Prepared Foods and Ready-to-Eat Foods at Retail: The New Competition to Foodservice

Jul 1, 2010
208 Pages - Pub ID: LA2694891
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Hoping to parlay recession-based foodservice-to-retail migration into long-term gains, food retailers continue to ratchet up their prepared foods and ready-to-eat programs. Packaged Facts estimates that grocery stores and supermarkets will grow prepared- and ready-to-eat foods sales by more than 7% in 2010. Their usage imprint is already imposing:

According to Packaged Facts’ proprietary consumer research, 64% of adult consumers have gotten ready-to-eat/heat-and-eat food from a grocery store or supermarket in the last month. Moreover, in terms of total usage occasions, grocery-related prepared foods use leads both family and casual restaurant segments and trails only fast food/QSR.

While convenience stores have also relied heavily on prepared foods and foodservice sales for sales and higher margins, increasing competition extends to supercenters, warehouse clubs, convenience stores and drug stores. At a time when food value is so closely associated with low cost and convenience—and when consumers increasingly perceive private label food retail brands as competitive with name brands on cost and quality—prepared and ready-to-eat foods programs that deliver on quality, taste and convenience can not only compete with foodservice fare, but can also help food retailers adapt to modern consumer lifestyles.

Packaged Facts’ new report, Prepared Food and Ready-to-Eat Foods at Retail: The New Competition to Foodservice offers the foodservice and retail industries new insight into the highly competitive prepared and ready-to-eat foods space. Relying heavily on proprietary consumer research analysis, the report provides “consumer drilldowns” and psychographic profiling, offering foodservice operators and retailers unique access to the minds of prepared foods consumers.

And by assessing the relationship between fast food, family, and casual restaurant attitudes and behavior with that of grocery store and convenience store prepared foods attitudes and behavior, this report also offers unique competitive analysis to help players align and differentiate their product offerings.

The report also include in-depth store audits of prepared foods programs at leading supermarket, supercenter and warehouse/club store players, providing on-the-ground analysis of store formats, food prices, food types and menu items, placing access to competitive platforms at participants’ fingertips.

The report also includes segmented sales of supermarket deli prepared foods, as well as a host of macroeconomic metrics tailored to maximize understanding of how prepared foods fits into the bigger picture.

Data related to consumer demographics, attitudes and behaviors is derived from two sources:

Packaged Facts’ proprietary consumer survey, an internet-based survey comprised of random sample of 1,881 consumers who in aggregate represent a statistically accurate cross-section of the U.S. adult population (age 18+). The survey was fielded in February 2010.

The Experian Simmons National Consumer Survey, a booklet-based survey of a large and random sample of consumers who in aggregate represent a statistically accurate cross-section of the U.S. adult population (age 18+). We analyze results from its Fall 2007, Fall 2008, and Fall 2009 surveys.

Report data is also derived from thorough analysis of a host of sources, including the following:

  • Proprietary company interviews
  • The U.S. Census Bureau
  • The Bureau of Labor Statistics Consumer Expenditure Survey
  • The U.S. Department of Agriculture
  • The U.S. Securities and Exchange Commission
  • The Bureau of Labor Statistics Retail Trade Survey
  • Company earnings calls
  • Company presentations
  • Trade associations and trade magazines
  • Academic journals
  • Industry conferences
  • Restaurant menus
Our sales analysis features data provided courtesy of the Perishables Group and relies in part on data provided by the International Deli-Dairy-Bakery Association (IDDBA), in addition to proprietary analysis and data from other industry sources.

Read an excerpt from this report below.


Additional Information

Market Insights: A Selection From The Report


Momentum lies with grocery

In the near term, we believe that macro-economic trends continue to favor grocery: with the recession has come a migration of foot traffic—and food sales—from restaurants into the home, as consumers seek less expensive meal alternatives.

  • As detailed in our Consumer Restaurant Outlook Tracker chapter, consumers report a strong tendency to boost grocery spending and to save money, and a weak tendency to boost a variety of restaurant-related spending and behavior—both in comparison to the three months preceding our proprietary February 2010 survey and for planned behavior and spending during the three months following the survey.
  • As we note below, food at home has become cheaper than food away from home as the recession has worn on.

Packaged Facts’ Consumer Restaurant Tracker: home meal use gains ground

And, as suggested by Packaged Facts’ Consumer Restaurant Tracker, consumers report continuing to shift their food spending into the home, as illustrated by the graph below. Data are derived from Packaged Facts’ February 2010 proprietary restaurant tracking survey.

  • Compared to “three months ago,” about 50% of respondent adult (18+) restaurant goers say they are more likely to eat dinner at home—with almost one-third doing so “a lot more.”
  • 39% say they are eating breakfast at home more than they were three months ago—with almost 3 in 10 doing so “a lot more.”
  • Conversely, restaurant goers are less likely to be using or spending on a range of restaurant options.

Of course, much of this behavior is related to cost: to save money, consumers are bringing their food spend back into the home, after decades of doing the opposite.

And one key barometer, the Consumer Price Index, supports the rationale, as it shows “food at home” prices not only declining during the recession, but also being cheaper than “food away from home” (see the Food at home gains pricing edge section below).

In the News


Food Retail Sales Gain Momentum as Prepared and Ready-to-Eat Foods Lure
Recession-Weary Consumers away from Restaurants and into Supermarket Aisles

New York, June 14, 2010When it comes to food, American consumers want it all.  Particularly, they want the variety and savory flavors of restaurant fare without the hefty financial commitment typical when dining out.  The solution has been to bring food spending back into the home after decades of doing the opposite by finding lower cost, delectable cuisine among the prepared and ready-to-eat foods available at local supermarkets, according to Prepared Foods and Ready-to-Eat Foods at Retail: The New Competition to Foodservice by market research publisher Packaged Facts.
The market study, which includes data from Packaged Facts’ February 2010 proprietary survey of 1,881 U.S. adult (18+) consumers, reveals that about 50% of respondent restaurant goers say they are more likely to eat dinner at home compared to “three months ago.” Further, 64% of adult consumers have purchased ready-to-eat/heat-and-eat food from a grocery store or supermarket in the last month. 

“With the recession has come a migration of foot traffic and food sales from restaurants into the home, and in the short-term we believe economic trends favor grocery retailers as consumers seek less expensive meal alternatives,” says Don Montuori, publisher of Packaged Facts. “Sustaining this momentum will require food retailers to continue their transition toward offering higher quality ready-to-eat products. Otherwise customers will leave as quickly as they arrived.”

Packaged Facts forecasts supermarket/grocery prepared foods will achieve sales of $13 billion and $14 billion in 2010 and 2011 respectively, due to growth of 7% during both years.  Aggressive prepared food initiatives and expansion from players ranging from Walmart to BJ’s Whole Club to Kroger’s Fresh Fare to Walgreen’s are expected to further benefit the food retail landscape by giving consumers more locations and more choices. 

Prepared foods are popular options for two divergent populations. The first are those that may seek low-cost, quick alternatives out of financial necessity, cooking aversion, and extreme convenience. The second is a demographic that can likely afford to spend more on prepared foods, and may choose them as quality alternatives to home cooking or using restaurants. 

As products that allow for simple meal planning, prepared foods are also popular among older consumers age 55 and above, who the survey found are “more likely” to be influenced by the “shopping efficiency” of prepared foods.  As a result, Packaged Facts forecasts that helping older consumers plan their purchases and making shopping trips less stressful through efforts by food retailers to place prepared foods in a central role will become increasingly important to this market.  

As part of Packaged Facts’ Foodservice Market Insights series, Prepared Foods and Ready-to-Eat Foods at Retail: The New Competition to Foodservice, offers the foodservice and retail industries new insight into the highly competitive prepared and ready-to-eat foods space. Relying heavily on proprietary consumer research analysis, the report provides “consumer drilldowns” and psychographic profiling, offering foodservice operators and retailers unique access to the minds of prepared foods consumers.  And by assessing the relationship between fast food, family, and casual restaurant attitudes and behavior with that of grocery store and convenience store prepared foods attitudes and behavior, this report also offers unique competitive analysis to help players align and differentiate their product offerings.  

About Packaged Facts - Packaged Facts, a division of MarketResearch.com, publishes market intelligence on a wide range of consumer market topics, including consumer goods and retailing, foods and beverages, demographics, pet products and services, and financial products. Packaged Facts also offers a full range of custom research services.

Additional Materials


Foodservice Market Insights

The insights you need, all in one collective series from Packaged Facts.

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