Supermarket Perimeter, Author at

July 1, 2022October 27, 2022

Reporting from the edge

By Laurie Gorton

July 2022

Reporting from
the edge

Monthly magazine explores how, where and why supermarket innovations happen

Supermarket operators know that all the excitement happens today around the perimeter of the store. Now they have a publication that recognizes and celebrates such change: Supermarket Perimeter.

Introduced by Sosland Publishing three years ago, this monthly magazine and its digital products focus on the fresh operations that encompass circle the outer edges of grocery stores and supermarkets.

“Freshness, health, variety, flavor, innovation, authenticity, experiences — it’s little wonder that perimeter departments are getting the most buzz and generating the biggest sales increases,” wrote Andy Nelson, managing editor, Supermarket Perimeter and bake, in his Editor’s Note column for the magazine’s inaugural issue, January 2019. “We at Sosland Publishing have been hearing it for years.”

From corners to full perimeter

Supermarket Perimeter is exclusively focused on the fresh perimeter area of retail grocery stores. Its editorial teams cover the latest trends impacting the entire fresh perimeter and provide their expert insights on the news and trends impacting the perimeter’s key categories, including bakery, deli/prepared foods, produce, dairy, meat, poultry, seafood and more. The magazine also includes the popular Commissary Insider as a monthly supplement.

Troy Ashby, publisher, Supermarket Perimeter and bake, explained the evolution of the new standalone monthly magazine.

“Having served the grocery in-store bakery and in-store deli segment since 2005 with inStore Buyer and then inStore, we had a front row seat to see what was taking place in the perimeter area of grocery and were in a great position to expand our coverage to include insights for all fresh perimeter departments, including bakery and deli,” he said.

The move from inStore to Supermarket Perimeter was a natural next step. According to Ashby, the change was to fold coverage of the in-store bakery and in-store deli into the larger category of fresh. There were good market reasons for doing so.

Statistically solid positioning

“The evolution from inStore to Supermarket Perimeter largely was driven by the increased focus on and investment in fresh perimeter departments as a whole that grocery operations were making in the 2010s,” he added.

The Food Marketing Institute (FMI), the field’s leading trade association, continues to illuminate this trend with a series of webinars, podcasts and TED talks addressing Top Trends in Fresh. It noted that “retailers who are on the forefront of marketing and merchandising these products grow sales up to 25% faster than average.”

Earlier this year, FMI reaffirmed the importance of fresh: “Fresh food has had a phenomenal two-year run, with sales reaching an all-time high as people continue to eat at home and seek stores and meal ideas that meet their needs.”

FMI states that more than half of all supermarket sales involve perishables. It describes fresh as the ultimate disruptive grocery category.

“Fresh saw solid growth with even service-oriented departments like bakery and deli showing strong sales as both expected and surprising areas grew within fresh, leveraging the trends of health, fresh prepared/convenience, taste exploration and customization,” the group noted.

This trend continued despite the pandemic.

For example, a Supermarket Perimeter Daily email of April 19, 2022, reported: “Organic meat is booming. In the past year, organic meat sales have grown 37% vs. two years ago, outpacing the meat department, which grew 20%, according to Nielsen data.”

Such findings, reported over the past decade, paved the way for Sosland to launch Supermarket Perimeter. Ashby said that Rick Stein, FMI’s vice president of fresh foods, is one of the magazine’s authoritative sources.

“In our annual food industry speaks report, members tell us what’s going on,” Stein said in the March 2021 issue of Supermarket Perimeter. “And what’s happening in is stores are differentiating themselves in the perimeter. It’s a part of their key strategy.”

The importance of the perimeter is also emphasized by the International Dairy Deli Bakery Association (IDDBA), which recently described the importance of the fresh category by noting the proliferation of new channels, such as convenience stores and club stores, now competing with grocery.

Supermarkets still have built-in advantages that other channels can’t match.

“You’re not going to smell fresh bread being baked, you’re not going to see sandwiches or pizza being made, or the variety of cheeses or sampling,” according to IDDBA. “Fresh departments have greater roles now than they had decades ago.”

Audience and competition

Statistics about the audience of Supermarket Perimeter position the magazine as a premier marketing vehicle for advertisers serving the fresh departments of supermarkets.

Supermarket Perimeter is offered in both print and digital formats. It maintains active social media sites. It also offers a slate of digital products that include daily and weekly email newsletters, including Protein Insight Weekly and the monthly Perimeter Food Safety. Advertisers can also take advantage of customized webinars, targeted email marketing programs, white papers and e-zines.

The publisher estimates that advertisers have nearly 4 million opportunities annually to connect with their customers via Supermarket Perimeter and its affiliated properties. Print circulation for the monthly magazine averages 10,927 per issue, with digital circulation of 28,698 per issue. And the combined monthly newsletter circulation comes to 264,255.

Circulation by business class finds 78% grocery, supermarket, club; 11% commissary, central kitchen, bakery; and 10% distributor, broker.

“With inStore, we were already reaching c-suite titles, such as vice-president of perishables, director of fresh foods, etc. who had oversight of all fresh perimeter departments,” Ashby said. “So, the expansion to cover all fresh perimeter departments provided an even stronger media product for that portion of our audience.”

It is the only publication in the business-to-business field to focus exclusively on the fresh perimeter of retail food stores. In this, the magazine enjoys a distinctive competitive advantage.

“Supermarket Perimeter is unique in the fact that there isn’t a mirror competitor of the publication/media in the industry,” Mr. Ashby said.

Focused on fresh

“We decided to transform InStore magazine, which covered just in-store deli and bakery, into Supermarket Perimeter because of the incredible growth throughout the fresh perimeter departments,” Nelson said. “Produce, meat and poultry and seafood are also making huge gains at retail. We also saw an under-explored opportunity: Supermarket Perimeter is the only trade publication that focuses exclusively on grocery fresh departments.”

John Unrein, editor, bake and Supermarket Perimeter, explained further. “Each month, Supermarket Perimeter delivers the insight and information bakery, deli/prepared foods, produce, dairy, meat/poultry and seafood executives and decision makers need to meet new challenges and capitalize on the opportunities in today’s dynamic market.”

“We want our work to give retailers practical ideas for ways to improve their fresh departments,” Nelson noted.

It’s a market willing to support both print and digital products. “Many of our readers still like the experience of reading longer-form pieces in our monthly print/digital editions,” Nelson said, “but the times are certainly changing, and we also need to cater to subscribers who want their news and analysis delivered more frequently and in easily digestible chunks.”

To celebrate the Sosland Centennial, Supermarket Perimeter has produced several articles discussing changes that occurred during the past 100 years in fresh presentation (March 2021) and preparation technology (November 2021). Others are planned to look at product development and predict future innovations for foods sold along the perimeter of grocery stores.

You might also enjoy:

Leveraging news: The Food Business News story

Food Business News

Business intelligence and market analysis address the needs of readers throughout the food processing industry.

Dedicated to dairy

Dairy Processing

Sosland Publishing’s new publication offers insight into a dynamic industry.

June 1, 2022August 11, 2022

Health matters

By Andy Nelson

June 2022

Health
matters

Retailers try to keep up with ever-changing definitions of health and wellness

Supermarket Perimeter

tpzijl, aamulya – stock.adobe.com

Health and wellness has never been more important for Americans and for the suppliers of the foods they eat to help them meet their personal better-for-you goals.

But health and wellness have evolved so much in recent years, it’s hard to pinpoint exactly what people mean when they use the terms. Getting a better handle on it, though, is critical to perimeter departments that want to capitalize on the obvious advantages their fresh and healthy foods provide.

In the food world of 20 or so years ago, there wasn’t nearly as much crossover between healthy eaters and those who fell into different categories, said Krystal Register, director of health and wellbeing for Arlington, Va.-based FMI – The Food Industry Association.

For instance, people who called themselves healthy eaters didn’t tend to overlap with those who identified as foodies.

But what Register calls a “convergence” began to emerge before the pandemic and only accelerated during it. Today’s consumers increasingly don’t just want to be just foodies and health-conscious, they also want convenience and a host of other benefits when they make their food-buying choices.

When it comes to the fresh perimeter, one way retailers are trying to meet that new consumer where she is, Register said, is with easy meal solutions that combine convenience, health and flavor.

Crucial to those efforts for many retailers is the input of in-house dietitians.

“There’s an uptick in the number of dietitians in stores,” Register said. “They have the education and the knowledge to take the science of nutrition, which isn’t always easy to talk about, and put it into a customized solution.”

Making that solution convenient is crucial. According to recent Industry Speaks data from FMI, 80% of retailers plan to add more grab-and-go options in the near future.

The rise of “natural”

One big difference between the perimeter departments of the past and the perimeter departments of the present is the presence of “natural” products, said Raj Shroff, founder and principal of Columbus, Ohio-based PINE Strategy & Design.

“It used to be you had a market that specialized in natural, now every grocery store has a huge organic section,” he said. “Natural continues to go mainstream.”

“Mainstream” also increasingly means “decentralized,” said John Youger, a PINE partner. Kroger and other retail chains used to have natural sections in their store. Now natural products are spread throughout the perimeter and the rest of the store.

Despite all of the gains, selling consumers on health and wellness can be easier said than done. As Youger points out, it’s convenience, not health and wellness, that seems to be playing the biggest role in the grocery perimeter of today. Sometimes that can overlap with healthy, but not always.

One simple thing retailers could do in the perimeter to promote the health benefits of their products is more instore signs, Shroff said. Simple messages like “This product is high in fiber,” or “This product has been tied to heart health.”

“It’s not trying to cram it down their throat,” Shroff said. “They can read it or they can ignore it. There may a little of this being done at a store like Whole Foods, but retailers in general have really fallen short in the perimeter of adding that value to shoppers.”

Youger said PINE did a “shop along” with people with diabetes. Once they got outside of the section of the store devoted to people with diabetes, they were lost, he said, unsure of what they could and couldn’t eat.

“It’s a lack of execution by stores,” he said.

One way perimeter departments could combine health and convenience, Shroff said, would be to create “tiered” meal kits combining protein, produce and other perimeter items. One tier could be low sugar, another energy, another recovery, for example.

Pandemic impact

“Health and wellness” is a fluid category, and during the pandemic, many consumers dropped more “restrictive” diets — keto, for example — but were more likely to stick with Mediterranean, whole-food and other diets, Register said.

And regardless of this or that trend du jour, what always “rises to the top,” she said, is heart health.

Whatever particular form their approach to diet takes, almost half of all Americans — 48% — follow at least some approach, indicating that health and wellness is definitely on the minds of consumers, whether they put their intentions into action or not.

And retailers are getting the message.

“There is a real increase in investment in health,” Register said. “And there’s a lot of research showing a direct connection between increasing health outcomes and return on investments.”

Variety, technology, demographics

The grocery fresh perimeter is so diverse, there are many lenses for studying the evolution of health and wellness over the decades.

Take fresh produce. For decades, produce departments focused on a basic range of items, said Brian Numainville, principal in Lake Success, N.Y.-based Retail Feedback Group. Then things like organics started to gain in popularity, and from there, one of the big differences today from a variety perspective, Numainville said, is the expanded range of exotic and superfood items from around the world that many shoppers look for to help meet their health and wellness goals.

Another game-changer, he added, was the advent of smartphones. Apps now provide all the information you’d ever want about specific products and their health benefits, right at your fingertips. And if a shopper needs to find product information — to determine, for example, if a product is gluten-free or to learn more about ingredients or nutrition facts for a specific product — it’s as simple as a web search or app while in the store.

As food is increasingly looked at as a kind of “medicine,” Numainville said, the grocery store has a real opportunity to be the hub of health and wellness for shoppers.

“It all starts with understanding where the shoppers of a given location are at in terms of their health and wellness needs,” he said. “A rural store with an older population might have a very different approach than an urban store with a high percentage of younger shoppers or a suburban store with many families with young children.”

From there, it’s important find ways to link messaging up through the store so there’s consistency and synergy between the various departments in the store, the pharmacy and dietitians. That means connecting the dots for shoppers, so those who are looking for healthy foods and options can easily identify them throughout the departments in the store, providing a convenient and simple communications in all vehicles available — signage, digital, social and beyond.

An interesting point of reference, Numainville said, is the 2021 Food & Health Survey from the International Food Information Council, which found that “In 2016, consumers most identified with the negative: the absence of certain components, like fat and sugar content. In 2021, the definition takes a more positive tone: 27% say it is defined by the presence of healthful components (like fruits, veggies, and nutrients) (up from 17%) and 25% say it is the food that is simply “good for you” (up from 18%).”

“That clearly indicates that shoppers are shifting how they look at food, moving away from an absence of items like fat and sugar, towards choices that moves towards the inclusion of healthy fresh foods that can be used for health,” he said. “I also think shoppers are looking at functional foods, moving beyond simply taking vitamin supplements but connecting with foods that offer health benefits.”

Products grown and sourced from farmers engaging in regenerative agriculture practices will continue to pick up steam into the future, combining “good for you food” with “good for the environment” practices, which appeals to many shoppers, and likely will resonate heavily with millennials and Gen Z, Numainville said.

The growing interest in health and nutrition meant supermarkets had many more SKUs to offer shoppers, but this fragmentation also presented new challenges such as building the right assortment at the store level, managing inventory and the need for smaller case counts, and even new competitors who were finding more efficient ways to connect people with the specific products they wanted to meet their respective needs, according to Barrington, Ill.-based consultancy Brick Meets Click.

Merchandising and services such as meal planning and consults with dietitians are among the creative ways supermarkets can meet their customers’ health and wellness needs, according to Brick Meets Click.

Eating healthier is hard work, though, a challenge dietitians know well. Even when they work one-on-one with their clients, making a lasting change in the way people eat remains elusive. It’s difficult to change eating habits even when these lifestyle changes can lead to a better quality of life.

Information is not the problem, according to Brick Meets Click. Nutritional information has never been more accessible, and there’s plenty of guidance available on what to eat and what to avoid based on a person’s health issues.

“The problem is the friction that comes from the work of combining all the nutrient information and health facts into decisions about what specific products to buy.”

You might also enjoy:

Leveraging news: The Food Business News story

Food Business News

Business intelligence and market analysis address the needs of readers throughout the food processing industry.

Dedicated to dairy

Dairy Processing

Sosland Publishing’s new publication offers insight into a dynamic industry.

November 1, 2021July 8, 2022

(R)evolution

By Andy Nelson

November 2021

(R)evolution

Technological innovations drive perimeter growth through the decades.

Supermarket Perimeter

KATELYN BETZ – SOSLAND PUBLISHING CO., DOVER

For decades, the size and scope of the supermarket perimeter have grown by leaps and bounds. Much of that growth wouldn’t have been possible without groundbreaking technological innovations —both in the aisles and behind the counters.

From both the retailer’s and the consumer’s vantage points, perimeter technology has made huge strides, said Rick Stein, vice president of fresh for Arlington, Va.-based FMI – The Food Industry Association.

That growth has been especially strong in the past few years, he said. Take inventory control, which is crucial for anything involving fresh foods whose clock is ticking even before they hit the store.

“So much work has been done to manage inventory to make sure that only the freshest product is being sold,” Stein said. “When I look on my career, 45 years ago it was done manually —and even 10 years ago it was still done manually.”

Now, with Artificial Intelligence and other technologies, retailers can monitor exactly what’s sold, when. And with the right algorithms, they can keep just enough product on hand to both meet consumer demand and keep foods from going bad and becoming unsellable.

With labor shortages such a concern for most retailers these days, that’s more important than ever, Stein said.

“The perimeter is coming out of the stone age, becoming like what center-store is.”
That’s also true from the shopper’s point of view, Stein said. It wasn’t that long ago that consumers had to rely exclusively on instore signage and print circulars to learn about the products they were interested in buying. Now, with QR codes, learning which foods are local, organic or pesticide-free, or learning how to prep and cook them, is just a click away.

The impetus to create and apply those technologies ramped up exponentially during COVID, Stein said, where countless converts were made on the digital side, using ecommerce to buy their fresh foods, using augmented reality to figure out what to do with them once they purchased them and many other applications.

“It’s not unusual now for consumers to shop with their cell phones, and the day of the QR code has really come into its own,” Stein said.

But ecommerce and also applications of technology aren’t just alternatives to the instore experience. They’re also making that experience much more engaging, Stein said.

“One thing I think retailers will really put a lot of effort into is creating better experiences for consumers in brick and mortar. Think of all the real estate they own. One area that really allows them to create more experiences is the perimeter.”

Point A to Point B —faster

One of the biggest technology-related changes that has helped the grocery perimeter become what it is today is the revolution in transportation efficiencies.

For much of the grocery store’s history, produce and other fresh offerings were limited by seasonality, given how difficult it was to get products to market before they went bad, said Eric Richard, industry relations coordinator for the Madison, Wis.-based International Dairy Deli Bakery Association (IDDBA).

That all changed with advancements in refrigeration technology, logistics and other factors that benefited from higher-tech upgrades.

“Now we can enjoy products from all over the country and world because of logistics and supply chain advancements,” Richard said.

Today, blockchain and other technologies continue to refine those supply chain-related advances even more, he added. Particularly when it comes to preventing, or at least containing and minimizing, food safety-related outbreaks, these technologies are playing a crucial role.

Looking at specific perimeter departments in particular, instore bakeries have benefited tremendously in the fairly recent past from oven innovations, Richard said.
He remembers being asked to help out in the instore bakery of the grocery store he worked at as a teenager in New Jersey in the 1990s. The difference between the baking technology then and now is like “night and day,” he said, and led to a lot of trepidation about his youthful efforts.

“Being able to bake high-quality products in the instore bakery has a lot do with equipment innovations,” he said. “It certainly would have helped me have a lot more confidence that the bread I was trying to bake would come out perfect. Having the right oven at the right temperature with the right settings, that are easy to program and calculate —that’s especially important when training the next generation of bakers.”

The equipment innovations have made it much easier for instore bakeries to bring new workers on board, he added, a fact that could not be more important in today’s tight-labor environment.

Instore delis have similarly benefited from technological upgrades of ovens and other equipment in recent decades, Richard said. Stovetop ovens, for instance, have transformed the deli from a department that as recently as the 90s was known mainly for deli meats and cheeses and sides to one that now rivals many restaurants for the quality of its retail foodservice offerings.

“In order to prepare all those foods you have to have the right equipment,” Richard said.

Creating experiences

There’s a fine line between helping consumers via technology and giving them too much, but Stein is confident that retailers will continue to find the right balance. A shopper who has downloaded their retailer’s app will start to get messages as soon as they enter their store, and they can use that information to guide them to exactly the kinds of things they’re likely to purchase.

“That becomes an experience — they don’t look at it as being inundated with technology, they like it. It may help them find not only the exact ingredients they want for the meal they’re cooking that night, but also how to use their leftovers to avoid food waste.”

In FMI’s latest round of Speaks industry surveys, retailers told the association that they plan on expanding their retail foodservice operations, and that technology will be a key to helping them do so. And it’s not just about dinner anymore, Stein said —consumers are also looking for breakfast and lunch options.

For decades, grocery stores didn’t have the same incentives as other industries to embrace technology, Stein said. That was because supermarkets always enjoyed a strong labor market. They didn’t need to automate like the garment, automobile industries did.

Those days are over.

“Everything converged at once to motivate our retailers to think of technology as a fundamental underpinning, and now we’re seeing a lot of advancement. And when the supermarket industry puts its mind to doing something, it gets it done, and done better than most other industries. I think of technology as a fundamental foundation that runs through all of our business. The business is going to advance, new technologies are going to come, and supermarkets are poised to embrace more than they ever have in the past.”

The very floor plans of instore departments have also benefited from technological upgrades, Richard said. For one thing, they’re easy to maneuver in given the advent of smaller, more efficient cases that come in a variety of sizes to fit the appropriate spaces.

“In the past, when you had giant bulky cases to walk around, it made it difficult to browse,” he said. “And the lighting in the cases has improved so much. It used to be you had no idea what you were looking at, it was so dark inside.” The ease and convenience of grab-and-go and other self-serve cases has helped transform the instore deli into the multifaceted, consumer-friendly place it is today.

You might also enjoy:

Looking Ahead

Pet Food Processing

Overcoming obstacles and chasing innovation, the pet food industry prepares for its promising future.

Sustainability Strategies

Meat+Poultry

Today’s meat and poultry processors carefully manage expectations to feed people, preserve the planet and deliver profits in the future.

Equipment innovations

Developments in meat slicers and other equipment used in the perimeter have played a crucial role in the rapid expansion of many value-added deli and prepared foods offerings, said Carolyn Bilger, marketing director for Troy, Ohio-based Hobart Food Equipment Group.

“Deli-made meals are being chosen more and more by shoppers to replace going to restaurants or to save time in their home kitchens,” Bilger said. “Along with those meal options, the grab and go area of retail began its growth before COVID-19 and has increased exponentially since the pandemic.”

More and more people are picking up deli meats and cheeses in the perimeter of the deli rather than lining up at the counter, she added.

Customers now have more options in fresh meal prep than ever before. The grab and go deli meat and cheese selections now include premium options as well as the store brand, and today’s shoppers, Bilger said, like how the convenience of choosing freshly sliced items without waiting in line at the counter matches with their hectic lifestyles.

Hobart has met the call for this surging demand with products like its recently launched Portion Scale Slicer, which incorporates the weighing equipment into the slicer, thereby increasing the efficiency of grab-and-go prep. “The user can program the weight needed and the automatic slicer will slice the desired amount and pause to allow for removal,” Bilger said. “Following the pause, it will again slice the programmed amount or meat or cheese.”

The slicer’s built-in scale keeps the user from having to separately weigh the packaged amount, increasing the efficiency of the overall process. Hobart studies show that up to 40% of an operator’s prep time for a 10-pound chub can be saved by using the Portion Scale Slicer.

Growth in fresh perimeter departments shows no signs of slowing, Bilger said, especially with more consumers seeking options to aid in home meal creation. Hobart reps love to spend time in retail delis around the country, she added, learning from its users and understanding what their pain points are.

“Our goal in product development is to continuously improve our equipment and find solutions to increase efficiency and satisfaction for the deli associates. This allows them more time to provide meal and deli solutions in the perimeter.”

Putting it all together

Over the past several decades, the perimeter of the grocery store has evolved the most as food retailers battle to gain and retain shopper loyalty by providing fresh and healthy options, said Marjorie Proctor, design and marketing specialist for Conyers, Ga.-based Dover Food Retail, whose products range from Hillphoenix brand refrigeration systems, power systems and display cases to Anthony brand doors.

Grocers, who are always on the cutting edge of industry technologies to give them a competitive advantage, partner with manufacturers like Hillphoenix to transform the perimeter by exploring new instore designs and technologies, she said.

That includes lighting, departmental programs, merchandising displays, maintaining product integrity, and energy efficiency — all of which have helped the grocery industry get to where it is today.

For Hillphoenix, that journey began 30 years ago, when Phoenix Refrigeration, a refrigeration manufacturer, saw the need to acquire a display case company to invest a forward-thinking approach to refrigeration as a whole.

Phoenix’s subsequent collaboration with Hill Refrigeration resulted in the creation of Hillphoenix. Since then, several Hillphoenix innovations have helped perimeter departments evolve and prosper.

One standout has been Coolgenix display case technology. A secondary coolant conduction design that enables significant increases in product shelf life and dramatically reduces product shrinkage in fresh meat and seafood service display cases, Coolgenix was a radical departure from convection cooling that was traditionally used to refrigerate the entire case interior versus concentrating the cooling directly on the product.

Hillphoenix has also made significant innovations in natural refrigerant technology. Two decades ago, the company installed the first test store utilizing CO2 as a secondary fluid.

“As refrigerants are phased out, natural refrigerants like CO2 and hydrocarbons such as R-290 are more important than ever as environmental concerns are at the forefront as sustainable refrigerants transition into the overall grocery sustainability plan,” Proctor said. “They have zero impact on the environment and are more efficient and more economical.”

Let there be light

Advancements in lighting technologies have also made big changes in perimeter departments in the past three decades, particularly the past 15 years, Proctor said.
That period has seen the introduction of LEDs, reduced lamp diameters, changing color temperatures and focusing light more directly on product to increase contrast.

“Gone are the days of just providing light all over inside a store,” Proctor said. “For a perimeter to be successful today, it’s important for stores to use lighting to tell their story.”

In 2009 Hillphoenix introduced the Clearvoyant LED light system, designed for the company’s refrigerated display cases. Compared to T8 fluorescent lighting, Clearvoyant is 69% more energy-efficient. Grocers also appreciate the ability to direct light from angles of 0 to 30°, the low profile of the light rod design, and the various color temperatures available based on the type of food being merchandised, Proctor said.As important as lighting is, it just sets the stage — merchandising is the star. “Over the decades we’ve seen merchandising become more three-dimensional in terms of bump out displays, water-falling product, and going vertical,” Proctor said. “Today, cases have much more vertical heights in most areas versus 20 or 30 years ago. This is where the total refrigeration and store package comes in.”

Case and refrigeration systems have to be designed to work with all of the various merchandising displays so they not only look good but they do their main job — keeping product fresh.

Another technology that has enjoyed tremendous growth in recent decades, particularly the past 10 years, is refrigerated door cases, Proctor said.

In the past, it was commonly believed that sales would be compromised as soon as product was put behind doors.

But today, thanks to improvements in door designs and door case lighting, sales can actually be gained by merchandising behind glass doors.

“Not only does it save a great amount of energy, it increases the time that customers spend in the department purchasing products as the result of warmer aisles and broader merchandising schemes.”

March 1, 2021April 29, 2022

The Rise of Fresh

By Andy Nelson

March 2021

The rise
of fresh

Where the grocery perimeter’s been, where it is now,
and where it’s headed

Supermarket Perimeter

ClassicStock / Alamy Stock Photo

In the 1970s, when Rick Stein was in the early years of his career in retail grocery, perimeter sales made up about a third of total sales for the East Coast chain he worked for.

Meat and produce were big. But many stores didn’t even have what we would consider retail foodservice today. And the instore bakery was still a gleam in most retailers’ eyes, if that. Deli prepared? Sure, but it might be fried chicken (but no rotisserie), a few sides, maybe livers and gizzards, and not much else. And forget about grab ‘n go.

When Stein left the company in 2013, perimeter’s one-third share had risen to more than half.

“Not only has fresh expanded its contribution to the total, it’s also expanded the footprint,” said Stein, vice president of fresh for Arlington, Va.-based FMI – The Food Industry Association. “In our annual Food Industry Speaks report, members tell us what’s going on. And what’s happening is stores are differentiating themselves in the perimeter. It’s a part of their key strategy.”

And there’s no reason to think that, once the pandemic is in the rearview mirror, it won’t continue to rise.

“I believe the fresh perimeter will continue to thrive, for a number of reasons,” Stein said. “For one, many items in the perimeter are key ingredients to making meals.”

Even if people don’t cook an entire meal from scratch, Stein said, chances are they’re getting a good number of those ingredients from the perimeter. Maybe they buy the steak from the meat case, then add a salad kit from produce and a prepared side from deli/prepared.
Another reason is health.

“Health and wellbeing have never been more in the forefront,” Stein said. “The virus is hurting people with underlying conditions. When you’re cooking at home, you’re thinking about the foods you eat day after day, and health is often affiliated with the fresh departments.”

Building the perimeter
of the future

A to-do list for retailers from IDDBA’s Eric Richard

Cater to specific dietary needs
Engage, engage, engage: find ways to turn visits to the perimeter into experiences
Get cooking: hire chefs and have them on the floor educating consumers
Diversify: find new ways to combine brick-and-mortar with surging ecommerce

Are you experienced?

Several years ago, Eric Richard and several of his colleagues at the Madison, Wis.-based International Dairy Deli Bakery Association read an article about the “experience economy” and the ever-greater role it would play in luring consumers into retail stores and keeping them there.

That emphasis on consumer experiences went on to inform IDDBA’s What’s in Store Live displays at its annual conventions, and it’s one of the first things Richard, IDDBA’s industry relations coordinator, thinks about when the topic of the evolution of the grocery fresh perimeter over the decades comes up.

“The importance of experience in the fresh perimeter is especially important, with all of the new channels competing with grocery,” he said. “When I was growing up, people shopped at ShopRite, or Pathmark. They didn’t shop for groceries at the convenience store or a club store.”

With so much more competition in the market now, creating experiences consumers will remember is more important than ever, Richard said. And supermarkets, while facing intense competition, still have built-in advantages the other channels can’t hope to match.

“You’re not going to smell fresh bread being baked, you’re not going to see sandwiches or pizza being made, or the variety of cheeses, or sampling,” he said. “Fresh departments have greater roles now than they had decades ago.”

Produce butchers preparing just-purchased whole fruits and vegetables for consumers is one of the many types of experiential upgrades likely to be seen more frequently in the new normal, Stein said.

In retail fresh seafood, which has exploded during the pandemic, expect seafood mongers to play an ever-greater role, helping consumers with cooking and pairing advice.

The same goes for butchers in the meat department. And technology will continue to play a big role. Stein said some retailers now have screens in their departments with videos showing how to prepare and cook certain cuts. Sales for those cuts have soared accordingly.

There’s no denying the explosion of ecommerce in the retail grocery space, particularly in the wake of COVID. But at the end of the day, Richard said, shopping online is not the same as shopping in the store, particular in the store’s fresh perimeter departments.

Ecommerce’s growth will obviously continue apace even after the pandemic has finally passed, but Richard is optimistic about brick-and-mortar’s future, particularly when it comes to the perimeter.

You might also enjoy:

Tomorrow’s consumer

Meat+Poultry

Looking ahead, producers, processors and retailers must appeal to evolving demographics.

Bioceres making its push with GM wheat

World Grain

Argentina-based company has made major inroads with HB4 wheat in Argentina, has sights set on Australia and the US

Even some of the hardest-hit categories are expected to pick up where they left off pre-pandemic.

“Prepared foods has taken a big hit in the past year, but going into the pandemic it was doing very well, and it’s an area that going forward can really help supermarkets evolve and compete more with quick-serve and other foodservice channels,” Richard said. “More and more people look to supermarkets as an option for prepared foods.”

Past evolutions of the perimeter that will continue in the future, he added, will include more food halls, food courts and grocerants that will plant more and more grocery stores firmly in the foodservice world.

“I think we’ll get back there,” he said. “Statistics show that the trend of people eating away from home will continue. The supermarket is going from mainly a place where you get your ingredients to a prepared food destination.”

In the know

Hand-in-hand with that, Richard said, is supermarkets’ growing role as a hub of information for shoppers — something else that evolved in recent decades. IDDBA, for instance, is currently working on implementing a charcuterie certification program that will help retailers explain a complex industry to a consumer base that is ravenous for information on the topic.

The same goes for cheese, for entertaining in general and for countless other aspects of the perimeter experience where education could open a world of opportunity to grocery retailers.

“Trending flavors, foods consumers haven’t tried but want to try — the supermarket can educate people about what they’re selling and tell those stories – the grocery store becomes the storyteller,” Richard said.

Another huge change that has affected the perimeter, and grocery stores in general, over the decades has been demographics-based, Richard said. Namely: households, on average, aren’t nearly as big as they used to be.

“Forty to 50 years ago you’d be shopping for a family of four or five. Now it’s a single person, or someone and their partner. The size, the quantity, how it’s packaged has all changed.”

That’s definitely true in the instore bakery, Richard said. Not everyone is looking to buy an entire loaf of bread these days. Maybe they want half a loaf, or even just a few slices.

“Demographics have impacted how products are merchandised,” he said. “It’s true in the deli, too. Not everyone wants a pound or a half pound of turkey. Maybe they want a quarter-pound instead.”

“When we get back to normal we’ll see all these trends that were emerging before the pandemic, plus new innovations. There will definitely be continued growth on the fresh perimeter. At the end of the day, when it comes to supermarkets, the fresh perimeter is really the draw.”

Looking ahead

One change in the perimeter that is more recent, Stein said, is the emphasis on locally grown and sourced foods and on assortment.

“Think of a produce department in, say, 1979, or 1983. In the mid-Atlantic, where I grew up, if it was January, you’d see a lot of hard goods —apples, pears, onions and potatoes —but not soft fruit. You’d have to go to frozen for that.”

Now, with imports, it’s easy to find almost whatever you could possibly want in the way of a fresh fruit or vegetable, year-round.

Stein also expects retail foodservice to continue making the huge strides it was pre-pandemic.

“Stores’ culinary capability has really blossomed in the last 10 years,” he said. “They’re competing with restaurants.”

Some things could permanently change due to COVID, however. Donuts from the instore bakery are more likely to be marketed packaged. Hot bars will return, but for now, instead of consumers serving themselves, a clerk will dish up their foods to avoid too many hands touching the same serving spoons and ladles.

Salad bars may be repurposed as grab ‘n go premade salad areas. (Repurposing could be a necessity for many retailers who have invested in expensive equipment, some of which isn’t easily moved.)

Retailers can look to capitalize on that repurposing by adding other cold grab and go deli prepared items. Some, for instance, have already seen success marketing cold chicken wings in repurposed bars, Stein said. Retailers may worry about the added labor expense, but Stein said volume can make up for that if consumers see value in it.

“One retailer put their wing bar into full-service, and they sold through the roof,” he said.

The star of the store

Dollar sales growth: 4-year CAGR

Hy-Vee: What’s changed, what’s stayed the same

We asked Dawn Buzynski, director of strategic communications for West Des Moines, Iowa-based Hy-Vee, to share her thoughts on how the fresh perimeter has evolved for the retailer.

Supermarket Perimeter: Looking at the perimeter as a whole, what have been some of the big changes over the years?

Dawn Buzynski: For Hy-Vee, the perimeter has evolved from your more traditional offerings – meat, dairy and produce – to the very best selection of those items, plus things like artisan breads, prepared meals, fast-casual dining options, charcuterie, cheeses and more. While much has changed with what we offer our customers over the years, our commitment to quality produce, fresh-baked breads and a variety of meat and meal options in our perimeter is still a focus.

SP: What about produce?

Buzynski: Hy-Vee’s produce section has always been a colorful point of entry greeting for customers. It’s changed over the years in both quality and offerings, and the selection has evolved with the availability of specialty items to offer our customers. Over the years we have added organic and specialty items, adding to a much wider selection. Country of Origin Labeling (COOL) is important for customers because they want to know where their produce is coming from. Advancements in shipping and technology allows us to procure quality produce across the global as well as locally. When we are not able to source items locally, we have invested in technology – from the warehouse, to transportation and in-store, to keep produce from around the world – such as bananas – fresh. We’re proud of our Hy-Vee Homegrown initiative, where we partner with local family farmers within a 200-mile radius of a particular store to provide customers with local options. This not only supports local communities, but it provides our customers with the freshest produce from farm to store.

SP: What other perimeter departments have seen big changes over the years?

Buzynski: Over time, we’ve incorporated coolers into the perimeter at the front of the store for quick grab-and-go options, including take-and-bake prepared foods. As we move forward, we remain committed to staying on the forefront of trends and offering our customers the best experience in fresh. We offer a large selection of artisan breads, charcuterie, a world-class meat and cheese selection, and many prepared food options. Prepared foods include our Hy-Vee Mealtime-To-Go selections, which are made fresh in-store and allow customers to take pre-made meals home to feed their families. Fast-casual departments, such as Hy-Vee Chinese, Nori Sushi, Hickory House, and Italian round out the prepared meal options with something for every palette.

SP: What role has technology played in the evolution of the perimeter at Hy-Vee?

Buzynski: Data has been a critical factor in changing the offerings, variety and price points of fresh foods offered throughout the perimeter. By using consumer purchase behavior data, along with focus groups and secondary research, we’ve been able to continuously evolve our perimeter to meet the needs of our diverse shopping population. As we’ve seen the interest in fresh food increase, we’ve also had the data to support growing the footprint of the fresh perimeter, to allow for greater product selection and variety.