Meat + Poultry - November 2010 - 24

DELI OVERVIEW

Buddig Co.'s pre-packaged lunch meats
comprise a major part of their business.
The Old Wisconsin Sausage Co., which
Buddig also owns, makes deli and sausage
products. (Photo courtesy of Buddig Co.)

two-year supply of turkey, chicken or
beef in freezers, according to my prime
contact with suppliers," Buddig says.
"So food prices, including our deli
products, continue to go up. That's
also why we do a lot of private-label."
Concurring with the idea that price
outweighs brand when it
comes to deli products
is Alan Hiebert, education information specialist with the International Dairy-Deli-Bakery
Association, Madison,
Wis. "Our latest research
shows price is more imHiebert
portant than brand for
most deli shoppers," he says. "Since 94
percent of respondents to our survey
shop the full-service deli, 89 percent

"Food prices, including
our deli products, are
continuing to go up.
That's also why we do a
lot of private-label."
the self-service deli where items are
packaged by the deli department, and
86 percent shop the prepackaged selfservice deli, it's difficult to tell where
customer loyalty lies."
But Hiebert says the just-released
"What's in Store 2011" study indicates
private-label accounts for 28 percent
of deli sales, which puts it third behind dairy (40 percent) and fresh meat
(about 30 percent). IDDBA research
also shows the main reason for shopping at a self-service deli is probably
convenience rather than food safety.
Most respondents thought supermarket
deli food is fresher than packaged food.
Hiebert says in 2010, sales of some
higher-priced products went down, but
overall sales rose from $17.31 billion to
$17.92 billion, a 3.5 percent increase.
The deli department accounted for
3.2 percent of supermarket sales so far
this year, the same figure as last year.

In a down economy, supermarkets
are doing well as shoppers cut restaurant spending and buy more ingredients to eat at home. "But a little less
money doesn't necessarily mean more
time," he points out. "Many shoppers
are still looking for the convenience
that the deli offers. Parents are still
busy with their kids' after-school activities, which often interfere with
dinner preparation and family meal
time. And some shoppers are working
more hours for the same pay in hopes
of increasing job security," he notes.
Hiebert thinks consumer education is also keeping sales of premium
deli meats up, where the economy
should have slowed sales down. "If
[supermarket] associates can learn
about their delis' premium offerings
by tasting them, and if they educate
consumers by offering samples, they
may be able to help shoppers understand why premium meats and cheeses
cost more," he says. Turkey, ham and
roast beef have been the top three deli

24 * Meat&Poultry * November 2010 * www.MeatPoultry.com

meats for years, with sales of turkey
and ham three times what roast beef
is. Each of the three is growing slowly or nearly flat. For the year ending
June 30, Freshlook Marketing Data
reported in "What's in Store 2011,"
the only deli meat showing a doubledigit increase in sales was chicken,
growing 17 percent in sales dollars.
Today, supermarket shoppers
choose where to shop based on "perimeter departments" like the deli.
Hiebert says 30,000 supermarkets
have sales of about $18 billion and
there is little difference between grocery departments. "Research shows
perishable food departments are the
major reason shoppers choose their
primary stores. Shoppers look for
clean departments where the products
are fresh," he says. "They are willing
to buy larger quantities if they are
confident the products will stay fresh
when they get them home."

Changes over the years
Has the deli changed over the years?
"Yes, the biggest change is probably
in the prepared foods areas," Hiebert
says. Years ago, supermarkets offered
a very limited selection. A few years
ago, chains started hiring trained chefs
to develop prepared foods menus.
"Today, we see much more variety," he says. "We see made-to-order
meals for breakfast, lunch and dinner.
Shoppers can get Chinese food, sushi
or Italian food, with large comfortable seating areas," Hiebert notes.
He says on the meat side, delis
seem to be offering more brands.
Average department size is creeping
back up as new stores and remodels

http://www.MeatPoultry.com

Meat + Poultry - November 2010

Table of Contents for the Digital Edition of Meat + Poultry - November 2010