Volatility in the food market generated by the pandemic continues to be evident in essentially all segments from farm to fork. One of the most evident places where the negative impact is being felt is in the supermarket deli departments.
“Sales volumes in delis during the second quarter in 2020 dropped by 75% or more for many, if not the vast majority, of chains,” says Tom Super, senior vice president of communications, National Chicken Council, Washington, D.C. “The challenge to return to normal is ongoing with recovery uneven and uncertain.”
He adds that with more food shoppers being mission driven to get in and out of the store, the deli department, which heavily relies on customer interaction, the opportunity to add a deli product to the shopper’s basket becomes a bit more difficult.
“Coupled with that challenge is the significant increase in customers having store employees doing the shopping for them,” says Super.
Yet, chicken checks all the boxes when it comes to what today’s consumers are seeking—a healthful product that is a convenient meal option with widespread appeal.
“U.S. agricultural animal producers are dealing with higher feed costs and the potential for these costs to not be lessened until bumper grain and oilseed crops are harvested this fall,” says Super. “Chicken is the most efficient converter of feed to meat, and that advantage gets passed on to chicken consumers.”
When looking at the chicken segment in supermarket delis, it has to be put into the context of the pandemic due to its wide-reaching impact.
“Since March, many retailers have pulled back on merchandising areas like wing bars, and that has hit wing sales as hard as you would expect,” says Eric Le Blanc, director of channel marketing for grocery deli at Tyson Foods, Springdale, AR. “Tenders, on the other hand, have been the most resilient category in prepared chicken. Operational hurdles have been a factor in rotisserie and fried chicken production but we see more retailers gearing up for reclaiming that business. The form of the product has also been very important; prepackaged products have out-performed more traditional service point options.”
The number one driver of purchase intent and the number one driver of satisfaction is sensory, according to Le Blanc.
“That hasn’t changed and, in my opinion, it never will,” says Le Blanc. “What has changed from pre-Covid is that, along with these sensory concept is a new one—safety. Cleanliness has always been important, but safety has skyrocketed. The challenge for retailers is that the battle to build and maintain freshness perceptions is won or lost on a store by store basis–the hardest place to have control.”
Other challenges include labor, food safety and shrink.
There are a number of options with deli chicken programs.
“[There are] multiple sizes to meet individual supermarket deli needs – 1#, 1.5#, 2#, 3# and 4#,” says Dave Witter, manager, corporate communications, House of Raeford Farms, Rose Hill, NC.
Stores also are offering larger package sizes used behind the counter as an ingredient for offerings like chicken salad or as a topping for a ready-made lettuce or spinach salad. In addition, there are smaller packages sold directly to consumers for use as an easy ingredient to prepare a wide variety of meals.
There are a number of equipment options for supermarket deli chicken programs.
“Pressure fryers are the ideal equipment for fried chicken,” says Nikki Heaton, corporate chef at Henny Penny, Eaton, OH. “For roasted chicken, rotisserie ovens offer more theater-style cooking, and combi ovens are best for pure production.”
In the past, a big challenge was keeping up with the chicken demand.
“Groceries are faced with challenges of both keeping chicken coming in from their suppliers and having chicken prepared and ready for their customers when needed,” says Heaton. “Using the right combination of cooking and holding equipment can help significantly to meet customer demands with quality food.”
Regarding new products, almost one-half of consumers say they realize they don’t eat enough vegetables, according to a variety of survey reports and the National Chicken Council.
“An increasing number of companies are now offering products to address this need. In their line-up of frozen chicken products, you can find products that feature vegetables mixed-in with their patties, nuggets and similar,” says Super at the National Chicken Council. “It’s time delis consider offering successful versions of these chicken products, freshly-made hot and chilled entreés, hand-held items and snacks. Upscale chicken sausages that contain vegetables, fruits and/or exotic grains have done an outstanding job in the meat department.”
Sales volume of these products is large enough to justify an additional spot in the store.
“Offering chicken sausages in the deli department with an interesting selection, perhaps on a rotating basis, that combine appealing vegetables, fruits and healthy grains seems to be a logical move,” says Super.
With more time being spent at home and in the kitchen, a certain fatigue factor is creeping into the meal time.
“Launching new products during these times can, perhaps, be a bigger challenge, but the payoff for innovative new chicken products can generate an uptick in the deli business now and whenever normal returns,” says Super. “Pilot products and programs are efforts chicken companies are anxious to provide to their grocery customers.”
In terms of types of chicken, the drivers continue to be rotisserie, baked and fried.
“But the approach in these categories may be shifting somewhat to a ‘meal’ sell, rather than a ‘product’ sell,” says Le Blanc at Tyson. “These can range from very close-in programs, like two sides and rolls, or fresher options that tap into other perimeter departments (like produce) and even center store items.”
The jury is still out on flavors.
“On the one hand, limited time offer flavors have been very successful and incremental to the category in rotisserie chicken,” says Le Blanc. “Having said that, the king of rotisserie chicken offers one flavor. Roughly one quarter of all rotisserie sales are for ingredient use, and for this purpose, basic savory flavor is the most desirable. Spicy flavors have been around for a long time, but they continue to be relevant. Nashville Hot continues to be relevant in wings.”
While it is not really new, a number of retailers have added packages of fully-cooked pulled chicken to make the ingredient use of rotisserie chicken more convenient for consumers.
“Otherwise, COVID-19 times has been more about regaining lost momentum than about adding new wrinkles,” says Le Blanc.
Consumers appreciate the quality of deli meats and prepared foods; however, they have shied away from lines at the deli counter, according to Witter at House of Raeford Farms.
“Prepackaged sliced deli meats and cheeses as well as other convenience items such as hand-pulled chicken have gained popularity, offering the same high-quality products typically found only behind the glass,” he says.
Freshly-cooked rotisserie chickens are a mainstay of the supermarket deli and continue to grow in popularity.
“Consumers have found them to be a convenient and healthy meal option, as an entrée or used as an ingredient in their favorite chicken dishes,” Witter says.
Consumer-friendly packages of fully-cooked, hand-pulled rotisserie chicken that can be merchandised in the refrigerated case as well as used by the deli department in store-prepared salads and entrées are popular.
“They allow for increased SKU optimization, reducing shrink and labor, along with increased shelf life with the help of High Pressure Pasteurization,” Witter says.
D’Artagnan in Union, NJ, offers higher end chicken that is free range, humanely raised with birds that have a diet of real vegetables.
“We’ve seen huge growth in the [specialty chicken] category,” says the company’s founder Ariane Daguin. “It’s sold mostly on the rotisserie, and the price point is a bit higher. We offer a smoked chicken breast and chicken leg confit that is a slow cooked leg and thigh so ready to use. It is precooked, convenient and just needs to be warmed up.”
However, there are predominantly rotisserie chickens in the deli segment. And this meat can be incorporated into prepared food programs.
“If it is cold or hot, the options for a precooked chicken are endless,” says Henny Penny’s Heaton. “Add them to a soup or even in your tacos, it makes serving creative, quick meals at home much easier at the end of the day. Fried chicken also continues to be a primary seller for many delis.”
There are a number of options to keep chicken front and center in the department.
“Delis need to remind these home delivery and parking lot customers that in-store prepared deli foods provide great value, taste, convenience and family appeal,” says Super at the National Chicken Council. “In addition to the on-line menu and list of available products, stores need to feature click-on pictures of freshly-prepared dinner entrées, hot and chilled foods either as standalone or combo meals and deals.”
Providing complimentary products is key to building bigger baskets.
“[Options are] cross merchandising complementary products, offering consumers the opportunity to build their own meal kits and using fully-cooked proteins and other components from the deli conveniently merchandised together,” says Witter at House of Raeford Farms.
D’Artagnan does promotions in select stores and provides educational brochures on its products.
Heaton at Henny Penny recommends putting chicken front and center and lighting them up, and the smell alone markets them.
Digital communication will be an enormous part of this category’s growth going forward.
“Simply incorporating prepared chicken products into store pickup or delivery programs has not been transformational,” says Le Blanc at Tyson. “Using the digital platform to serve a more complete shopper journey that is focused on meal solutions and coordinated with in-store messaging will make a tremendous difference to the way we talk about, and the way the consumer thinks about, prepared chicken.”
It’s predicted that continued growth of prepackaged high-quality deli items, along with items that offer consumers convenient meal preparation options, will continue.
Foodservice is poised to try to regain what it considers to be its share of the food market, maybe even more.
“Delis now have an excellent opportunity to grow their sales volume and create good, on-going competition for the more traditional away-from-home food providers,” says Super at National Chicken Council. “The shop-for-me at the supermarket business may wane a bit when the pandemic is history but is certainly not going away. Delis need to make sure these shoppers are putting deli products in their online baskets, especially chicken products like entrées, salads, lunch meats, rotisserie chickens and parts, fried chicken (hot and chilled), soups, sandwiches, sausages, rollups, nuggets/patties, to name a few.”The opportunities to regain and expand the deli business are not endless but close to it. Featuring chicken in this effort increases the likelihood of success. DB