Reimagining the Border Outlets: Innovations in Dairy, Deli, and Bakery Industries
Grocery Retailers Embrace Cross-Merchandising for Convenient Meal Solutions
A recent report from 210 Analytics has revealed a surge in sales of breakfast items, such as croissants, doughnuts, and pastries, during the month of April. This trend is part of a wider shift in the grocery industry, as retailers increasingly focus on offering integrated, easy-to-prepare meal options by merging traditionally separate categories.
According to the Progressive Grocer's 76th Consumer Expenditures Study, more than two-thirds of shoppers have recently purchased prepared foods, with hot entrees being the most popular category. This emphasis on convenience and meal solutions underscores the ongoing battle for the consumer food dollar.
Cross-merchandising is at the heart of this strategy, with grocery retailers combining chef-prepped entrées with fresh-baked breads and artisanal cheeses to create daypart-ready meal solutions. This approach encourages shoppers to purchase multiple items suited for quick meals or snacking occasions, effectively combining convenience with quality and artisanal appeal.
Eco-friendly and premium packaging innovations in bakery products are also rising, including minimalistic and visually appealing box styles that enhance product presentation and support e-commerce sales. This elevates the perceived value of bakery items often cross-merchandised with deli and dairy products for meal solutions.
Value and transparency in related fresh categories such as meat, which are important for deli sections, cater to consumers’ demand for consistent pricing, convenience, and premium quality. This supports cross-merchandising by offering straightforward meal components that shoppers can trust and easily combine with dairy and bakery items.
Connected shopping experiences integrating digital discovery and personalization also underpin modern merchandising strategies. Stores can highlight related products across departments and foster loyalty through coordinated offers and meal ideas across dairy, deli, and bakery.
Rick Stein, VP of fresh foods at Arlington, Va.-based FMI - The Food Industry Association, states that food retailers and suppliers aim to provide shoppers value beyond just price and quality, offering experience, relevance, and convenience.
Some retailers opt to use paper/digital coupons instead of physically moving merchandise to overcome operational hurdles in cross-merchandising displays. Anne-Marie Roerink from 210 Analytics cites the ongoing popularity of charcuterie as an opportunity for cross-merchandising in the bakery and deli departments.
Shoppers are finding more complementary and cross-promoted offerings in the dairy, deli, and bakery sections. Prepared foods sold in the deli area are filling the gap for consumers who are dining out less frequently, with dinner, lunch, and even breakfast emerging as key opportunities.
According to FMI's "Power of Foodservice at Retail" report, nearly one-third of consumers noted that they're dining out less frequently and turning to grocery stores for convenient meal solutions. SpartanNash is one retailer working to deliver such options, including at its recently refreshed Family Fare stores in Michigan.
The focus is on providing solutions across dayparts and occasions, including prepared or nearly prepared meals and offerings for recipes and snacking. Co- and cross-purchase data provides insight into many questions in food retailing, such as the high cross-purchase between eggs and bacon, sliced cheese, hamburgers and buns, or pie and whipped cream.
Retailers can drive a bigger ring by putting whipped cream next to or near pies for even more households to purchase whipped cream with their pie, or for others to purchase a larger size. The perimeter of modern grocery stores is being softened to better cater to shopper needs, creating a more rounded approach.
At The Fresh Market store in Algonquin, Ill., shoppers can find a large case of ready-to-cook meal solutions and a nearby case filled with portioned cheese and pre-made dips and spreads. Success in these areas is based on execution, with items needing to be compelling and visually appealing.
Recreating a menu-like experience where visuals, cross-merchandising, or recipes conjure up a meal in people's mind is powerful in driving a full-basket sale. The Family Fare remodels are designed to cater to the question of "What's for dinner tonight?" with a focus on fresh, ready-to-enjoy meal solutions. According to Anne-Marie Roerink, principal at San Antonio-based insights firm 210 Analytics, success in these areas is based on execution, with items needing to be compelling and visually appealing.
- In response to the trend of dining out less frequently, retailers like SpartanNash are focusing on providing meal solutions, such as ready-to-cook options and pre-made dips, in their deli and bakery sections.
- To create a menu-like experience and drive full-basket sales, stores like The Fresh Market have large cases of ready-to-cook meal solutions and nearby cases filled with portioned cheese and pre-made dips and spreads.
- The cross-merchandising strategy of combining chef-prepped entrées with fresh-baked breads and artisanal cheeses in grocery stores, as seen at Arlington, Va.-based FMI, aims to offer shoppers not only convenience but also quality and artisanal appeal. This enhances the perceived value of bakery items often cross-merchandised with deli and dairy products for meal solutions.
