The dark days when fears of COVID infection left many consumers eager to get in and out of supermarkets as quickly as possible, and turned olive, antipasti and other food bars into silent deserts look to be behind us.
A deli revival fueled by the return of food bars is in full swing.
“Within the last year, retailers have reopened their bars and are getting back to normal,” says Giuliana Pozzuto, director of marketing at DeLallo, Jeanette, PA. “Recent figures show us just how excited customers are to engage again in the ‘food experience’ of shopping a bar—a destination that truly adds something to their in-store journey. Now, delis are hitting max potential sales with both packaged and bulk (food bar) programs in place and in full force. This omni-channel approach is the best way to achieve maximum sales in an ever-growing (and highly trending) category.”
George E. Delallo Co. began as an Italian market serving the working-class neighborhood of Jeannette more than 80 years ago and has since grown into a major, but still family-owned, importer, producer and distributor of specialty Italian and Mediterranean foods.
“The deli department remained an area of strength in February 2022,” says Jeremy Johnson, vice president of education for the International Dairy Deli Bakery Association (IDDBA), Madison, WI. “For the first time in many months, we did see a dollar sales decline for deli cheese versus February 2021. Importantly, inflationary levels for deli cheese were much lower than those seen for deli meat, entertaining and prepared foods. Additionally, several retailers reported having to close deli counters once more due to labor shortages.”
Softening of pandemic fears has been a boon for the deli, but the next great challenge could be the uncertain impact inflation will have on consumer attitudes.
The IDDBA teamed up with San Antonio, TX-based 210 Analytics to produce weekly analysis of changing trends in the deli and throughout the supermarket during the pandemic and restrictions on social interaction.
“At this time, inflationary levels have much greater impact on grocery shopping patterns than COVID-19 with 90% aware of the price increases and 96% of those extremely concerned, according to the Chicago-based IRI’s shopper research,” says Ann-Marie Roerink, president of 210 Analytics. “This compares to only 31% of people being extremely concerned over Coronavirus as of February 2022.”
Many of the deli trends that took hold or increased during the pandemic could continue, even if for different reasons.
Packaged grab-and-go products gained favor because they offered protection against contamination, but figure to remain strong because they are convenient.
Ingredients for meals prepared at home took off because restaurants were closed or unsafe but could continue because dining out is too expensive in inflationary times. And the increased popularity of healthy foods is an enduring generational trend that suits both pandemic and economic uncertainty and benefits the Mediterranean category.
“Forty five percent of shoppers stocked up on certain items in February,” says Roerink. “Twenty percent did so as they were concerned it may not be available during future trips and 16% because they believe prices may be higher during their next visit. In addition, 81.7% of meals in February were prepared at home. This remains well above the July 2021 low of 77%. Nearly one-third of Americans, 32%, expect that their financial situation one year from now will look a little or a lot worse than it does today, whereas 45% believe it will be the same.”
Inflation leads to both spurts of panic buying as well as a more cost-conscious attitude, and inflation may help the deli as a more affordable alternative than restaurants.
“In our February IRI shopper survey, we found that 90% of shoppers have noticed the price increases across the various grocery departments, and a whopping 96% of those consumers are concerned about it,” says Jonna Parker, Team Lead for IRI. “In response, 75% of consumers have already made one or more changes to their grocery shopping, up considerably from only 64% making changes in January 2022. Additionally, consumers are pulling back on restaurant visits. This is not as much because of COVID-19, but to save.”
Fine Dining During Inflationary Times
The deli profits in inflationary times by offering consumers ingredients for home-prepared fine meals customarily offered in restaurants.
During the pandemic, Delallo helped their retailer partners get through the crisis by finding ways to sell packaged versions of healthy foods that could not be displayed in open food bars, and by promoting meal ingredient and recipe combinations for consumers who cooked at home with restaurants closed.
“It turned out to be an opportunity to expand the overall business of olives, antipasti and charcuterie complements for many retailer deli departments,” says Pozzuto. “This adjustment opened the doors to either enhancing their existing packaged programs or to create new and more robust packaged programs. It really showed many of us all just what their deli department could do. We worked alongside our retail partners to innovate, plan and execute packaged programs that kept customers satisfied.”
Even with most restaurants reopened, inflation may convince consumers to economize by preparing their fine meals at home.
“A huge consumer trend that we have noticed at Kayco Beyond over the last two years is that more people are cooking at home than ever before, and it seems this trend is here to stay,” says Mike Stamper, general manager at Kayco Beyond Business, Bayonne, NJ. “We’ve also noticed a huge trend towards health-focused, plant-based foods and individuals wanting to better care for their bodies and keep their immune systems in tiptop shape.”
Kayco Beyond, the merger of Kedem Foods, Kenover Marketing and B&W Foods, is the leading Kosher foods distributor in the country. The company’s diverse portfolio of products includes Mighty Seasame, a tahini sauce from Ethiopia.
“Mighty Sesame is all about transparency when it comes to our 100% natural, simple ingredients (only one to be exact) and that it is grown sustainably in Ethiopia. Retailers can best convey this with shelf displays that call out product attributes,” says Stamper. “By communicating why Mediterranean foods are essential to a healthy lifestyle, delis can showcase Mediterranean foods and their attributes while having a variety of easy-to-use items products for use and purchase.”
For the Health of It
One trend that increased during the pandemic, and should remain prominent, is the popularity of foods and ingredients perceived to be healthy.
Growing consumer interest in healthy diets helps Mediterranean foods because it includes plant-based proteins and oils that are better for you.
“When it comes to private consumers, the awareness of healthy food and healthy lifestyle has increased,” says Ehud Soriano, olive oil quality consultant for Sindyanna of Galilee. “Products from the Mediterranean Basin, which are known for their health benefits, are a ‘must have’ right now, and will be even more in the next years. The Coronavirus brought more people than before to the importance of healthy lifestyle and healthy food products. In that sense, Coronavirus brought forward olive oil consumption daily as part of a healthy and balanced diet. I think that awareness of consumers of healthy products will allow the deli sector to expand even more. We will see special sections of healthier products in the supermarkets.”
Sindyanna of Galilee is a cooperative of Arab and Israeli women who sell their prize-winning olive oils, herb mixes and honey through Amazon, Fairway and Whole Foods Markets in the Northeast, and fair-trade groups like Ten Thousand Villages and Dr. Bronner’s Magic Soap.
They offer cold-pressed olive oil in varieties labelled “extra peaceful,” “extra hopeful,” “extra positive” and “extra unified.”
Along with prize-winning olive oil, the company sells hope, and the combination appeals to many Christian and Jewish consumers shopping for gifts.
Ohio-based Lakeview Farms entered the Mediterranean market in a big way by acquiring Tribe Mediterranean Foods, Inc. as part of its expansion in the late 1980s, when they also acquired Flan Rico Confectionery Inc. and Luisa’s.
“We are pushing the Tribe Medley dips with feta cheese and hummus,” says Greg Klein, chief marketing officer at Lakeview Farms, Delphos, OH. “Retailers have realized they should have less of an assortment and focus on their top brands.”
Tribe offers a variety of hummus products including black bean, dill pickle, spicy buffalo style, yellow lentil, sriracha carrot, spicy red pepper, and sweet dark chocolate, sea salt caramel, and pumpkin spice.
“Mediterranean dips have a unique taste, and the perceived healthy nature of the diet gives them a halo,” says Klein. “The flavors and textures of the olive and tahini dips are also popular.”
Steve’s Mediterranean Chef has introduced four traditional hummus flavors: Original, Roasted Red Pepper, Garlic and Jalapeno, which can be found in select retailers throughout the Midwest and are in the refrigerated dips of the deli.
Garbanzos went mainstream as the main ingredient in hummus, but this protein-packing legume is still spreading its wings.
The rise of chickpeas topped Whole Foods list of Top 10 Trends for 2021 as the core ingredient in Mediterranean superstar hummus is also showing up in chickpea tofu, chickpea flour, and even chickpea cereal.
Archer Daniels Midland (ADM) placed the search for beneficial ingredients at the top of its list of five food trends for 2021.
“The global health crisis has changed consumer preferences in new and unexpected ways,” says Vince Macchiocchi, ADM president for nutrition. “We are seeing a heightened demand for foods and beverages that support immune systems.”
Macchiocchi made his remarks to the IDDBA for its What’s in Store 2021.
Consumption of plant-based meats is growing faster than animal-based meats as COVID health extends a trend already established among younger consumers.
More than a third of meat-eating Millennials eat four or more plant-based dinners a week, according to What’s in Store, and 65% of Gen Z consumers find plant-based foods appealing.
Walnut, pumpkin seed and sunflower oils are competing with olive oil as healthy alternatives for salad dressings or cooking, according to the Whole Foods Trends list.
Deli service counter salami sales topped a quarter billion dollars in the year ending Oct. 3,2021, according to IRI data, and delis sold more than $400 million in feta cheese in the year ending Oct. 3, 2021, according to What’s in Store.
But the time is right to emphasize the role many Mediterranean foods can play in the healthier, plant-based diets that have gained favor.
“Think beyond just meats and cheeses,” advises Pozzuto. “Plant-based eating and foods are trending and so creating a well-rounded Mediterranean destination is vital: olives, crisp pickled vegetables, marinated artichokes, mushrooms, peppers, bruschettas, tapenades and fruit spreads.”
A variety of plant-based Mediterranean ingredients are staples for healthy cooking.
“Staples in the kitchen are definitely olive oil, tahini, spices and seasonings, which is why the new Spicy Harissa Squeeze and Serve Mighty Sesame Tahini fits perfectly,” says Stamper. “Mighty Sesame Tahini can be used for many recipes, most famously hummus, but because of how creamy and drizzle-worthy it is, it goes great on sandwiches, salads and dips. Our Mighty Sesame squeeze and serve Organic Tahini is Mediterranean in origin, made from one single ingredient, organic roasted hulled whole sesame seeds, is vegan and sustainably grown in Ethiopia, which is known for growing the best sesame.”
Many delis responded to the pandemic by selling packaged products that offer protection against contamination.
This rise in grab-and-go options may be with us for a while because they also give the consumer the convenience of quick in and out and helps the deli cope with labor shortages.
“Hand-in-hand with value-added solutions in meat and poultry and sides available in the meat department, anything that saves people time and provides an easy meal solution is doing very well throughout the store,” says IRI’s Parker from IRI. “Grab-and-go and pre-sliced have been successful strategies long before the onset of the pandemic and in February 2022 grab-and-go sales surpassed service cheese. However, the largest seller was specialty cheese, reaching $363 million.”In the third quarter of 2021 deli grab-and-go cheese was up 21.2% over the previous year, and pre-sliced cheese was up more than 10%, according to IDDBA’s What’s in Store.