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Report: Prepared Foods and “Grocerants” Are on the Rise

In News, Trends by Amelie Welden0 Comments

Sales of grocery prepared foods are growing fast. And as consumers continue to demand high-quality, convenient options, the trend is likely to continue. Several recent studies provide more details.

Prepared foods are a high-growth sector

Prepared foods at grocery outlets are seeing sizable growth.

  • “In-store dining and take-out of prepared foods from grocers has grown nearly 30% since 2008,” according to the NPD Group.
    • Last year, these foods “accounted for 2.4 billion foodservice visits and $10 billion of consumer spending.”
  • According to FMI and Technomic, sales of supermarket fresh prepared foods have grown by $15 billion over the last eight years. (Discussions available here and here.)
    • Fresh prepared foods grew by an annual rate of 10.4% between 2006 and 2014, making this one of the highest-performing segments in the entire food industry.

Grocers are providing more than just prepared foods

FMI and Technomic report several ways that grocers are enhancing their prepared foods sections. They’re offering more in terms of quality and amenities, while also optimizing their food selection.

  • Professionally trained chefs are becoming commonplace at supermarket chains and other grocery outlets.
  • As added amenities:
    • 96% of supermarket banner stores now offer in-store seating in at least some locations.
    • 86% of banners provide free Wi-Fi.
    • 89% of banners offer beer and wine tasting in at least some locations.
    • 72% have a beer or wine bar.
  • Stores are cutting back on the number of prepared food offerings as metrics reveal the most successful items. However, customization options mean that consumers continue to find an acceptable level of variety.

Consumers like what “grocerants” have to offer

“Grocerants”—or in-store prepared food sections with some amenities—rate highly with consumers. Buying habits are reflecting these preferences with customers of all ages, particularly Millennials.

  • The NPD Group says that more than 40% of U.S. consumers purchase prepared foods from grocery stores.
  • Consumers rate “Grocerants” higher than traditional quick-service restaurants on variety, healthy options, freshness, and quality.
  • “Grocerants” appeal to Millennials, despite the fact that they use grocery stores less than other generational groups.

Look to health, transparency, and other trends for the future

At a presentation given at FMI Connect in June, executives from DataSsential and Nielsen offered insight about where the prepared foods sector may be heading in the future.

For example, consumers were asked how grocery stores could improve prepared foods. Many of the answers have to do with health, transparency, and variety.

  • 66% said prepared foods should have nutritional and ingredient labels.
  • 65% said foods should be made from scratch as much as possible.
  • 63% said healthy labeling is the best way to present healthy products.
  • 62% said cold salads and bars should have both green and grain salad offerings.
  • 55% said hot food sections should offer more vegetable-based/vegetarian options.
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Given current trends and opportunities, the presenters also offered advice for future success. Their tips included providing more “convenient, portable, on-the-go complete meals and snacks,” “[elevating] your deli to a dining destination,” and “[considering] technology as a vehicle for promotion.”

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