As supermarkets compete to offer shoppers maximum convenience, prepackaged meals are cooking up some tasty profits. The appeal? They’re quick, easy and often healthier than restaurant options, but offer the emotional satisfaction of home-cooked meals.
Prepackaged meals that pull together ingredients for various dishes are increasingly available in U.S. markets for either delivery or in-store purchase. A study by the Retail Feedback Group last year showed 53 percent of U.S. buyers of prepackaged meals bought them because of the ingredient quality, while 54 percent said they were a good value and 51 percent noted they saved them time.
Grocery retailers currently offering prepared meals include Kroger, Whole Foods, and Publix, to name a few. They are offering these prepared meals to compete with online delivery services and satisfy a need of their customers.
58 percent of the $24 billion in deli sales were prepared foods in mid-2016, according to a study commissioned by the Fresh Foods Leadership Council of the Arlington, VA based Food Marketing Institute (FMI). And, many industry gurus predict continued growth. In fact, “supermarket prepared food departments are the fastest-growing segment in food service”, says analyst Mike Kostyo, senior publications manager of Chicago based Datassential.
How will Supermarkets Compete in Prepackaged Meals?
Grocery retailers have some advantages when competing for this growing segment.
- Consumers are already shopping their stores and buying their groceries. With appetite-appealing meals at a good price, it will be hard for shoppers to resist.
- Supermarkets are on the high end of consumers’ trust when it comes to food safety. They are a known and proven entity.
- Grocers also have the ability to leverage their shopper data to deliver the flavor profiles and ingredients their shoppers are interested in, as well as, locally and regionally sourced food offerings.
“Grocery stores see (delivery companies) as a threat, and they’re going to find ways to fight back,” says Bain & Co analyst Mikey Vu on CNBC.com. “There’s no doubt, shoppers are looking for convenience and low prices.” Grocers that are able to leverage prepackaged meals as an affordable option while maintaining convenience will surely drive more competition for delivery services.
In a typical logistics scenario, vendors assemble the fresh ingredients off-site and transport the prepared meals direct to store. They may have pre-cut, marinated or pre-cooked the items to save customers time and add value to their offerings.
Transportation logistics and packaging for prepackaged meals are a top consideration for grocers. The transport packaging must maintain the integrity of the prepackaged food to meet their customer’s expectations of fresh and high-quality products. The packaging must not only protect the final delivery to the customer but the upstream shipments of the meal components to the assembly site as well. The use of reusable plastic containers (RPCs) that provide greater structural integrity and reduce damage to the contents inside are ideal. RPCs also offer a standard footprint which improves stackability and pallet integrity during transit.
With growing interest in prepackaged foods, supermarkets can leverage their advantages to differentiate their offerings and compete with the many formats vying for these consumer dollars.