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Foodservice in Retail - US - December 2018

"Retailers are building out their prepared food programs to be more sophisticated and take direct aim at restaurants, as well as other retailers. They are differentiating with more on-site restaurants, which can range from a well-known quick-service chain to a fast casual restaurant helmed by a celebrity chef. And while fine-dining restaurants, food hall concepts, and bars serving adult beverages are all offering consumers an experience to remember, retailers haven’t lost sight of the importance of quick and affordable grab-and-go options. Mass merchandisers, in particular, are ramping up their prepared grab-and-go focus. Next, look for online ordering and delivery services to help grow prepared foods’ reach."

Jill Failla, Foodservice Analyst

This report will look at the following areas:

  • Supermarket share of food and drink sales is slipping
  • Meal kits pose a growing threat
  • Health is a leading barrier to purchase

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Supermarket share of food and drink sales is slipping
            • Figure 1: MULO sales of food and drink, by retail channel, 2013 and 2018
          • Meal kits pose a growing threat
            • Figure 2: Prepared food attitudes – Net any agree, by gender and age, October 2018
            • Figure 3: Prepared food attitudes – Net any agree, by race and Hispanic origin, October 2018
          • Health is a leading barrier to purchase
            • Figure 4: Prepared food purchase barriers, October 2018
          • The opportunities
            • Prepared foods industry shows growth
              • Figure 5: Year-over-year change in prepared food purchases, October 2018
            • Young, urban consumers are purchasing more prepared foods this year
              • Figure 6: Year-over-year change in prepared food purchases, by CHAID analysis, October 2018
            • Retailers in diverse areas may succeed with on-site restaurant concepts
              • Figure 7: Prepared food concept interest, by race and Hispanic origin, October 2018
            • What it means
            • The Market – What You Need to Know

              • Supermarkets lose share to many competitors
                • Growing at-home sales and online shopping have positive implications for prepared foods
                  • Meal kits hit on the same convenience benefits as prepared foods
                  • Market Breakdown

                    • Supermarkets are losing share of food and beverage sales
                      • Figure 8: MULO sales of food and drink, by retail channel, 2013 and 2018
                  • Market Perspective

                    • Meal kits cut in
                      • Restaurants promote add-on dayparts
                        • Convenience stores up the ante
                          • Figure 9: Sandwich section in a Chicago Amazon Go store
                          • Figure 10: Breakfast section in a Chicago Amazon Go store
                      • Market Factors

                        • At-home sales growth facilitates prepared food sales
                          • Figure 11: BEA food and non-alcoholic beverage sales at home and away from home, January 2010-September 2018
                          • Figure 12: Dining out in 2019 behaviors – Cook more, October 2018
                        • Increasing diversity influences food and drink sourcing
                          • Figure 13: Purchase incidence by channel, by race and Hispanic origin, April 2018
                        • Online grocery grows fast
                          • Calorie counts are now mandatory
                          • Key Players – What You Need to Know

                            • Grocerants take new shape into fine dining, food halls
                              • Made-to-order may not be fast enough
                                • Delivering convenience to your doorstep
                                • What’s Working?

                                  • Standalone restaurants
                                    • In-store restaurant concepts
                                      • Updated menu items
                                        • Are food halls the grocerants of the future?
                                        • What’s Struggling?

                                          • Grab-and-go expands at the expense of made-to-order
                                            • Ingredient and nutritional transparency
                                            • What’s Next?

                                              • Prepared food delivered to your door
                                                • More booze, more bars
                                                  • Blended meals check all the boxes
                                                  • The Consumer – What You Need to Know

                                                    • The prepared foods industry is hot and growing
                                                      • Young city dwellers rely on prepared foods
                                                        • Consumers say they aren’t interested in bars at retailers, but some are already there drinking alcohol
                                                        • Prepared Food Purchases

                                                          • Four out of five consumers purchase prepared foods from grocery stores
                                                            • Figure 14: Prepared food purchases frequency, October 2018
                                                          • Young men are the heaviest users of prepared foods
                                                            • Figure 15: Prepared food user groups, by gender and age, October 2018
                                                          • Asian and Hispanic consumers are heaviest prepared food users
                                                            • Figure 16: Prepared food user groups by race and Hispanic origin, October 2018
                                                        • Prepared Food Purchase Location

                                                          • Most consumers buy prepared foods from supermarkets
                                                            • Figure 17: Prepared food purchase location, October 2018
                                                          • Half of natural grocery shoppers are heavy prepared food users
                                                            • Figure 18: Prepared food user groups, by prepared food purchase location, October 2018
                                                          • iGens prefer to source prepared foods from mass merchandisers
                                                            • Figure 19: Prepared food purchase location by generation, October 2018
                                                          • Over half of lower-income consumers source prepared foods from mass merchandisers
                                                            • Figure 20: Prepared food purchase location by household income, October 2018
                                                        • Year-over-Year Change in Prepared Food Purchases

                                                          • Most are buying the same amount or more prepared foods this year
                                                            • Figure 21: Year-over-year change in prepared food purchases, October 2018
                                                          • Natural grocery consumers are the most likely to be buying more prepared foods year-over-year
                                                            • Figure 22: Year-over-year change in prepared food purchases, by prepared food purchase location, October 2018
                                                          • Young, urban consumers are driving prepared food growth
                                                            • Figure 23: Year-over-year change in prepared food purchases, by CHAID analysis, October 2018
                                                          • Hispanic shoppers also over index for increased prepared food purchases
                                                            • Figure 24: Year-over-year change in prepared food purchases, by race and Hispanic origin, October 2018
                                                          • Convenience fuels prepared food growth
                                                            • Figure 25: Prepared food purchase motivators, October 2018
                                                          • Cost and health are top barriers for prepared food purchases
                                                            • Figure 26: Prepared food purchase barriers, October 2018
                                                        • Prepared Food and Drink Purchases by Daypart

                                                          • Chicken, sandwiches, and salads are go-to prepared foods
                                                            • Figure 27: Prepared food and drink purchases by daypart – Any daypart net, October 2018
                                                          • Prepared foods most commonly serve as a dinner solution
                                                            • Figure 28: Prepared food and drink purchases by daypart – Any items net, October 2018
                                                          • Dinner prepared food purchases are the most varied of any daypart
                                                            • Figure 29: Prepared food and drink purchases by daypart, by correspondence analysis, October 2018
                                                          • Higher-income consumers do not purchase a wide variety of prepared foods
                                                            • Figure 30: Prepared food and drink purchases by daypart – Any daypart net, by household income, October 2018
                                                          • More than half of iGens purchase fresh juice/smoothies at stores that sell groceries
                                                            • Figure 31: Prepared food and drink purchases by daypart – Any daypart net, by generation, October 2018
                                                        • Prepared Food Concept Interest

                                                          • A third of consumers want restaurants at stores that sell groceries
                                                            • Figure 32: Prepared food concept interest, October 2018
                                                          • Women drive interest in prepared beverage stations
                                                            • Figure 33: Prepared food concept interest, by gender, October 2018
                                                          • Millennials are target demographic for grocery store bars
                                                            • Figure 34: Prepared food concept interest, by generation, October 2018
                                                          • Asian consumers propel demand for Asian food stations, sushi/poke
                                                            • Figure 35: Prepared food concept interest, by race and Hispanic origin, October 2018
                                                            • Figure 36: Prepared food concept interest, by race and Hispanic origin, October 2018
                                                        • Prepared Food Behaviors

                                                          • Nearly half of all parents purchase prepared foods for their kids
                                                            • Figure 37: Prepared food behaviors, October 2018
                                                          • Men are more likely to use prepared foods for entertainment solutions
                                                            • Figure 38: Prepared food behaviors, by gender, October 2018
                                                          • Consumers between the ages of 21 and 44 are twice as likely as their older counterparts to drink alcohol at a retailer
                                                            • Figure 39: Prepared food behaviors by age, October 2018
                                                        • Prepared Food Attitudes

                                                          • Customization and transparency are key for prepared foods
                                                              • Figure 40: Prepared food attitudes, October 2018
                                                            • Younger consumers are attracted to limited-time and branded prepared food items
                                                              • Figure 41: Prepared food attitudes – Net any agree, by gender and age, October 2018
                                                            • Hispanics also over index for on-site meal kit interest
                                                              • Figure 42: Prepared food attitudes – Net any agree, by race and Hispanic origin, October 2018
                                                          • Appendix – Data Sources and Abbreviations

                                                            • Data sources
                                                              • Fan chart forecast
                                                                • Consumer survey data
                                                                  • Consumer qualitative research
                                                                    • Abbreviations and terms
                                                                      • Abbreviations
                                                                        • Terms
                                                                        • Appendix – The Consumer

                                                                            • Figure 43: Distribution of generations, by age and race/Hispanic origin, 2018
                                                                          • CHAID Analysis
                                                                            • Methodology
                                                                              • Correspondence Analysis
                                                                                • Methodology
                                                                                    • Figure 44: Prepared/MTO foods/drinks purchased, October 2018

                                                                                Foodservice in Retail - US - December 2018

                                                                                US $4,395.00 (Excl.Tax)