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© 2015 Technomic Inc. SEPTEMBER 29, 2016 | technomic.com
Supermarket Foodservice: Creating Successful
Go-to-Market Strategies
PREPARED FOR:
SEPTEMBER 20151
© 2015 Technomic Inc.
Presentation Agenda
2
Study Overview
Key Conclusions
Core 4 Framework
Consumer Highlights
POV – Beef
Market Assessment and Forecast
© 2015 Technomic Inc.
INTRODUCTION
Draft Report
© 2015 Technomic Inc.
Objectives
4
Determine the current size and composition of the supermarket foodservice market by tier and category/product type (in dollars)
Forecast the next three years with projected growth rates by tier and category
Assess current supermarket business practices
Analyze trends related to food, culinary knowledge, formats and merchandising
Identify current consumer preferences, behaviors and needs
Deliver product category tier targeting – the Perimeter Opportunity Visualizer (POV)
© 2015 Technomic Inc.
Scope
5
‘Prepared (or partially prepared) foods that are found in sections of the store where consumers can pick up ready‐to‐eat or ready‐to‐heat items from service counters or self‐service/grab‐and‐go areas. These are products that do not require extensive
preparation beyond reheating (if applicable)’.
Hot and cold self‐service bars (including prepared entrees, salads, soup)
Specialty service case (traditional deli meats and cheeses are not included)
Dedicated stations or venues within the prepared foods area (these will vary by store ‐ e.g., pizza, sandwich, stir fry, carvery)
Grab‐and‐go (e.g., “deli wall”, “pre‐packs”)
Sushi
Cafés or restaurants within the store
© 2015 Technomic Inc.
Foodservice Specialists blur the line between supermarkets and restaurants. Gourmet menu items, limited table service, a warm atmosphere, and restaurant‐type amenities likely exist.
Scope (cont.)
6
TierCore 4
Segments Description
Foodservice Specialists1
Destination Supermarkets have a comprehensive perimeter that offers extensive choice across cuisine types. The perimeter often contains made‐to‐order stations, café‐type seating, and well‐trained service.
Destination Supermarkets2
© 2015 Technomic Inc.
Prepared Foods Departments have generally shifted focus away from meats and cheeses and to ready‐to‐eat or ready‐to‐heat meals. In most cases, shoppers have the ability to customize orders and there may be some basic in‐store seating.
Scope (cont.)
7
Tier Description
Prepared Foods Departments3
Extended Delis, while still emphasizing sliced meats and cheeses, typically offer customers several hot meal alternatives as well as a ready‐to‐eat cooler selection. They may even offer items such as sushi.
Extended Delis4
Core 4 Segments
© 2015 Technomic Inc.
Methodology
8
Program Initiation
Secondary Review
Consumer Survey
In-Depth Trade Interviews
Field Analysis
Reporting and Presentation
2
3
1
4
5
6
© 2015 Technomic Inc.
KEY CONCLUSIONS
Draft Report
© 2015 Technomic Inc.
Supermarket foodservice is one of the fastest growing segments in the away‐from‐home food industry and its underlying fundamentals make this a highly important opportunity for leading manufacturers.
Key Conclusions
10
11
22 Tiers of supermarkets exist (based on fresh prepared foods programs) and manufacturers must recognize the need to tailor sales, marketing, and product development activities to each of these different tiers.
© 2015 Technomic Inc.
Key Conclusions
11
Tailoring strategies requires a clearly defined supermarket foodservice vision; any lack of corporate vision will likely result in solutions that fail to completely meet the needs of the different supermarket banners.
33
44 The majority of volume is presently in Tier 3 (largely because of store count), but recognize that many Tier 3 banners have aggressive plans to elevate their prepared foods departments to Tier 2 levels; supermarket strategic plans and positioning are quickly evolving.
© 2015 Technomic Inc.
Key Conclusions
12
Tier 1, the most advanced level of supermarket foodservice, is dominated by Whole Foods in terms of sales, but most Tier 1 supermarkets share Whole Foods’ philosophies on food, atmosphere, and experience.
55
66 Food and beverages being offered within supermarket foodservice are far more sophisticated than one to two years ago.
© 2015 Technomic Inc.
Key Conclusions
13
One of the primary reasons for the strong historical and projected growth of supermarket foodservice is that core consumer needs are being met – not least among them being the desire for restaurant quality at less‐than‐restaurant pricing.
77
88 A secondary – but important – factor in consumer interest in supermarket foodservice is the fact that the dining experience has been upgraded dramatically.
© 2015 Technomic Inc.
Key Conclusions
14
Supermarket perimeters are being showcased via impressive re‐models, featured equipment, and made‐to‐order service. While Tier 1 locations have been the front runners in this regard, such strategies are increasingly being deployed at Tier 2 locations as well.
99
1010 An influx of professional foodservice management and production advances have lead to major quality improvements and preparation efficiencies.
© 2015 Technomic Inc.
Key Conclusions
15
Variety is highly important to consumers but manufacturers can help supermarkets understand the importance of optimized assortment.
1111
1212
1313
A large part of this opportunity is in ‘fresh’ foods and this means use of ‘real’ fresh and/or ‘extended’ fresh. This will be a challenge for supermarkets.
Manufacturers can best capitalize on the substantial supermarket foodservice upside by assisting retailers in finding ways to capture the center store shopper.
© 2015 Technomic Inc.
THE CORE 4 FRAMEWORK
Draft Report
© 2015 Technomic Inc.
The Core 4 Framework
17
Tiers defined and categorized according to:– Metrics– Food and programs– Physical characteristics– Marketing and communication
For today’s purposes, we will examine Tier 1– Each of the other tiers is profiled
similarly in the Technomic reportTier 1Tier 1
© 2015 Technomic Inc.
Example Metrics
18
Tier 1Tier 1
FPF to Total Store Size Ratio
20-30%
15-20FTE
Tier 2Tier 2
10-20%
10-15FTE
Tier 3Tier 3
5-15%
7-10FTE
Tier 4Tier 4
< 5%
2-4FTE
Service StaffHeadcount
FPF to Total Store Size Ratio
Service StaffHeadcount
© 2015 Technomic Inc.
Food and Programs
19
Tier 1 – Brand Penetration
Limited, highly curated (mostly single serve beverage, some pre‐pack/grab‐and‐go)
© 2015 Technomic Inc.
Physical Characteristics
20
Tier 1 – In‐store Location Strategy
Highly experiential, sensory design but within an integrated perimeter strategy
© 2015 Technomic Inc.
Physical Characteristics
21
Chef‐case (cold)Chef‐case (hot)
MTO SandwichesMTO Pizza
MTO SpecialtyMTO Ethnic
SushiCoffee Bar
Specialty Treat/DessertOther Specialty Beverage
By the Pound – Salad (simple)By the Pound – Salad (compound)
By the Pound – Hot BarBy the Cup – Soup Bar
Fountain Beverage Dispenser
Grab‐and‐Go Case – ColdGrab‐and‐Go Case – Hot
Grab‐and‐Go – Single‐Serve Beverages
Grab‐and‐Go Case Fresh CutGrab‐and‐Go Case Meal Starters
Produce
Condiments
Express Checkout
Produce
Color Key
Tier 1 – Space Utilization
© 2015 Technomic Inc.
Physical Characteristics
22
Tier 1 – Seating
Highly designed interior, placement is separate from rest of store
© 2015 Technomic Inc.
Marketing/Communication
23
Tier 1 – Core Positioning
Curated culinary experience is weighted equally with functional elements
© 2015 Technomic Inc.
Marketing/Communication
24
Tier 1 – Messaging
Food with a 'narrative', clear communication of attributes (e.g. in‐house, organic, local)
© 2015 Technomic Inc.
Marketing/Communication
25
Tier 1 – Merchandising Display
Liberal use of customized finishing and displays, heavy focus on visual presentation
© 2015 Technomic Inc.
CONSUMER DATA AND INSIGHTS
26Draft Report
© 2015 Technomic Inc.
Purchase Behavior
27
17%
42%
23%
8%
9%
Purchase Behaviorin a Typical Month
2‐3 times4‐6 times
10+ times7‐9 times
1 time
Nearly 35% of the demographic who purchase prepared foods from the supermarket 2‐3 times per month did so without planning the purchase in advance
Light Users: 17%
Medium Users: 65%
Heavy Users: 17%
© 2015 Technomic Inc.
Purchase Behavior
28
MEALS
“Which of the following day part(s) do you most frequently purchase ready-to-eat or ready-to-heat items from your supermarket? (select up to 3)”
SNACKS
Traditional meal times reign supreme as opportunities to purchase ready‐to‐eat or ready‐to‐heat meals at supermarkets
AM snack: 7%
PM snack: 16%
Late night: 6%
Breakfast: 18%
Lunch: 53%
Dinner: 70%
© 2015 Technomic Inc.
Purchase Frequency
29
Compared to last year, consumers are purchasing
prepared foods at supermarkets…
Convenience is a key reason consumers are purchasing prepared foods at supermarkets more frequently; price is a driver for consumers purchasing less frequently
WHY?
Less Frequently
13%
About the Same
51%
More Frequently
36%
65%
42%
41%
39%
37%
33%
25%
24%
22%
22%
15%
15%
3%
Convenience
I am on the go more often
Affordability
Quality of the food/beverages
Freshness
Better value than restaurant
Variety of the food/beverages
Good service
Healthier selections
Fast service
Appealing atmosphere
Made‐to‐order service
Other
© 2015 Technomic Inc.
Top Decision Drivers
30
“When considering supermarket prepared foods, how important are these factors when deciding?”
Where to purchase(Top 2 Box Scores)
What item to purchase(Top 2 Box Scores)
88%
87%
80%
72%
64%
Taste
Freshness
Appearance
Portion size
Variety
88%
82%
80%
74%
71%
Overall value
Price
Cleanliness
Difficulty ofpackaging
Staff
© 2015 Technomic Inc.
Value Added Proteins
31
Q20 What ready to eat or ready to heat protein options would you like to see more of? Select all that apply.Q21 Why are the main reasons why you usually purchase ready‐to‐eat or ready‐to‐heat protein items at the supermarket? (select up to 3)
Main reasons consumers purchase ready-to-eat and ready-to-heatprotein items at supermarkets
Consumers are seeking more ready‐to‐eat and ready‐to‐heat chicken and beef options at supermarkets
Proteins consumers would like to see more of
76%
46%
33%
30%
19%
18%
17%
14%
3%
1%
Convenience ‐ quick and easy option
Taste and flavor
Something I can't or don't want to take thetime to do at home
Variety, something different
Quality and value of the products
Healthy and nutritious
Flexibility so everyone in the household getswhat they want
Flexibility to customize
Something to impress my family/guests
Other
38%
45%50%
63%
© 2015 Technomic Inc.
17%
52%
11%4%
Price Comparison
32
Q48 Do you believe the price you paid for this meal was . . . (select up to 2)
“Considering price, this meal was…”
…less expensive than…
…more expensive than…
…at home …at a restaurant
© 2015 Technomic Inc.
Most Recent Purchase Snapshot
33
“When was your most recent prepared meal occasion?”
“Where did you purchase this most recent prepared meal?”
64%
47%
44%
33%
33%
25%
25%
24%
20%
18%
18%
16%
15%
12%
10%
7%
4%
1%
2%
Overall convenience
Fast & easy
Taste
Cost
Value
High quality
Too tired to cook
Already at the store
Don't want to cook
Customize my meal
Less expensive
Easier to eat at home
Variety
Doing other activities while eating
Appeals to children
Picking up food for others
Discount/coupon
Picking up items social event
Other
“This purchase was…”
“Who was the meal purchased for?”
“Where did you eat the meal?”
“Was the food you purchased eaten immediately?”
“What are the top reasons why you purchased a prepared meal from the supermarket?”
“My primary supermarket” 76%“Supermarket I shop at 22%frequently but not primary”
“Did you pick up a meal/snack for later in the day?”
“Within the last month” 94%“Within the last week” 68%
“Planned” 68%“Unplanned” 32%
“Myself” 40%“Adult family” 32%
“At home” 88%“At the store” 4%
“Eaten shortly after purchase” 77%“Eaten immediately in-store” 12%
“No” 86%“Yes” 14%
© 2015 Technomic Inc.
PERIMETER OPPORTUNITY VISUALIZER (POV)
34Draft Report
© 2015 Technomic Inc.
Category Overview – Beef
35
Gross margin requirements and fluctuating prices limit the potential for beef, and increase shrink riskTier 1 operators are willing to investSupplier / branded products have greatest potential in Tier 3 and 4 Leveraging the quality classification system (choice, prime, etc.) is an opportunity.The smoker may be the beef industry’s answer to the rotisserie
Highlights
© 2015 Technomic Inc.
Tier 1 – POV – Beef
36
Opportunity Zones
2
1
S
P
Meatballs are the most common menu item Tier 1 operators’ attempt to add value to their meatball offerings
The second most popular beef offering is roast beef – most often offered as a sandwich option
E
P Primary Application
Emerging/Innovation
S Secondary Uses
2 3
1
13
© 2015 Technomic Inc.
Tier 1 – POV – Beef
37
2
1
S
P
2 3
1
13
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 1 – POV – Beef
38
3
E
Higher value beef applications are seen as emerging in specialty MTO stations and upscale sandwich and meal offerings – specifically BBQ and Smoked MeatsSuch meats are sometimes cross‐utilized; supermarkets consider these new programs a success
2 3
1
13
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 1 – POV – Beef
39
3
E
2 3
1
13
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 2 – POV – Beef
40
2
1
S
P
Similar to Tier 1, meatballs are most common; Tier 2 operators attempt to position their meatball offerings as ‘better than average’
‘House‐made’ meatloaf is popular – most often as a family size, ready‐to‐eat meal optionRoast beef also common
2 31
1 2
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 2 – POV – Beef
41
3
E
Value added (fully cooked) meats with an ethnic twist in family‐size packaging is an emerging conceptFor example, 14 oz. – 32 oz. pack sizes of barbacoa or fajita meat
Small/regional ethnic manufacturers are active Strong opportunity for growth
2 31
1 2
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 2 – POV – Beef
42
3
E
2 31
1 2
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 3 – POV – Beef
43
1
P
Again, meatballs are most frequently a component
Sandwich offerings are important at this tierMany examples of branded deli meat programs (e.g. Dietz & Watson, Boar’s Head)
2
P
2 3
1
1
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 3 – POV – Beef
44
3 ‘Traditional’ and value‐oriented beef dishes as ready meals in grab‐and‐go are common (Salisbury Steak, Meatloaf, and Pasta with meat sauce)Packed in commissaries with the store brandedNational brands have significant presence (Hormel)
S
2 3
1
1
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 3 – POV – Beef
45
3
S
2 3
1
1
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
© 2015 Technomic Inc.
Tier 4 – POV – Beef
46
1
1
P
Meatballs are also the most common menu application in Tier 4; offerings are not very distinguishable
Limited beef sandwich options 2
S
Opportunity Zones
E
P Primary Application
Emerging/Innovation
S Secondary Uses
2
© 2015 Technomic Inc.
MARKET ASSESSMENT AND FORECAST
47Draft Report
© 2015 Technomic Inc. 48
Total Size of Supermarket Foodservice
$12,488
$27,478
2006 2014
Supermarket Foodservice Retail SalesSupermarket Foodservice Retail Sales
© 2015 Technomic Inc. 49
Supermarket Foodservice Sales By Product Category
28%18%
16%14%
4%3%
2%2%2%2%2%2%2%
Value‐Added MeatsSandwiches/wraps
Prepared MealsPrepared Salads
PizzaHot Beverages
AppetizersSweet Goods
PastaSide Dishes
Sauces/Dips/SpreadsSoups
Cold Beverages
2014 Supermarket Foodservice Retail Sales(Total = $27,478M)
© 2015 Technomic Inc. 50
Supermarket Foodservice Sales by Tier
Tier 2014 ($M) % of TotalTier 1 $3,261 12%Tier 2 5,933 22%Tier 3 15,686 57%Tier 4 2,599 9%TOTAL $27,478 100%
© 2015 Technomic Inc. 51
Total Forecasted Size of Supermarket Foodservice
$27,478
$35,093
2014 2017
8.5%8.5%
Supermarket Foodservice Retail SalesSupermarket Foodservice Retail Sales
© 2015 Technomic Inc. 52
Supermarket Foodservice Forecasted Growth By Tier
Tier 2014 ($M) 2017 ($M) Change ($M)
CAGR ‘14 – ’17
Tier 1 $3,261 $4,258 $997 9.3%Tier 2 5,933 7,737 1,804 9.3%Tier 3 15,686 19,868 4,182 8.2%Tier 4 2,599 3,229 630 7.5%Total $27,478 $35,093 $7,615 8.5%
© 2015 Technomic Inc.
Questions?
53Draft Report312‐876‐0004 | [email protected] | technomic.com
Adrienne NadeauSenior [email protected]
Wade [email protected]
Sandeep [email protected]
Deli Prepared FoodsIRI Retail Sales Data Summary
52 weeks ending 6/14/15, Alison Krebs
Table of Contents – Deli Prepared Foods
1. Overall department trends2. Protein item sales
• Beef items• Chicken items• Beef vs. chicken items
3. Deeper view of beef item sales• Entrees• Sandwiches• Soups, appetizers and salads
4. Growing items in deli prep5. Key takeaways and opportunities
Overall Department Trends
57
800,000,000
1,000,000,000
1,200,000,000
1,400,000,000
1,600,000,000
1,800,000,000
2,000,000,000
2,200,000,000
YAGO Volume
$5,000,000,000
$6,000,000,000
$7,000,000,000
$8,000,000,000
$9,000,000,000
$10,000,000,000
$11,000,000,000
YAGO Dollars
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Deli Prepared Trends Are Strong Across All Key Measures
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
$12,000
$13,000
YAGO $/MM ACV
8.8%
6.0%
6.9%
Sales Rates ($/MMACV) were also up vs. YAGO
Deli Prepared saw solid increases in the Total US vs. the previous year, both in volume and in dollars
Entrees, Salads, Sandwiches and Appetizers Drive Department Sales
0 100 200 300 400 500 600 700 800
HOLIDAY MEALS
SPREADS
RING ON
SOUPS
TRAYS
DESSERTS
BREAKFAST
DIPS/SAUCES
COMBO MEALS
PIZZA
SIDES
APPETIZERS
SANDWICHES
SALADS
ENTREES
Million Units
Deli Prepared Sales (Volume) by Category
For the 52 weeks, entrée sales approached $3.8 Billion
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Salads and Sandwiches Show Greatest Seasonality, Entrée Sales Chop Through Holiday Season
0
2
4
6
8
10
12
14
16
Million Units
Weekly Sales for Top Department Categories
APPETIZERS ENTREES SALADS SANDWICHES
Entrees have become the stable foundation of the deli prepared foods department
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Protein Item Sales
Roast Beef Sandwich Sales Dominate Top Beef Items List
0 5 10 15 20 25 30
CHILI
STEW
OTHER SOUP
BBQ/SLOPPY JOES
BURGER/CH‐BURGER
MEATBALLS
PHILLY STEAK
MEATLOAF
OTHER ENTRÉE
ROAST BEEF SAND
Million Units
Top Deli Prepared Beef Items (Volume) 1‐YearGrowth
5.2%
3.4%
30.1%
‐20.0%
5.8%
1.5%
‐2.5%
‐16.5%
371.6%
‐3.0%
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Roast beef sandwiches make up 56% of top 10 beef item volume
Three Categories Are Represented in Beef’s Top 10 Item List
Total US ‐ MULO
Category Segment SubSegmentVolume, Prior Yr Volume
Volume, Prior Yr %
ChgDollars, Prior
Yr Dollars
Dollars, Prior Yr %
Chg
$/MM ACV,
Prior Yr$/MM ACV
$/MM ACV,
Prior Yr % Chg
SANDWICHES COLD ROAST BEEF 23,399,427 24,608,609 5.2% $113,676,919 $120,351,428 5.9% $216 $235 9.0%
ENTREES BEEF OTHER 4,362,372 4,511,558 3.4% $34,339,016 $37,796,059 10.1% $126 $130 3.2%
ENTREES BEEF MEATLOAF 3,054,906 3,974,416 30.1% $18,501,512 $24,825,907 34.2% $76 $100 30.2%
SANDWICHES HOT PHILLY STEAK 4,273,369 3,417,035 -20.0% $30,024,921 $24,469,754 -18.5% $298 $214 -28.2%
ENTREES BEEF MEATBALLS 2,507,096 2,651,884 5.8% $13,481,094 $14,616,592 8.4% $74 $82 10.5%
SANDWICHES HOT HAMBURGER/CHEESEBURGER 1,627,173 1,651,289 1.5% $6,991,355 $7,250,757 3.7% $114 $72 -36.8%
ENTREES BEEF BBQ/SLOPPY JOES 984,831 960,674 -2.5% $7,110,230 $7,109,719 0.0% $403 $516 28.2%
SOUPS BEEF OTHER 698,345 583,166 -16.5% $3,686,967 $3,226,909 -12.5% $54 $923 1613.7%
SOUPS BEEF STEW 116,198 547,997 371.6% $733,054 $3,562,996 386.0% $13 $58 342.8%
SOUPS BEEF CHILI 564,750 547,886 -3.0% $2,252,422 $2,236,093 -0.7% $40 $235 485.1%
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Top Deli Prep Beef items, ranked by Volume
Top beef items feature ground, sliced or slow cooked beef, but no appetizers make the list
Deli Prepared Chicken Offers Convenience and Variety
0 50 100 150 200 250
GRILLED
POPCORN
HOT CH SAND
COLD CH SAND
CH SALAD
OTHER
TENDERS
WING/DINGS
FRIED
ROTISSERIE
Million Units
Top Deli Prepared Chicken Items 1‐YearGrowth
10.5%
1.1%
4.1%
1.7%
5.1%
‐1.7%
17.3%
30.1%
12.1%
7.5%
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Chicken item sales are much more evenly spread (vs. beef) as rotisserie chickens account for only 28% of top 10 chicken item
sales
Chicken Rules the Roost and Continues Strong Growth
Total US ‐ MULO
Category Segment SubSegmentVolume, Prior Yr Volume
Volume, Prior Yr %
Chg Dollars, Prior Yr Dollars
Dollars, Prior Yr %
Chg
$/MM ACV,
Prior Yr$/MM ACV
$/MM ACV, Prior Yr % Chg
ENTREES CHICKEN ROTISSERIE 184,174,650 203,580,225 10.5% $1,006,791,237 $1,091,411,878 8.4% $1,369 $1,442 5.3%
ENTREES CHICKEN FRIED 170,986,105 172,911,548 1.1% $753,230,049 $797,565,414 5.9% $1,034 $1,075 4.0%
APPETIZERS CHICKEN WING/DINGS 130,029,958 135,329,349 4.1% $584,784,159 $633,835,658 8.4% $813 $861 6.0%
APPETIZERS CHICKEN TENDERS 67,774,775 68,959,876 1.7% $398,519,985 $446,224,053 12.0% $602 $658 9.3%
ENTREES CHICKEN OTHER 54,930,430 57,708,700 5.1% $288,181,022 $303,115,756 5.2% $436 $448 2.8%
SALADS PROTEIN CHICKEN 34,074,762 33,489,309 -1.7% $218,530,091 $220,991,294 1.1% $322 $315 -2.3%
SANDWICHES COLD CHICKEN 21,581,552 25,317,133 17.3% $91,977,683 $110,946,434 20.6% $172 $202 17.3%
SANDWICHES HOT CHICKEN 11,337,773 14,746,644 30.1% $65,462,271 $90,290,935 37.9% $290 $381 31.4%
APPETIZERS CHICKEN POPCORN 7,508,468 8,417,343 12.1% $30,195,642 $33,240,456 10.1% $82 $89 8.3%
ENTREES CHICKEN GRILLED 7,475,939 8,038,828 7.5% $33,971,126 $37,775,463 11.2% $164 $189 15.0%
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Top Deli Prep Chicken items, ranked by Volume
#1 Beef Item (by volume) would be here
Rotisserie chicken is #1 deli prepared item with over 10% of department sales
By Volume, Chicken Appetizer and Entrée Sales Dwarf Beef Sales
0.1 13.5 1.7
29.8
215.8
455.9
0.2
40.1
‐
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
500.0
APPETIZERS ENTREES SOUPS SANDWICH
Millions
Annual Volume Sales by Protein
BEEF CHICKEN
By volume, deli prepared beef sales total 6% of chicken sales52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
By Dollars, Chicken Appetizer and Entrée Sales Dwarf Beef Sales
$0.0$0.1
$0.0$0.2
$1.1
$2.3
$0.0
$0.2
$‐
$0.50
$1.00
$1.50
$2.00
$2.50
APPETIZERS ENTREES SOUPS SANDWICH
Billion
Dollars
Annual Dollar Sales by Protein
BEEF CHICKEN
By dollars, deli prepared beef sales total 7% of chicken sales52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Beef Appetizers Barely Register When Compared to Chicken Appetizer Sales
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
APPETIZERS ENTREES
Percen
t of C
hicken
Sales
Deli Prepared Beef Sales as Percent of Chicken Sales
Volume Dollars
Appetizer pricing may be a smaller barrier for beef as the beef vs. chicken price premium is half that of entrees
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Entrees
Sales Are Spread Across Many Items As “Other” Is Top Beef Entrée Segment
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$0
$5
$10
$15
$20
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Million Units
Million Do
llars
Deli Prepared Beef Entree Sales
Volume Dollars
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Sales of economical offerings (Meatloaf, Meatballs) are greater vs. higher‐value Tri‐Tip or Prime Rib
“Other” Beef Entrée Sales Peak for New Years, Meatloaf Rallied into Spring
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Thou
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s
Weekly Deli Prepared Beef Entree Sales (Volume)
OTHER MEATLOAF MEATBALLS BBQ/SLOPPY JOES
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
BBQ/Sloppy Joes and Meatballs show little seasonality
Prime Rib Jumps at Holidays, Pot Roast and Pot Pie Drop in Summer, Tri‐Tip Weakened in Spring
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Thou
sand
s
Weekly Deli Prepared Beef Entree Sales (Volume)
POT ROAST MACARONI AND BEEF POT PIE TRI TIP PRIME RIB
Substitution to higher‐end option
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Consumers choose higher‐end products for special occasions
Fast‐Growing Stroganoff Was Strong in Fall, Ribs Peaked Late‐Summer
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Thou
sand
s
Weekly Deli Prepared Beef Entree Sales (Volume)
RIBS STROGONOFF ROTISSERIE
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Limited rotisserie success is isolated
Sandwiches
Poultry Takes Top Slots in Sandwiches
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$50
$100
$150
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$250
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Million Units
Million Do
llars
Top 10 Deli Prepared Sandwiches by Type
Volume Dollars
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
#1 Beef item for the entire department, the Roast Beef Sandwich, is a fraction of turkey and chicken sandwiches
Roast Beef Dominates Other Beef Sandwich Offerings
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$20
$40
$60
$80
$100
$120
$140
Million Units
Million Do
llars
Deli Prepared Beef Sandwich Sales
Volume Dollars
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Philly Steak is highest price/unit beef sandwich offering
Beef Sandwich Seasonality is Limited; Roast Beef Sales Slow in Winter
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Million Units –Ro
ast B
eef
Million Units –Be
yond
Roa
st Bee
f
WeeklyBeef Sandwich Sales (Volume)
BOLOGNA HAMBURGER/CHEESEBURGER HOT DOG MEATBALL PHILLY STEAK ROAST BEEF
Highest price/unit, Philly Steak, is trending down52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Soups, Appetizers and Salads
High Dollar Per Volume Stew Was Fastest Growing Beef Item
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700
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$0.5
$1.0
$1.5
$2.0
$2.5
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$4.0
OTHER STEW CHILI BARLEY
Thou
sand
Units
Million Do
llars
Deli Prepared Beef Soup Sales
Volume Dollars
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Consumers are showing some willingness to pay for more premium beef offerings
Beef Stew Sales Spike In Early‐Fall and Late‐Winter
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30
40
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60
Thou
sand
Units
Weekly Deli Prepared Beef Soup Sales (Volume)
BARLEY CHILI OTHER STEW
Consumers purchase other beef soup and chili throughout year, although some seasonality exists
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Chicken Items Dominate Appetizer Sales
0.13
0 20 40 60 80 100 120 140 160
BEEFOTHER SHRIMP
PORK POT STICKERSCHICK POT STICKERS
ONION RINGSOTHER PROTEIN
CHICKEN NUGGETSOTHER CHICKEN
OTHER VEGETABLECRAB S‐FOOD CAKES
DEVILED EGGPICKLES
OTHER APPETIZERSJALAPENO POPPERS
MOZZ CHEESE STICKSTORTILLA CHIPS
POPCORN CHICKENEGG ROLLS
OLIVESCHICKEN TENDERS
CHICK WING/DINGS
Million Units
Top 20 Deli Prepared Appetizer Sales (Volume)
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Total beef appetizer sales fail to reach 20th item sales
Beef Appetizer Sales Peak Over Holidays and for Super Bowl
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Weekly Beef Appetizer Sales (Volume)
Beef appetizer sales are meager, except for isolated exceptions52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Protein Salad Sales Are 0.4% of Total Salad Volume
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COLE SLAW FRUIT LEAF MACARONI PASTA POTATO PROTEIN RICE/GRAIN VEGETABLE
Million Units
Salad Sales (Volume)
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Beef salad opportunities have been limited, to date
“Other” protein salad sales (which includes beef) grew at 12% compared to 2% for all protein salads and 1% for salads overall
Growing Items in Deli Prepared Foods
Category Segment SubSegmentVolume, Prior Yr Volume
Volume, Prior Yr %
ChgDollars, Prior Yr Dollars
Dollars, Prior Yr %
Chg
$/MM ACV,
Prior Yr$/MM ACV
$/MM ACV, Prior Yr % Chg
APPETIZERS POT STICKERS VEGETABLE 236 75,891 32072.3% $548 $377,012 68651.3% $3 $40 1432.1%
BREAKFAST OTHER NA VARIETY 444 10,042 2159.7% $2,528 $64,186 2439.2% $3 $4 17.2%
SPREADS PATE NA VARIETY 216 2,068 858.9% $2,635 $19,456 638.4% $13 $6 -50.1%
APPETIZERS POT STICKERS CHICKEN 126381 947,423 649.7% $88,530 $1,386,074 1465.7% $15 $51 233.2%
SOUPS BEEF STEW 116,198 547,997 371.6% $733,054 $3,562,996 386.0% $13 $58 342.8%
ENTREES MEXICAN FAJITAS 18022 84,094 366.6% $128,327 $764,861 496.0% $62 $21 -65.7%
SIDES RICE WILD 38,397 160,182 317.2% $157,586 $696,782 342.2% $22 $71 226.3%
SIDES RICE PILAF 53541 209,543 291.4% $197,138 $768,793 290.0% $15 $13 -14.2%
ENTREES BEEF STROGONOFF 32,542 120,667 270.8% $208,230 $786,065 277.5% $28 $15 -43.8%
ENTREES SEAFOOD SWORDFISH 140 436 210.6% $2,225 $7,372 231.3% $11 $23 116.6%
Six Categories Are Represented in Fastest Growing Items List
Total US ‐ MULO
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Consumers are showing interest in a wide variety of offerings
Top 10 Deli Prep items, ranked by Volume % Change
Chicken Pot Stickers Replaced and Surpassed Pork Pot Stickers
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Weekly Pot Sticker Sales (Volume)
CHICKEN OTHER PORK VEGETABLE
Total Pot Sticker segment grew 29% with little seasonality52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
While “Other” Breakfast Items Grew, Total Category Struggled
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Weekly Breakfast Item Sales (Volume)
EGGS ENTREE OTHER PANCAKES/WAFFLES SANDWICH SIDE
Breakfast category declined 5%; sandwich sales failed to rebound from new year declines
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Top Growing Chicken Items Are Spread Across Categories
Total US ‐ MULO
Category Segment SubSegmentVolume, Prior Yr Volume
Volume, Prior Yr %
Chg Dollars, Prior Yr Dollars
Dollars, Prior Yr %
Chg
$/MM ACV,
Prior Yr$/MM ACV
$/MM ACV, Prior Yr % Chg
APPETIZERS POT STICKERS CHICKEN 126,381 947,423 649.7% $88,530 $1,386,074 1465.7% $15 $51 233.2%
SOUPS CHICKEN CHILI 2,494 7,210 189.0% $22,155 $60,653 173.8% $21 $19 -10.5%
ENTREES CHICKEN MARSALA 163,921 349,507 113.2% $629,307 $1,405,959 123.4% $41 $66 63.2%
SOUPS CHICKEN OTHER 28,073 44,409 58.2% $155,936 $312,217 100.2% $36 $24 -34.0%
SANDWICHES HOT CHICKEN 11,337,773 14,746,644 30.1% $65,462,271 $90,290,935 37.9% $290 $381 31.4%
ENTREES CHICKEN CORDON BLEU 287,890 359,322 24.8% $1,611,001 $1,999,439 24.1% $46 $44 -4.3%
APPETIZERS CHICKEN NUGGETS 1,172,844 1,419,234 21.0% $6,312,127 $7,912,962 25.4% $146 $105 -28.6%
SANDWICHES COLD CHICKEN 21,581,552 25,317,133 17.3% $91,977,683 $110,946,434 20.6% $172 $202 17.3%
APPETIZERS CHICKEN POPCORN 7,508,468 8,417,343 12.1% $30,195,642 $33,240,456 10.1% $82 $89 8.3%
ENTREES CHICKEN ROTISSERIE 184,174,650 203,580,225 10.5% $1,006,791,237 $1,091,411,878 8.4% $1,369 $1,442 5.3%
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Rotisserie chicken still shows strong growth, and chicken’s overall growth continues to outpace alternatives
Top 10 Deli Prep Chicken items, ranked by Volume % Change
Beef Entrees Dominate List of Fast Growing Beef Items
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Total US ‐ MULO
Category Segment SubSegmentVolume, Prior Yr Volume
Volume, Prior Yr %
ChgDollars, Prior
Yr Dollars
Dollars, Prior Yr %
Chg
$/MM ACV,
Prior Yr$/MM ACV
$/MM ACV,
Prior Yr % Chg
SOUPS BEEF STEW 116,198 547,997 371.6% $733,054 $3,562,996 386.0% $13 $58 342.8%
ENTREES BEEF STROGONOFF 32,542 120,667 270.8% $208,230 $786,065 277.5% $28 $15 -43.8%
ENTREES BEEF POT PIE 164,241 217,837 32.6% $1,000,322 $1,352,174 35.2% $24 $71 198.2%
ENTREES BEEF MEATLOAF 3,054,906 3,974,416 30.1% $18,501,512 $24,825,907 34.2% $76 $100 30.2%
APPETIZERS BEEF NA VARIETY 113,078 129,145 14.2% $651,569 $766,246 17.6% $98 $113 15.3%
ENTREES BEEF POT ROAST 386,061 413,106 7.0% $2,613,012 $2,771,699 6.1% $36 $75 109.2%
ENTREES BEEF MEATBALLS 2,507,096 2,651,884 5.8% $13,481,094 $14,616,592 8.4% $74 $82 10.5%
SANDWICHES COLD ROAST BEEF 23,399,427 24,608,609 5.2% $113,676,919 $120,351,428 5.9% $216 $235 9.0%
ENTREES BEEF OTHER 4,362,372 4,511,558 3.4% $34,339,016 $37,796,059 10.1% $126 $130 3.2%
ENTREES BEEF MACARONI AND BEEF 217,409 221,237 1.8% $1,141,456 $1,191,354 4.4% $45 $46 2.3%
Top 10 growth rate dwindles much faster for beef items than for chicken items
Top 10 Deli Prep Beef items, ranked by Volume % Change
+10.5% for 10th fastest growing chicken item
Ethnic Offering Growth Outpaces Department Growth
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ASIAN MEXICAN ITALIAN
Ethnic Cuisine Growth Rates (Volume)
Consumers show interest in moving beyond traditional deli prepared department offerings
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Robust Stroganoff and Other Comfort Foods Are Driving Beef Entrée Growth
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Beef entrée sales averaged 11% sales growth (volume), although highest‐priced products showed volume declines
*No year-prior data for barley soup sales
‐100% ‐50% 0% 50% 100% 150% 200% 250% 300%
ROTISSERIE
TRI TIP
PRIME RIB
RIBS
BBQ/SLOPPY JOES
MAC AND BEEF
OTHER
MEATBALLS
POT ROAST
Average
MEATLOAF
POT PIE
STROGONOFF
Beef Entrees Percent Change from Prior Year
Volume Dollars
Price/Unit
$ 6.51
$ 6.21
$ 6.25
$ 7.02
$ 6.71
$ 5.51
$ 8.38
$ 5.38
$ 7.40
$ 7.20
$ 12.73
$ 11.85
$ 6.29
While Beef Stew Shines, Other Items Have Lost Ground
‐50% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450%
BOLOGNA
PHILLY STEAK
OTHER
Average
MEATBALL
CHILI
HOT DOG
BURGER/CHBGR
ROAST BEEF
APPETIZER
STEW
Non‐Entree Beef Items: Percent Change from Prior Year
Dollars Volume
52 Weeks ending 6/14/2015 – IRI/FreshLook Marketing, Multi-Outlet
Non‐entrée beef items averaged 28% sales decline (volume), with highest priced products showing greater declines
Price/Unit
$ 6.50
$ 5.93
$ 4.89
$ 4.39
$ 2.62
$ 4.08
$ 6.14
$ 5.53
$ 7.16
$ 7.06
$ 3.48
Key Takeaways and Opportunities
Key Takeaways for Beef
• Entrée is the largest category in deli prepared foods• Compared to chicken, beef is losing the growth battle as well as the volume battle
• Traditional and comfort foods drive beef item sales*• Beef item sales reflect an interest in economical as well as premium offerings
• Some beef items may be experiencing price resistance• Beef appetizers are especially under represented• Consumers appear open to a variety of offerings
*Some ethnic foods (such as Mexican) are categorized by item type vs. protein (e.g. fajita or burrito), so comparative protein sales cannot be gauged.
Opportunities for Beef
• Beef’s strong entrée reputation could be leveraged to align with the department’s strongest category
• Ethnic item growth may fit well with beef• Additional economical offerings, especially as ingredients may resonate with consumers
• With a lower ingredient share cost, beef appetizers may face less price resistance
For Additional Information, Contact:Alison L. Krebs
Director, Market [email protected]
NCBA, A Contractor to the Beef Checkoff