Page 37 - Deli Business June/July 2020

FEATURE
The coronavirus epidemic rocked the deli, bringing some new trends that will last, as anxious consumers practice social distancing to protect themselves and their communities. Other changes could endure as long as the deep recession that is likely to result from efforts to fight the disease. There may even be a few new develop- ments that could become permanent, as consumers become accustomed to buying food online.
Pandemics and Packaged Deli Foods
While the pandemic has hurt deli sales— they were down more than 25 percent for the year on April 21—there are also oppor- tunities to merchandise packaged goods in innovative ways and to take advantage of the growing trend of internet-based sales.
Packaged Mediterranean products are generally gaining market share in the deli at the expense of the prepared foods cases, and smaller sizes suit the trend toward eat- ing alone or with just immediate family members.
But the changes brought by the pan- demic to the marketing landscape are so deep and complex that delis have a need and a right to expect help from their suppli- ers sorting out the details.
“You have to get as much information as you can to help retailers understand what their customers are thinking,” says Ken Dedic, vice president of sales and market- ing at Jaffa Salads, Mundelein, IL.
The IDDBA teamed up with San Antonio, TX-based 210 Analytics to pro- duce weekly analysis of changing trends in the deli and throughout the supermarket
during the pandemic and restrictions on social interaction.
Panic shopping hit supermarkets in late March, with meat sales nearly doubling in the week ending March 22 as consumers filled their freezers and produce sales up 30 percent and dairy sales increasing 60 per- cent as they filled their refrigerators.
But while sales in those departments have remained high as the restaurant sec- tor collapsed, they have come down to earth as people grew more relaxed about the food supply system.
“Stock-up shopping is likely to taper further, as pantries and freezers are full,” says 210 Analytics president Anne-Marie Roerink in her April 7, 2020 report. “Consumers are settling into new realities of social distancing and are confident there will be ample food.”
Some suppliers of Mediterranean deli foods noticed this pattern of frenzied buy- ing in supermarkets followed by a return to something like normalcy.
“Volume went up sharply at first, as people filled their pantries, and now it’s settled down to normal,” says Klein. “The trend among retailers is to focus on their best-selling items to minimize the com- plexity in the warehouse and stores. This is done to different degrees by different retail- ers. Some do it a lot, others a little, and some started doing it a lot and then dialed it back some.”
Total deli sales were down 27 percent for the week ending April 12 compared to a year before, but the decline has been uneven as the bottom dropped out of dis- plays of foods that consumers can look over at close range or even touch, while sales of
packaged items were robust.
“During Easter week, the deli department
experienced year-over-year sales increases for cheese, flat results for deli meat and con- tinued deep declines for deli-prepared. Service counters and self-serve areas con- tinued to be closed across many retailers or have shifted to an expanded meat/cheese grab-and-go assortment,” says Roerink.
Some suppliers believe that as consum- ers practice social distance in response to the virus, the size of the most popular pack- ages has trended smaller.
“The larger size products are probably going to dip,” Dedic says. “A 1-pound prod- uct would probably be for a larger number of people. My products are more social experi- ence products. We lost business compared to last year in the week before Easter.”
The Post Pandemic Pantry
Even as the pressure to practice social distancing eases, consumers are likely to continue their cost-conscious food buying ways during what could be lingering diffi- cult economic times.
“We have seen a decrease in branded products, but nothing debilitating,” says Dedic. “I’m still up around 20 percent on the year in volume because we are new, priced competitively, and sometimes it’s good to be small. We’re going to be able to survive this. We are trying to do more pro- motions; I’m just promoting the hell out of the products,”
Jaffa Salads is a relatively new Midwestern regional supplier of vegan, kosher clean ingredient hummus, baba- ganoush, tahini, guacamole, salsa and Moroccan matbucha, and snack packs that
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