Bread Ups Delis’ Ante

Incorporating bread in the department properly can lead to increased register rings.

Today’s delis may be missing out on a key category that can bring a lot to the mix—bread. Although not without its challenges, it is a natural fit for sandwich fixings, as a meal component and can even be posi- tioned as a snack with spreads, meat and cheeses.

According to the Madison, WI-based International Dairy Deli Bakery Association’s (IDDBA) 2019 What’s in Store report, bagels and muffins, in particular, experienced sales growth recently.

While bread with clean labels has come to the forefront, so has the prevalence of cross merchandising in the deli, according to the report.

There are definite staples in the deli ver- sus other areas of the store.

“The most common breads have always been your sandwich staples—white, wheat and rye,” says Paul Baker, co-founder of UK-based St. Pierre Groupe Ltd. “However, in recent years, there has been a growing demand for expanded options like artisanal rolls, sourdough, brioche, different kinds of seeded breads as well as options that appeal to the health-conscious con- sumer like gluten-free breads and wraps.”

There’s no disputing that selling bread in the deli encourages impulse purchases.

“It offers the shopper the added convenience of having everything in one place, so they can pick up their deli meats, bread and condiments without running around the store,” says Baker. “As a brand, we’ve seen a major uplift in sales if a retailer stocks us in both the bakery area and the deli. It expands opportunity for awareness and impulse purchases.”

Deli vs. Bakery

Ethnic breads, including pita, flatbreads, wraps and naan/tandoori, have become popular deli items.

“Like deli meats, cheeses and spe- cialty items sold in the deli department, the breads in the deli are perceived as fresher and more exciting than those sold in the grocery aisle,” says Karen Toufayan, vice president of marketing and sales at Toufayan Bakeries, based in Ridgefield, NJ. “They tend to appeal to a more discrimi- nating group, since many healthier breads, such as organic, gluten free, sprouted grains, etc., can be found there, as well.”

Many breads in the deli cannot be found in the grocery aisle in most stores.

“I see a lot of panini, pita, long and round rolls and specialty bread like rye and pum- pernickel, in the deli department,” says Warren Stoll, marketing director at Kontos Foods, Inc., located in Paterson, NJ. “When dealing with most retail accounts, buying departments have exclusivity, because retailers get a higher margin in the perimeter of the store.”

Although the majority of Kontos’ breads are found in the grocery aisle, retailers can put a free-standing unit in the deli to get a premium price.”

“But you can’t just decide to bring gro- cery items to the deli,” he says. “Once it’s set up, you’re locked, and they’re set up differently.”

The deli also is the place to find a blend of utilitarian staples, such as kaiser rolls and sub rolls, demi loaves and club rolls, along with more ethnic varieties. “It is a great area to test new items,” says James Viti, vice president, sales/marketing/product development, DeIorio Foods, Inc., Utica, NY. “Successful deli introductions not really found in the bread aisle include naan, ciabatta, gluten free rolls, etc.”

In addition, this area of the store pro- vides the potential for higher bread rings.

“I think consumers tend to explore more in the deli area, mixing and matching meal ideas,” says Viti. “This lends itself to increased impulse purchases. Like a good bakery area, the surroundings go a long way in enticing new ideas for consumers walking through to purchase their standard items.”

Today’s Trends

Today’s consumers have come to expect a variety of options when it comes to supermarket deli bread.

“Trends like artisanal sourdough, bri- oche, fancy seeded breads, ciabatta, rolls, wraps and gluten-free options are becom- ing more popular in the supermarket deli,” says Baker at St. Pierre Groupe. “Simple labels and natural ingredients have also become the go-to choices for many shop- pers today.”

Cleaner ingredients have been one of the biggest influencers in bread. “Consumers want to know their bread is natural and free of artificial ingredients,” says Baker. “More and more consumers read labels and look for buzzwords like ‘gluten-free,’ ‘non-GMO’, ‘natural’ and ‘zero trans fat’.” Due to growing popularity and health conscious consumers, gluten-free bread and wraps are more commonly available.

St. Pierre Groupe is planning to launch new product brioche products, like Sesame Seed Brioche Burger Buns and Brioche Sub Rolls, later in the year.

In addition to more ethnic breads coming online in delis, there has been an increase in specialty health breads that are gluten free, organic or made with sprouted grains.

“The broad appeal of gluten free has actually allowed the segment to grow, pro- viding consumers with a bread option they can feel good about eating,” says Toufayan. “For example, Toufayan’s gluten free wraps are one of our most popular products, lead- ing our strong growth in the category. We also find it as one of the most sought after products in our e-tailing efforts.”

In addition to healthy entries like its gluten free line, and Low Carb Smart Pockets, which combine the convenience of the company’s Smart Pockets pita bread with the benefits of a low carb product, Toufayan Bakeries has seen much success with its new ethnic breads like naan- and tandoori-style flatbreads.

“Supermarket deli sections are like walk- ing into a classic, traditional deli,” says Stoll at Kontos Foods. “Not only can consumers purchase meat by the pound, but they also can buy ready-made sandwiches, and the service is similar to a typical restaurant deli.” He adds that the prevalence of hand-held food has increased due to its convenience for busy consumers.

Kontos Foods recently introduced a two-piece bread in a bag that can be easily heated in the oven.

“This is similar to the in-home kits from companies like Hello Fresh and Blue Apron,” says Stoll. “Stores can take the same type of bread and keep it on a ready- to-eat basis.”

With the growth of gluten free, there have been higher quality bread products in recent years.

“Although we don’t have a gluten free offering, we do have wraps, and the demand for these is definitely growing,” says Stoll. “Our Greek Lifestyle line offers half the carbs and twice the protein with less sugar and calories than the average flatbread, which is a big innovation.”

Kontos Foods also launched its Rustics collection artisan bread, which mimics what artisan is. The two pieces of bread are in a heat-sealed bag with a zip lock for reclosing. This provides a 30-day shelf life.

As for innovations, Viti at DeIorio Foods says the introduction of cleaner labels that don’t sacrifice shelf life have enhanced the bread category.

“Also, there are increased offerings for health conscious consumers who may have formerly passed through the deli,” says Viti. DeIorio Foods is focusing on providing plant-based flatbreads and breadsticks that offer unique flavors as well as the health benefits of plant-based nutrition.

Successful Selling

Freshness and shelf-life are always a challenge when it comes to offering a vari- ety of bread.

St Pierre Brioche is frozen when it’s shipped to the retailer, thawed and then put on the shelves to ensure optimal fresh- ness and a longer shelf life. Streamlining the options and only offering a few bread choices can also help cut down on waste.

Promoting different breads each week can encourage trial.

“Consider promoting a unique sandwich offering with a different bread and creative fillings each week,” says Baker. “There’s also the opportunity to merchandise bread near the deli counter with recipes and deli bundle promotions to encourage trial. “

The convenience factor continues to influence purchase behavior, so any kind of promotions and bundle discounts can help drive sales.

“There’s an opportunity to bundle deli meat with a loaf of bread for a discounted price or buy one get one free promotion,” says Baker. “For example, the promotion could be buy 1 pound of ham and 1 pound of turkey and get a loaf of bread for a dollar.”

There’s also the opportunity to encourage sales with recipes and shelf danglers that drive sandwich inspiration.

“Seasonality can also be a great way to cross merchandise bread throughout the year,” says Baker. “Football season, for example, is a great time to showcase sandwich inspiration and recipes while merchandising bread and condiments next to the deli counter.”

Toufayan has an extensive direct store distribution system to insure that fresh product is always on the shelf as well as a freeze/slack program allowing retailers to self-manage the freshness of the prod- uct on the shelf based on movement in the stores. While returns have always been part of the business, this has not been a major issue for Toufayan who, along with its retail partners, manages inventory and orders, balancing store needs to minimize out of stock issues.

“If the retailers’ sandwich destinations allow consumers to feel it’s an up-to-date location for a healthy and adventurous eat- ing experience, it should be successful,” says Toufayan. “Thus, including some of the recently introduced healthy breads and some of the newer ethnic bread varieties like naan and tandoori, along with the sta- ple sandwich items, should help drive traffic and increase velocity. In-store signage of these newer items will also help create awareness and stimulate impulse sales.”

Stoll at Kontos Foods recommends increasing visibility with glass walls and incorporating bread as part of the deli’s meal solutions.

“Customers should be able to walk into the deli and see what’s there to put together a whole meal,” he says.

With today’s carb counting, there’s no disputing bread can be one of the more challenging categories, especially in the deli department. Yet, it still remains a staple component to the American diet.

“And while some consumers are choosing to remove bread from their diet altogether, I think the demand for bread isn’t going anywhere,” says Baker. DB