Home-prepared meals Meal planning Deli prepared as solution What a meal looks like DINNER EXECUTION Picture: 210 Analytics 15 Most plan just a few days at a time Those going day by day, cook less often, rely on convenience solutions but don’t have deli-prepared on the radar Meal planning 42% Try to meal plan for the next few days 29% Try to meal plan for the entire week 29% Typically don’t plan and go one day at a time FMI | The Power of Foodservice at Retail 2019© 16 Home-prepared meals average drops further 4.9 August 2017 4.5 June 2019 FMI | The Power of Foodservice at Retail 2019© 17 However, kids are an important turning point Younger Millennials are one of the few groups cooking more often Trends: Declines across demographics Kids are a turning point among Millennials The more meal planning, the more meals at home, including retail foodservice FMI | The Power of Foodservice at Retail 2019© 18 Thinking through all the ways to drive meal planning Being a helping hand in the weekly menu, what’s new and encouraging routines Pictures: 210 Analytics 19 Consumers do seek convenience when cooking Convenience is driving $ across the store; undermining deli-prep? 56% Scratch + semi/fully prepared items At home 37% Mostly from scratch dinners 7% Mostly semi/fully-prepared items FMI | The Power of Foodservice at Retail 2019© 20 This scenario should help retail foodservice, and is However, still not on the radar among those who eat out the most 2018 Purchasing grocery deli-prepared food when not preparing dinner at home 2019 62% 53% 24% 21% 15% 14% 7% 3% Never Hardly ever Sometimes Frequently FMI | The Power of Foodservice at Retail 2019© 21 Who is the retail foodservice regular? Core customers . Engagement at lunchtime as well as dinner . High reliance on technology for meal decisions . High reliance on convenience solutions when cooking . Shop 3+ times per week . Living in the Pacific and Middle Atlantic , particularly metro/urban areas . Average age of 40, with older kids (7-18) FMI | The Power of Foodservice at Retail 2019© | Picture: 210 Analytics 22 Frequency of purchase Important attributes How fast is fast LUNCHTIME FMI | The Power of Foodservice at Retail 2019© | Picture: 210 Analytics 23 Lunch sees lower engagement than dinner Driven by access, awareness and demographics Frequency of purchasing deli-prepared foods for lunch 33% 27% 22% 10% 7% 2% Never Less than once Every few Every week Every few days Daily a month weeks FMI | The Power of Foodservice at Retail 2019© 24 Winning at lunchtime: speed Advance ordering > delivery Top 3 consumer deli-prepared wants at lunchtime 71% Ability to get in/out the store fast 59% Extensive grab-and-go 56% Easy parking FMI | The Power of Foodservice at Retail 2019© | Picture: 210 Analytics 25 How fast is fast? Max time shoppers want to spend on getting lunch 15 Minutes FMI | The Power of Foodservice at Retail 2019© 26 Supermarket dominance Conversion Program reputation CHANNEL CHOICE FMI | The Power of Foodservice at Retail 2019© | Picture: 210 Analytics 27 Supermarkets claim the top spot overall Millennials underindex. Can foodservice be a way to connect? Primary store for groceries 51% All Young Millennials 35% Older Millennials 7% 4% 3% 0.6% Full-service Supercenter Limited Specialty/ Warehouse club Online supermarket assortment organic FMI | The Power of Foodservice at Retail 2019© | Picture: 210 Analytics 28 Supermarkets have highest conversion Store and deli trips often do not translate into foodservice purchases Buying retail foodservice vs.
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