Shoppers are replacing quick restaurant meals with retail foodservice options.

Gone are the days when supermarket shoppers had to choose: Buy groceries to cook for dinner or make a second stop at a restaurant for a ready-made meal. Today, customers who enter a food store to buy milk and bananas can walk out with lunch, dinner, and even breakfast in their cart.

And they do. Nearly three-fourths (70.7%) of households purchased deli-prepared foods at least once during the 52 weeks ending Oct. 7, 2023, according to The Power of Foodservice at Retail 2023, published by Arlington, VA-headquartered FMI — The Food Industry Association.

The report also revealed an annual deli-prepared purchase frequency of 9.8 occasions; $8.38 spent per transaction, up 6.3%; and yearly dollars spent per buyer of $82, up 7.2%, based on NIQ (NielsenIQ) Retail Measurement Services and NIQ Product Insight data.

Compared to a year ago, 25% of consumers said they replaced quick-serve and fast casual restaurant meals with foodservice at retail, up from 17% the year prior.

“We know that today’s customer values convenience, so we make it easy for them to select from a variety of high-quality, ready-to-eat and ready-to-heat options that are comparable to restaurants,” says Hannah Herring, media relations manager for Publix Super Markets Inc., a 1,438-store chain based in Lakeland, FL.

What’s most exciting is the opportunity to sell more fresh produce in the supermarket’s retail foodservice sector.

Publix is a great example. Grab-and-go leafy salads in the retailer’s prepared foods deli include a chef salad with romaine, grape tomatoes and shredded carrots; a strawberry glazed pecan salad; and a salmon salad with spring mix, grape tomatoes, diced cucumber, and diced red onions. Hot foods all include a variety of sides to choose from, including veggies.

SUPERMARKET DINING DRIVERS

Many top retailers set their sights on providing restaurant-quality foods years ago, says Maeve Webster, president of Menu Matters, a food industry and menu consulting firm based in Arlington, VT.

“During the pandemic, retailers recognized the opportunity to grab share from foodservice operators. It opened many opportunities for them to capitalize on that earlier work.”

It’s mind-boggling to realize how much retail foodservice operations have stepped up their game in recent years, adds Kristy Babb, director of communications for the Folson, CA-based North American Blueberry Council (NABC).

“Retailers who once offered just premade sandwiches and rotisserie chickens now have hot bars, cold bars, sushi stations, meal kits, made-to-order delis, and even restaurant-style kiosks, offering a variety of creative cuisines that can be enjoyed onsite in comfortable dining areas or taken to go.”

This growth and evolution ties back to the convenience and affordability shoppers are looking for, says Rick Stein, vice president of fresh foods for FMI — The Food Industry Association. “Plus, if you combine this with shoppers’ growing need for options that meet their health and well-being needs, there is a clear opportunity for produce in the foodservice departments.”

BENEFITS OF PRODUCE IN RETAIL FOODSERVICE

Adding more fresh produce in retail foodservice can grow total store produce sales and increase consumption by attracting a different customer base, says William Goldfield, director of corporate communications for the Dole Food Company, in Westlake Village, CA.

“Lettuces and greens are always popular. All fruits and vegetables that can be eaten raw as part of a salad bar — broccoli, cauliflower, carrots, celery — are both easy and remain appetizing,” Goldfield says.

Fresh produce items that are difficult to prepare, such as pineapple chunks, spears and rings, are commonly used in retail foodservice due to their convenience, he says, adding quad packs are also popular for foodservice customers who need large quantities without purchasing a 40-pound box.

Fresh fruits and vegetables can enhance retail foodservice offerings in four ways: providing a healthy halo, creating restaurant-quality selections, differentiating retailers from the competition, and boosting sales in the produce department.

A HEALTH HALO. The produce section is one giant freshness and health cue, according to Mike Kostyo, vice president of Menus Matter.

“Restaurateurs must work hard to showcase that products are fresh,” says Kostyo. “A supermarket has an entire space filled with fresh produce right in the market itself. Those freshness cues are right there.

“Retail foodservice operators should lean into this even more. For example, offer up salad bowls that feature ‘the freshest, ripest produce selected by our expert team from just a few feet away.’”

Specific produce items, such as blueberries, can add a health halo. Seventy-two percent of consumers surveyed believe blueberries make dishes healthier, 64% think they make a dish taste better, and 62% believe they make the item seem fresher, according to the U.S. Highbush Blueberry Council’s 2021 Patron Study.

Healthy and fresh are the foodservice trends at Gelson’s Markets, a 27-store upscale chain headquartered in Encino, CA, says Paul Kneeland, senior vice president.

“On the taste front, the items must be flavorful and refreshing. Seasonal items are also immensely popular,” says Kneeland.

One new offering is a tree fruit salad that Gelson’s executive chef developed using Dolce Vida fruit from Giumarra, he adds.

“We have window clings in foodservice cases that state our salads are made with the same fresh fruits and vegetables available in our produce department.”

Some Gelson’s locations also offer a Build Your Own Poke Bowl, with the retailer’s signature ahi poke. Produce toppings include avocado cubes, chopped green onions, and sliced serrano chiles.

RESTAURANT QUALITY OFFERINGS. Consumers want to see inspired applications for fresh fruits like blueberries and will pay for them, which is a win both in terms of menu appeal and margins, says NABC’s Babb.

“Fifty-nine percent of consumers want to see more adventurous and innovative menu applications featuring blueberries, and 56% want to see them in savory lunch and dinner applications like brisket sandwiches, burgers, and even pizza,” says Babb.

Another fruit consumers would like to buy in more menu applications is watermelon.

“Fifty-eight percent of consumers said watermelon isn’t menued enough,” says Megan McKenna, senior director of marketing and foodservice for the National Watermelon Promotion Board (NWPB), in Winter Springs, FL, citing the September 2023-released report, Watermelon Attitudes and Usage in Foodservice, researched by Menu Matters on behalf of the NWPB.

“In foodservice at retail, we see the basic watermelon and feta combo shining through on the cold bar or for grab-and-go,” says McKenna. “I would love to see retailers, especially those who do their own fresh-cut, utilize the rind in their coleslaws or even do a quick pickle.”

Retail foodservice is still playing it relatively safe when it comes to featuring fresh produce, compared to what’s found at restaurants or even in the center aisles. However, Menu Matters’ Webster says the most innovative retailers are beginning to pull in less familiar products, including lemongrass, a wider variety of peppers, okra, papayas and mangos.

According to Daniel Spellman, director of marketing for the National Mango Board, in Orlando, FL, mangos are used in retail foodservice in a variety of dishes, such as salads, salsas, smoothies, and desserts.

“One of the most significant opportunities for fresh mangos in retail foodservice lies in culinary innovation,” says Spellman. “For instance, recipes featuring mango avocado toast or mango-infused beverages can draw attention. To capitalize on this opportunity, the National Mango Board is helping, developing, and promoting unique mango recipes.”

Don’t think of produce as its own category for menu R&D, think of it as part of menu R&D, recommends Amy Myrdal Miller, MS, RDN, FAND, founder and president of Farmer’s Daughter Consulting, in Carmichael, CA.

“Consider items that pair well with produce and drive interest in buying and eating more produce. The classic summer item is fresh mozzarella or burrata with ripe tomatoes and fresh basil. It’s simple, approachable, and beloved by many.”

POINT OF DISTINCTION. There’s nothing like pulling shoppers in the door by offering something competitors don’t. Fruits and vegetables in prepared foods can do this. An example of a unique concept is the Guac Heaven guac bar concept rolled out by Irving, TX-based Avocados From Mexico (AFM) at the National Restaurant Association Show in May.

“The No. 1 use of avocados is for guacamole, and most foodservice operators think of guacamole only in Mexican cuisine, but it’s much more versatile,” says Stephanie Bazan, senior vice president of commercial strategy and execution for AFM. “To show that, we set up a guac bar with over 50 different toppings, including mangos, strawberries, pineapple, nuts, pepitas, goat cheese, gorgonzola cheese and spicy wontons. It’s a concept that can work in retail, especially as an extension of an in-house made guacamole program.”

BOOST PRODUCE SALES. When avocados are used in retail foodservice, it shows examples of how the fruit can be used in dishes at home, says Terry Splane, vice president of marketing for the Irvine, CA-headquartered California Avocado Commission. “This can encourage shoppers to pick up the ingredients in the produce section on that trip or the next.”

According to Menu Matters’ Webster, retailers are missing out on cross-promoting from retail foodservice to other store areas like the produce department.

“This would be particularly effective for unique produce, trending produce, or new produce. The foodservice activities can help educate, inspire, and excite consumers to purchase products in dishes featured in the foodservice area.”

PROCUREMENT — WHO & WHAT

Who purchases fresh produce for retail foodservice varies by retailer and volume, says Bazan. “Foodservice deli staff can pull from the retail stock, which helps manage shrink. Or, if the volume is large enough and you don’t want to touch the retail inventory due to the velocity of sales, then the purchase may be through a foodservice category manager. Or, if high enough volume, it could come from offsite commercial kitchens.”

As a whole fruit seller, says Peter Shore, vice president of product management at Calavo Growers Inc., in Santa Paula, CA, “we usually just sell to one buyer at the retail level. Foodservice at retail is an important piece of our business.”

An advantage of separate retail and foodservice purchasing is the differing forms and portion sizes needed to accommodate both departments, says FMI–The Food Industry Association’s Stein.

At Gelson’s Markets, the foodservice buyer and the produce buyers collaborate on purchasing fresh fruits and vegetables for foodservice, says Kneeland. “Vendor partners that offer both commodity products and cut products are extremely important to our business.”

A team of category managers and buyers oversee the procurement of fresh produce at Publix Super Markets, says Herring. “The advantage of overseeing the purchasing allows us to form a relationship with the growers and their families who manage the quality and availability of products. This helps us procure a variety of high-quality, high-flavor products, and it allows one-on-one conversations to understand market fluctuations, supply, and crop conditions, as well as continued learning about the produce we source.”

For any buyer of fresh produce for retail foodservice operations, Myrdal Miller recommends reviewing the resources made available by commodity boards, marketing orders, and grower-shippers.

“Entities like Potatoes USA, the California Strawberry Commission, CA GROWN, and Duda Farm Fresh Foods have amazing resources and recipes for foodservice operations,” she says. 

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DEMAND FOR VALUE-ADDED PRODUCE IN RETAIL FOODSERVICE

Like restaurateurs, retail foodservice benefits from labor-saving solutions, such as fresh-cut fruits and vegetables.

“We have had more and more requests for fresh-cut ingredients for prepared foods departments and in-store meal assembly,” says Bryan Patmore, director of retail sales at Baldor Specialty Foods Inc., Bronx, NY.

That’s why Baldor introduced its “Fresh Cuts” service/product, where it does all the washing, peeling, cutting and packaging of fresh produce in-house and sells it to customers.

“This way, customers don’t have to prepare food in-house and can use their labor elsewhere,” says Patmore.

The Dole Food Company, in Westlake Village, CA, has long been a vegetable grower and foodservice supplier. Now, the company is expanding to become a nationwide supplier of fresh-cut pineapple, offering both conventional and organic options. Additionally, Dole’s Single and Quad packs for bananas have shown success in retail, providing convenient options for foodservice operations.

“The singles pack in bananas helps retailers who sell bananas by the ‘each’ instead of by the pound. It offers 150 fingers per box, which is about 50 more than a standard box of cluster bananas, providing excellent value for retailers and allowing for a lower price point,” says William Goldfield, Dole’s director of corporate communications.

Taylor Farms’ new “Perfect Fit” whole leaf product is ideal for the deli kitchen program, says Michelle Roberts, director of foodservice marketing for the Salinas, CA-headquartered company, which also offers foodservice operators other labor-saving solutions with fresh produce such as cut fruit, grab-and-go meals, snacks, single-serve salads, comprehensive salad kits and heat and serve recipes.

“This washed and ready-to-use leaf offers consistent round sizing and a crisp, fresh flavor appeal with 100% yield of usable leaves in every 1- or 2-pound bag,” Roberts explains.