The delicatessen and fine food market is in good shape. The UK's speciality sector is booming, with sales rising £600m in the last four years, according to Food from Britain. Individual fine food suppliers report rising volumes and sales.
The market is expanding with convenience stores stocking an increasing number of deli type products. Nisa-Today has greatly increased its volumes of prepacked continental meats in the last two years, according to Nisa-Chilled buying controller Andy Cowin.
Taylor Nelson Sofres' latest figures show that sales of ham, the largest sector in cooked meat, have increased 6% in the last year, while Rea Valley, Danish Deli, Geo Adams and Fiorucci confirm that traditional and continental meats' sales are very healthy.
Cheese sales are similarly positive but only in prepack where they account for more than three quarters of total volume.
However, the heart of the category, the traditional delicatessen counter with its range of loose meats, cheese, salads and other delicacies, shows clear signs of being seriously under threat. Increasingly retailers are co-opting counter space, facilities and staff for new, more profitable enterprises, such as hot takeaways, serveovers, home meal replacement and fresh pizza. These sections generate greater consumer interest and offer better sales potential.
The other threat is the escalation of the drift from loose to prepack. TN Sofres' figures show a sharp decline in loose cheese volumes and sales over the last year.
Nisa-Chilled's Cowin says: "An increasing number of traditional deli counter items are moving into pre-pack. The range available is becoming more interesting, varied and better presented, which is encouraging sales.
"We still supply our stores with loose, but considerably less than it was a few years ago. The labour costs, wastage and regulations involved in running a traditional deli counter don't give a good return. Increasingly our counters are geared towards meal replacement."
Consumers' preference for the convenience of prepack is also driving the decline of counter sales. Age, too, plays a part, according to commercial director Alistair Jackson of North Downs Dairy. "The majority of deli counter cheese purchasers are 45+ in the AB socio-demographic group. Younger people don't buy from the counter, they want speed of service and convenience. The challenge is how to attract them to the counter, for they are the customers of the future."
Jackson says the multiples have adopted various strategies to make counter sales more attractive. "Asda has attempted to address the service issue by precutting and wrapping loose cheese on the counter. The aim has been to reduce queuing. It's been running for nearly two years, but it hasn't really worked because all it's done is to shift sales into prepack"
Price promotion is another, widely used strategy, but Jackson is very sceptical of its impact. "All it does is switch volume from one product to another. It doesn't grow the category."
Tesco is trying to revive cheese counter sales by replacing promotions with lower prices."It's across all products. Our Pilgrims Choice Vintage farmhouse cheddar has dropped from £7.25 to £5.99 a kilo. We're waiting to see its impact," says Jackson.
North Downs' attempts to stimulate consumer interest include a new logo for its Pilgrims Choice brand emphasising its handcrafted authenticity.
Dairycrest's research into declining deli counter sales throws more light on to the matter. Brand manager Mike Buckland says: "We found that consumers view the supermarket deli as a destination category. If it was removed, consumers say they would shop elsewhere. However, before reaching the deli counter, most have already browsed the prepack section and picked up their replenishment purchases. This means the cheese entry on their mental shopping list has already been ticked. "At the counter loose cheese is seen as a yellow wall, despite the fact that it is the only place where certain specific added value cheeses can be seen and sampled."
Dairy Crest recommends creating a sense of theatre to break up the yellow wall."Cheeses should be carefully positioned in relation to their size and colour and interspersed with vibrant, contrasting props to add character.
"Altering the shape of the counter to draw the eye, employing colourful point of sale material, and providing information about specific products are other means to drive interest," says Buckland.
Alan Preston, joint md of speciality cheese importer HT Webb, believes consistent staff training and good staff product knowledge will pay dividends in boosting sales. "The absence of labelling on counters means customers need more help in choosing and tasting which in turn means well informed counter staff.
"This is becoming more important as consumers become more sophisticated and demand stronger, more mature flavours, " says Preston.
Continental charcuterie sales are being driven by the rising demand for speciality and niche products, plus their increasing availability in prepack format according to Fiorucci managing director Joe Zottola. "The bestsellers are still parma ham and salami milano but demand is increasing for regional and niche products as consumers become more familiar with them through foreign travel and their tastes become more adventurous. "
Fiorucci's sales increased 41% last year, largely through prepack and the growth of the convenience store market. "We've done this through expanding our range to 40 lines to make marketing and distribution cost effective to the independent trade," adds Zottola.
New developments are a low fat/low salt salami aimed at the health concious market and the introduction of a wafer thin cut on the more delicately flavoured meats. "The wafer thin cut is very much in demand now," says Zottola.
Danepak is putting its efforts into expanding its premium sliced cooked meats range, an area of the market which it says is relatively underdeveloped. Marketing manager Madeleine Cassidy says consumers are calling for higher quality pre-pack cooked meats. "They want something that matches the quality of the deli counter, but with the convenience of prepack."
The importance of consistent product quality is echoed by Rea Valley Speciality Foods which says consumers are returning to traditional tastes, such as ox and lunch tongue. Sales and marketing manager Martin Burdekin says year on year sales of these products are increasing and it now offers a range of sizes to reduce counter wastage."
{{FOCUS SPECIALS }}
No comments yet