Fresh food innovation

Even as price tops most shoppers’ agenda when buying groceries, that hasn’t stopped consumers from being willing to devote more of their budget to products they prefer, research from Deloitte shows.

More than two-thirds (68%) of shoppers who participated in a recent survey conducted by the consulting firm indicated they are willing to pay a premium for fresh food, a year-over-year increase of seven percentage points. A similar proportion (64%) of grocery industry executives polled by Deloitte said the fresh department is the most strategically important area for their sales growth plan during the next 12-36 months.

While people are willing to spend more for what they feel is higher-quality food, cost concerns remain paramount, with 93% of the shoppers Deloitte surveyed saying price is their top purchase driver.

The findings, which are laid out in an October report titled “Fresh Food at the Intersection of Trust and Transparency,” indicate that consumers especially value fresh food. People who are willing to pay more for fresh products are open to spending 28% more for those types of goods than for frozen, canned or processed options, according to data the consulting firm collected from a July survey of 2,000 shoppers.

The researchers also found that consumers are willing to pay an even larger premium for sustainably produced fresh food. Participants in the survey indicated that they would be willing to spend an average of 30% more for these goods, but grocery executives said they believed shoppers would be willing to pay just 12% extra.

Deloitte’s data on grocery executives’ sentiment is drawn from a survey this summer of 100 executives at retailers with more than 10,000 employees.

Even as they expressed willingness to dig deeper in their wallets to get what they most value when shopping for groceries, consumers said they feel food prices have gone up excessively. The vast majority of participants in the study said they think they’re being asked to pay more than necessary at the grocery store, with higher prices going more to pad profits than to defray higher costs from suppliers.

Those findings are in line with research retail analytics firm Dunnhumby released last year showing that consumers overestimated the rate of grocery inflation and retailers' profitability.

Consumers also told Deloitte that they feel grocers play a central role in making sure they have access to food that is safe. Thirty-seven percent of shoppers said they feel trusting a grocery store to ensure food safety is more important than brands (30%) or government regulatory bodies (24%).

In addition, shoppers place more trust in their primary grocery store than in other types of retailers, including clothing, convenience and department stores, and mass merchants, Deloitte reported.

“Understanding consumer behavior and preferences when it comes to organic, locally grown and sustainably sourced fresh food can help grocers differentiate themselves from the competition, not just on price, but as a trusted source of information,” Daniel Edsall, global grocer leader and principal at Deloitte, said in a statement.

Deloitte’s research also indicates that people want grocers to focus on their health. Eighty percent said they look for foods that provide nutrition profiles that reflect their individual needs, and 64% said they think fresh food can have benefits similar to medicine. Almost 40% of shoppers said they are willing to share some health information with grocers in return for personalized fresh food suggestions, Deloitte found.

At a Food Lion store in Charlotte, North Carolina, there’s a chilled produce room with fruits and vegetables, a designated plant-based display, bottled smoothie drinks, and crates of pineapples and bagged apples. 

It’s one of the dozens of “walk-in garden coolers” that the Ahold Delhaize-owned banner has steadily introduced in its new stores as well as remodels it has completed in recent years. Those store updates have fueled sales increases across the company.

The walk-in cooler concept is not new in the grocery industry, but Food Lion’s focus on produce has been a bit of an anomaly. Other retailers like Whole Foods Market, Hy-Vee and Costco that have used the design have done so for different categories, like meat, cheese, dairy and beer, sources said. 

“We've seen this happen a lot in stores that have beer departments,” said Phil Lempert, founder and editor of Supermarket Guru, noting that the concept is “giving people a different kind of experience that makes it more interesting and inviting.”

The produce coolers are part of Ahold Delhaize’s efforts to modernize Food Lion. All told, the company has spent hundreds of millions of dollars over the course of several years to give the value-focused banner a fresher look, offer more efficient shopping experiences, provide e-commerce options and expand product assortments. The revamp efforts seem to be paying off; Food Lion has achieved more than 40 consecutive quarters of comp store sales growth, Ahold Delhaize President and CEO Frans Muller told investors during the company's second-quarter earnings call last September. 

Ahold Delhaize has positioned the garden coolers as a way to boost product freshness. When announcing the chain’s location in Little River, South Carolina, which opened last May, Food Lion said the cooler helps with “ensuring the freshest items available.” Food Lion did not respond to requests for comment on its produce coolers. 

While it’s unclear if Food Lion is seeing energy savings, extended produce shelf life or reduced shrink with the coolers, sources said that displays for fruits and vegetables matter and can impact consumers’ perception of freshness and quality. The coolers, they said, can serve as a distinctive merchandising move for Food Lion, which straddles the value propositions of providing “an easy, fresh and affordable shopping experience.”

Especially for produce, designated cooler rooms could help consumers “feel like they're walking into a different, fresher environment,” Lempert said. 

“In my opinion, it's more of a marketing gimmick than anything else,” Lempert said about Food Lion’s garden coolers. “I think it sets a nice atmosphere for people.” 

Perception of freshness

Food Lion has said the walk-in produce coolers are designed to keep produce fresher for longer. Given that produce has one of the highest levels of shrink in a grocery store, finding ways to make fruits and vegetables stay fresher for longer and reduce shrink are important to retailers, Lempert noted. 

Using a chilled room instead of placing products in cold cases can help emulate a farmers market — a more inviting atmosphere that incentivizes bigger baskets because items can be merchandised together and don’t have to be separated in different compartments, said Paco Underhill, author of “Why We Buy: The Science of Shopping” and founder of consulting firm Envirosell. 

“[When] you can see the blueberries next to the blackberries next to the apricots next to the avocados, it helps you understand what the mix of things are,” Underhill said. 

Boosting the appearance of freshness for produce — a keystone of grocery store merchandising — is a challenge that grocers have long worked to solve, said Kevin Kelley, co-founder and principal of strategy and design firm Shook Kelley.

“Context is what really sells,” Kelley said, adding that it is “very hard for grocery stores to impress customers” with freshness. 

Merchandising strategies that make fruits and vegetables appear as though they came right from the farm create the illusion of freshness, said Kelley, who worked in Charlotte for a number of years for an unnamed competitor of Food Lion’s.

The walk-in cooler concept can create what Kelley calls a “threshold experience” that makes shoppers feel like they’ve stepped into a new, notable environment.

“There's something that happens when people step out of their regular [routine],” Kelley said, noting that a spatial or temperature change can alter shopper behavior, encouraging them to slow down and, as a result, buy more products. 

Could other grocers follow suit? 

The walk-in produce coolers pose merchandising limitations and challenges to both workers and customers, sources noted. 

Apples and citruses are in Food Lion’s garden coolers — even though they don’t need to be kept cold, with Lempert noting that having those items in a chilled room won’t impact their freshness. 

Grocers do need to be mindful about items like nuts and bread that could spoil faster due to the moisture of a chilled room, he added.

Grocers considering a chilled room may also want to think about offering a limited assortment instead of their full assortment, Lempert said. He gave the example of a Whole Foods store in California that had its produce department split into two parts with one portion, which contained salads, maintaining a lower temperature than the other.

Consumers and workers may also bristle at the prospect of being in a chilled room, especially for longer periods of time, sources said. 

Consumers may want to spend longer periods of time picking fruits and vegetables, Lempert said. The same concern could apply to workers, especially ones with arthritis or other health conditions, he added.

“People spend more time in produce departments picking their fruits, looking at the various fruits and vegetables that are there,” Lempert said, noting that colder temperatures could speed up consumers’ shopping. “It might be physically uncomfortable for somebody to stay in that chilled environment for that length of time.”

Grocers can address the coldness issue. At the now-closed Fairway Market in Harlem in New York City, which had its meat, deli and dairy department in a cooler, Underhill recalled seeing a rack of down jackets for people to wear to stay warm. 

“Kids loved it,” Underhill said. “It was an experience in the context of the grocery that they had not experienced at retail [before where you] step off from one climate zone into another.”

For grocers evaluating similar concepts, Lempert offered three key criteria to consider: consumer feedback, whether it can extend produce shelf life to reduce shrink, and energy costs. Underhill suggests grocers looking to elevate their produce offerings add signage to tell customers where fruits and vegetables are sourced from — a merchandising tactic that can further accentuate local offerings. 

If walk-in produce coolers can help produce stay fresher for longer and lead to less shrink, then Lempert could see other grocers roll out the concept. 

“If it's just a marketing gimmick that doesn't really produce any benefit for the produce itself or for the consumer — no, I think it’s an expensive experiment,” he said.

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By Invafresh

Amidst evolving regulations and shifting consumer expectations, the grocery retail sector is looking to invest in innovative solutions that address food waste and meet sustainability standards. In this dynamic landscape, technological innovation is a key ingredient to confronting the unique challenges faced by grocers. By strategically investing in innovative solutions geared towards waste prevention, grocery retailers can optimize operations, minimize losses, and boost the bottom line. This dual approach not only meets regulatory requirements and exceeds customer expectations, but also reinforces brand reputation and customer loyalty, positioning grocery retailers as leaders in sustainable retail practices.

Addressing overstocking through innovation

Overstocking poses a significant challenge in grocery retail, particularly with the limited shelf life of fresh food items. The repercussions of overstocking extend beyond financial losses to encompass the root cause of waste in the store. To combat this issue, technology-driven solutions have emerged as game-changers.

Proactive measures: AI-enhanced inventory optimization

Effective inventory optimization hinges on accurate demand forecasting. Artificial Intelligence (AI) plays a pivotal role in this aspect by analyzing vast datasets encompassing factors such as historical sales data, seasonal trends, and external variables like weather patterns.

AI-powered inventory management systems offer unparalleled accuracy and efficiency in monitoring stock levels and predicting demand patterns. By leveraging data analytics and machine learning algorithms, retailers can optimize their inventory levels, allowing executives and floor managers to make informed decisions and stock the right inventory at the right time. These actions reduce the likelihood of overstocking fresh produce and reliance on reactive waste reduction tactics such as expiry management, markdowns, and donations that come at the cost of reduced profit margins.

Reactive strategies: AI-enhanced expiry management and markdown optimization

However, despite proactive measures, some level of waste is inevitable. Expiry management software emerges as a valuable tool in this context, allowing retailers to monitor product shelf life and implement timely markdowns or donation initiatives to divert the amount of food that ends up in landfills. Expiry management software has also been shown to reduce manual labor hours. Invafresh customers that have used date checking tools have seen a 70% reduction in time spent manually checking dates.

Markdown optimization strategies, powered by AI algorithms, also provide a sophisticated method for adjusting prices to clear excess inventory effectively. These algorithms analyze diverse factors, including demand elasticity, competitor pricing, and historical sales data, to dynamically adjust prices. This all allows grocery retailers to reduce food waste profitably. Notably, Invafresh customers have reported a remarkable 20% increase in revenue from markdowns thanks to these optimized pricing strategies.

Successful implementation: customer proof points

The innovative use of AI within these solutions has proven to be an effective way to tackle food waste. For example, Price Chopper/Market 32 has strategically implemented Invafresh's AI-enhanced Fresh Retail Platform across its produce, bakery, deli, meat, and seafood departments. This innovative technology facilitates intelligent and precise forecasting, order replenishment, production planning, and inventory management. The integration of this platform has not only boosted sales through enhanced on-shelf availability but has also led to a substantial reduction in food waste by ensuring a consistently fresher product inventory. Remarkably, this proactive approach has prevented a significant 20 tons of fresh food from being wasted each week across the retailer’s store operations.

Similarly, Stora Coop Visby, a leading supermarket chain in Sweden, adopted Invafresh’s innovative expiry management tools that streamlined the process of identifying products at risk of expiring resulting in a remarkable 86% reduction in food waste.

Maximizing returns through sustainable investments

The integration of technology holds immense promise in minimizing food waste while maximizing returns on investment for grocery retailers. By addressing overstocking through innovation, implementing proactive inventory optimization measures, and deploying reactive strategies such as expiry management and markdown optimization, retailers can achieve significant waste reduction while enhancing profitability and sustainability. Furthermore, investing in technology not only helps in reducing waste but also improves brand reputation, saves labor hours, and streamlines operations, leading to increased efficiency and cost savings. This underscores the pivotal role of technology in shaping a more sustainable and profitable future for the grocery retail industry.

With the rise of at-home cooking during the pandemic continuing alongside concerns about food prices, shoppers are turning to a combination of scratch cooking with semi- or fully-prepared items from grocery stores to craft their meals, according to new research. 

A “hybrid meal” could be sushi from a grocer’s deli counter as the main dish along with items like rotisserie chicken from the store with homemade mashed potatoes, or a pre-packaged salad with a sandwich made at home. FMI – The Food Industry Association says hybrid meals “can be one part of a meal or a complete meal for breakfast, lunch or dinner.”

This “hybrid meals” approach to at-home preparation is playing a growing role in consumers’ food-at-home eating.

In 2023, more hybrid meals accounted for consumers’ dinners than the previous year, while making dinner totally from scratch has dipped, according to the latest findings by FMI. 

“The shift to preparing meals at home, particularly in this hybrid method, has also cut into [the] consumption of restaurant meals,” Rick Stein, the trade group’s vice president of fresh foods, said during a recent press call. 

The rise of hybrid meals comes at a time when grocers have been beefing up their foodservice options. A quarter of surveyed shoppers said they are replacing restaurant meals with foodservice options, up from 17% who said the same in the previous year, per The Power of Foodservice at Retail report, which was published earlier this month. The report is based on a survey of 1,435 U.S. adult grocery shoppers between Sept. 13-22.

Grocers are already jumping on the trend of highlighting their deli-prepared options. ShopRite has been rolling out its Fresh to Table concept, which emphasizes a one-stop-shop for ready-to-cook, ready-to-heat and ready-to-eat options alongside private label items, to more of its stores this year. Department displays for the concept carry messages like “Rah, Rah, Rotisserie” and “Made with love for later.” 

Cingari Family ShopRite, a family-owned chain with a dozen Connecticut stores, has said the price point and size make its prepared salads a popular alternative to ones from restaurants. 

Deli dollar sales grew to $49.9 billion in the 52 weeks that ended Oct. 27, up from 4.2% during the same period a year ago, according to NielsenIQ data cited by FMI in the report.

“It’s clear that shoppers increasingly appreciate the convenience and value that foodservice at a grocery store offers, whether it be to help round out the home-cooked meal with freshly made sides or supplying an entire meal that customers can cut can eat at home, which is cheaper than food at restaurants,” Stein said during the recent press call.

The appeal of foodservice largely links to cost concerns. Despite the rate of inflation easing in the past few months, 72% of surveyed shoppers express concern about rising food prices at grocery stores, FMI noted in another recent report. 

Foodservice is also standing out as an opportunity for some consumers to make choices aligned with health and well-being. FMI’s research found that almost two-thirds of shoppers said they shop for deli-prepared foods with at least some focus on nutritional value.

Already, retailers have invested in chefs and specialty staff, increased their space allocation and enhanced their variety of food options in an effort to re-energize food service departments, Stein said.

The grocery industry still has some areas to improve upon, FMI noted. Grocers’ foodservice can become even more appetizing by providing a wider variety of cuisine, online ordering capabilities and easy pick-up or delivery options, the trade group found. Grocers need to switch to a restaurant-like mentality for foodservice and deli, Stein said. 

Meal planning, in particular, is an area where consumers struggle, Stein said, noting that bundling ingredients together can help. In addition to bundles, FMI’s research found that more heat-and-eat choices, meal-focused end cap displays and meal-planning tools on retailers’ apps are top consumer picks. 

Other strategies highlighted in the report include:

• Serving up “signature” foodservice items 
• Highlighting how far shoppers’ dollars go at retail compared to restaurants
• Offering up an online foodservice menu like a restaurant 
• Having dedicated marketing focused on spotlighting foodservice 
• Drawing attention to items and attributes that better meet shoppers’ nutrition and health needs.

Hybrid meals appear to have a bright future. More than half of surveyed consumers said they plan to eat more at home (53%) and cook more at home (52%) in 2024. Meanwhile, only 14% said they plan to dine out more this year, per FMI’s research. 

“Clearly shoppers are responding to these changes and foodservice at retail is more on their radar than ever before,” Stein said. 

Kroger announced in January that it has reformulated deli and bakery items under its store brands. The refreshed items include Home Chef fried chicken and Private Selection brand cinnamon rolls and crumb cake. 

Kroger said that its reformulations aim to improve already popular products. The updates come at a time when grocers have worked to elevate their private brands, which typically yield higher margins and appeal to cost-conscious consumers.

For example, Home Chef’s fried chicken is now double-breaded and hand-dipped with 18 different spices and has new packaging to retain its crispiness for longer. Meanwhile, its Private Selection Signature buttercream cakes now use real buttercream.

Kroger added French baguettes ($1.49 per loaf) that are made fresh daily in-store with no preservatives or chemicals to its Private Selection line. That line will soon debut reformulated croissants, according to the announcement.

The grocer studied product characteristics like flavor profile, freshness and packaging, Dan De La Rosa, Kroger's group vice president of fresh merchandising, said in the announcement. 

Kroger’s store brands’ “fresh and prepared products have long been basket staples for customers because they are high-quality, affordable items that can be the center piece of a meal or the perfect side or finish to a weeknight dinner, family breakfast or gameday spread,” De La Rosa said. 

Customers can shop the new items in the deli and bakery section of Kroger’s banners, according to the announcement.

In announcing the reformulations, Kroger highlighted ways for customers to save money, from its digital ad to its Boost by Kroger Plus delivery membership and store card with Mastercard. The grocery chain’s promotion of its coupons and membership comes at a time when many consumers are continuing to fret over their spending, especially at the grocery store.

Private brands, in particular, are appealing to consumer demands. Fifty-four percent of surveyed shoppers said they plan to buy much or somewhat more store brands in the future, compared to 26% who said the same for name brands, FMI – The Food Industry Association said in a report released last fall.

Dollar General now offers fresh fruits and vegetables at more than 5,000 locations, pushing the discount chain past a goal it laid out early last year.

The retailer is also deploying AI-based perishable food-ordering technology from Shelf Engine and plans to bring the platform to about 3,000 stores by the end of fiscal year 2023.

This push to bring fresh food to more stores has come as the retailer has shaken up its strategy in a bid to improve its financial performance. The company runs more than 19,000 stores in 48 states and is continuing to expand its footprint, although it plans to add fewer stores in 2024 than it did last year. Dollar General posted better results than analysts had expected during its latest quarter, when it opened 263 stores, but would have lost market share during the period without the new locations, according to analysts.

Jeffery Owen, Dollar General’s former CEO, announced the company’s intention to offer produce in at least 5,000 stores by the end of 2023 during an earnings call last March — just a few months before he was dismissed from his post “to restore stability and confidence.”

In a January press release about its produce expansion, Dollar General drew attention to the role it plays in providing access to grocery staples. About 80% of the retailer’s stores serve communities with a population of 20,000 or less, and people in these areas often depend on Dollar General to purchase essentials like milk, eggs, cheese, and frozen and canned vegetables, the company said.

“We are constantly looking for ways to better serve our customers and one of our top priorities is to ensure the communities we call home have access to fresh, affordable, and convenient food options,” Emily Taylor, Dollar General’s executive vice president and chief merchandising officer, said in a statement. 

Dollar General added that it now distributes produce at more individual locations than any other grocer or mass retailer in the United States, although the company offers consumers a much smaller selection of perishables than its competitors. The retailer’s “curated assortment” of fresh fruits and vegetables includes tomatoes, apples, strawberries, potatoes, lemons and salad mixes, according to the press release.

In addition to adding fresh foods to additional locations, Dollar General has taken steps to boost sales of frozen and refrigerated items through an internal distribution initiative known as DG Fresh. The company believes DG Fresh could allow it to eventually bring produce to more than 10,000 stores, Owen said during an earnings call last August.

Grocers are building out their fresh meat offerings through full-service counters as shoppers continue to seek the classic butcher shop experience from their local supermarket.

As ramping up the in-store experience becomes a vital step for grocers post-pandemic, full-service meat counters has become a way to beef up their offerings and draw in customers with fresh cuts as well as human connections.

Fresh meat sales in December ticked up 2% compared to the same month last year, reaching $5.9 billion while processed meat sales dipped 4.4%, totaling $3 billion, according to Circana data cited by 210 Analytics.

As grocers face growing competition from mass retailers for meat department sales — the latter gained 2% in meat department sales from 2019 to 2023 while traditional grocery saw sales shrink 3% — meat counters are one way they can cut a larger slice of fresh meat sales.  

Fareway Market, for example, has been capitalizing off the growing meat industry in recent years by opening Fareway Meat Market stores, each with a “second-to-none, full-service butcher counter,” according to a recent press release. Shoppers don’t have to go to a Meat Market location to get the full-service counter experience: Fareway’s regular grocery stores have a virtual meat counter so customers can “learn how to be best prepared for [their] next trip to Fareway,” the grocer’s website noted. 

Fareway’s butchers, like many meat experts staffed behind other grocers’ full-service counters, are available to assist customers. Butchers and trained meat associates offer guidance on making premium selections, provide advice or inspiration and address special requests, FMI — The Food Industry Association’s 2023 Power of Meat report said. 

Here’s a breakdown of the most popular items shoppers purchase from grocer’s full-service meat counters, and a look at the category’s sales over the past few years.

Data insights

Consumers gravitate towards full-service counters rather than self-service cases mainly when they are seeking out advice or have questions for the butchers, such as the thickness of cuts or how much they should purchase. Aside from communicating with a grocer’s meat experts, a full-service counter provides a place for “premium” meat cuts to stand out, according to FMI’s findings. 

 

Fresh meat sales skyrocketed in 2020 to more than $55 billion, according to Circana data. While still increasing slightly for the last two years, meat sales saw slower growth just shy of 5% in 2022 and less than 1% in 2023. 

 

Stand-out grocers

A peek into the cutting room

One of Whole Foods Market’s most show-stopping locations resides in Manhattan where the retail destination has not only grab-and-go meals and opportunities for in-store dining and education but also a meat-cutting room on full display. 

The window puts full-size cuts of meat as well as the grocer’s trained butchers in full view of customers to both inspire and educate. Shoppers have the opportunity to ask the butchers questions about selecting cuts, portion sizes, thickness, marinades and cooking guidance.

Carrying on a North American butcher legacy

Canadian grocer Freson Bros. views its meat department as not just a counter but as a part of its history. Alongside meat cuts like cross rib roasts, porterhouse steaks and bone-in sirloin steaks, Freson operates a dry age hanging beef program in every store. 

The grocery chain offers custom orders of Alberta dry-aged carcass beef and sources from Alberta’s livestock for its beef, pork, chicken and turkey selections. Freson also exclusively offers sausages made in-store.

 

 

 

 

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When faced with the choice between fresh meat and processed meat, customers seem much more likely to select fresh meat. While both categories saw year-over-year dips in volumes in 2023, processed meat saw a steeper decline of 3.2% compared to fresh meat, which dipped just 1.4%, according to Circana data cited by 210 Analytics.

With grocers eyeing ways to offer in-store experiences and shoppers gravitating toward fresh meats, establishing an eye-catching full-service meat counter could be in grocers’ best interests. FMI’s 2023 report noted that these full-service counters give food retailers a “perceptual advantage.”

Fresh off a successful pilot of technology that rapidly notifies shoppers when locally grown produce arrives in stores, Schnuck Markets has decided to roll out the capability to more of its supermarkets this year.

The system, supplied by Montana startup Foodshed.io, uses tracking devices placed in produce bins to monitor foods as they travel from a farm to a Schnucks store and triggers an alert via the grocer’s loyalty program app when a shipment reaches its destination. Foodshed.io sends the alert on to Schnucks’ loyalty program staff, who broadcast a message to shoppers who have signed up to let them know the item is ready for purchase. 

Schnucks tested the concept at a handful of its 115 locations last summer and concluded that providing shoppers with the ability to know right away when certain fruits or vegetables are available would help it stand out against other grocers on a larger scale, said Mike Tipton, Schnucks’ vice president of produce and floral.

The company has not yet determined which of its stores will offer the service when the next growing season rolls around, he said.

“Local is real big and it’s got a big buzz, and we’re trying to find different avenues to touch the consumer and let them know about the items that that they’re really engaged with and are looking forward to when they come in season,” Tipton said. “It’s one of those differential advantage that our competition like Walmart and Aldi are not doing.”

Foodshed.io supplies the reusable sensors to growers, and the company shares the cost associated with the service with Schnucks, according to Dan Beckmann, co-founder and CEO of the technology firm.

Tipton noted that Schnucks is limiting the system to produce that shoppers in its service areas make a special point of trying to buy at the peak of freshness — like corn, melons and cantaloupes — generally within a day or two of when they are harvested.

“People gravitate to buying local produce, and we like to do the best job of it in our communities,” Tipton said, adding that sourcing local fruits and vegetables is challenging in the states where Schnucks operates because the growing season is relatively short. As a result, Schnucks plans to offer the service only during July, August and early September, when farms located within range of Schnucks’ stores typically harvest produce, he said.

A focus on personalization

Schnucks’ decision to deploy Foodshed.io’s produce-tracking technology on a larger scale reflects a broader effort by the grocer to use digital tools to customize the shopping experience for its customers, said Cristina Preston, who handles digital marketing for Schnucks.

“We always promote with in-store signage, and we are very loud and proud about having local products — and specifically produce — but we are moving into a digital world,” said Preston, adding that Schnucks believes the produce alerts could encourage people who might not have intended to go shopping that day to head to the store.

“We have personalized offers and personalized value that meets that customer right where they're shopping, and this is a piece of that,” Preston said. “We're trying to soften [technology] a little bit.”

Schnucks’ relationship with Foodshed.io began about five years ago, when the companies began working together on efforts such as helping growers gauge how much of a given product they need to produce to meet the grocer’s needs so supplies don’t run out, according to Tipton.

“It’s our goal to get the customer local produce in the summer all the time” unless bad weather or other unforeseen conditions make it necessary for Schnucks to look elsewhere for supplies, he said.

Schnucks also uses information it collects with Foodshed.io’s technology to help ensure farms the grocer works with maintain records related to food safety, Tipton said.

In addition to working with Schnucks, Foodshed.io has talked with The Fresh Market about using its technology, Beckmann said. The company has also been in touch with an unnamed “national grocer,” he said, noting that Foodshed.io has an exclusive arrangement with Schnucks in the areas where the grocer operates.

Based in St. Louis, Schnucks runs stores in Illinois, Indiana, Missouri and Wisconsin under the Schnucks, Schnucks Fresh and Eatwell Market banners.

Beckmann said Foodshed.io has started looking into ways to automate the process of drafting and sending messages to shoppers to invite them to head to a store when produce arrives from a farm, possibly by tapping generative artificial intelligence technology. “We not only just want to reduce the workload for that team, but we want to improve the personalization if we can,” Beckmann said.

Foodshed.io also plans to build tracking equipment that it could use in place of the third-party hardware it currently depends on, and already has a prototype in development, Beckmann said. The company’s goal is to lower costs while adding more features, he said.

While Foodshed.io is focused on its role as a technology supplier to retailers, the company also feels a deep connection to the contribution it is making to the fresh food industry and sees its technology as a way to help reduce food waste, Beckmann said.

“An unintended consequence here is that these farms are stronger because Schnucks has made this commitment, and they’re able to sell [produce] to restaurants and other parts of the community now in a way that’s more stable,” he said.

When Hy-Vee opened its largest supermarket to date last summer in Gretna, Nebraska, customers were greeted by a large food hall in addition to numerous aisles of groceries.

At the food hall, customers can find an expanded breakfast menu, a pub with 32 taps and several fast-casual offerings including Mia Italian, HyChi and Hibachi, Nori Sushi, Market Grille Express, Long Island Deli and a Wahlburgers. The 135,000-square-foot store offers indoor seating situated near the food hall, while the pub has sit-down options along with an outdoor patio.

Hy-Vee’s food hall is an example of just one of the ways that grocers are getting creative as they look to snap up more of consumers’ meal dollars. As the gap between grocery and restaurant prices widens, grocers see an opportunity to lure cost-conscious consumers to their stores by touting their made-to-order options. 

Some grocers have long brought restaurants and bars to their customers with their own in-store brands, such as Wegmans’ cafes, restaurants and burger bars; H-E-B’s True Texas BBQ in-store restaurant chain; and Southern California chain Gelson’s wine bars. 

Now, more grocers are turning up the heat on their culinary experiences — with some even crafting their stores around meals.

Crafting a proprietary culinary experience 

Chicagoland grocer Dom’s Kitchen & Market is one such company. Focused on creating an experience centered around meals while also broadcasting a message of affordability, Dom’s is looking to blend restaurants with food retail at a time when costs are in favor of grocers. 

At Dom’s, The Kitchen — the name the company uses to refer to its array of foodservice and culinary offerings — is the “heartbeat” of its stores, said Dom’s CEO Don Fitzgerald. There, customers can find proprietary restaurant brands, like The Stackup sandwich and burger shop, Gohan sushi and poke bowls, and L’Osteria Italian dishes. 

Dom’s also offers grab-and-go items like sandwiches, salads and other premade meals under its store brand.

While Dom’s positions itself as an upscale meal solutions option, affordability still matters across income demographics — as evidenced by Walmart’s ability to continually nab higher-income shoppers looking to save money in recent months amid high food prices. 

“If you compare it to restaurants and the costs now — inflation, service charges, tipping, delivery charges — we offer a really high-quality product that’s affordable for a lot of folks,” Fitzgerald said. 

While consumers may continue to choose restaurants for certain occasions, Dom’s is emulating restaurants to be on par. 

“Restaurants do really well in terms of hospitality and customer service and the delivery of food,” Fitzgerald said. 

To complement the meal options, Dom’s is focused on creating an ambiance where consumers want to stay and hang out, with “comfortable” and “approachable” seating and lounge areas to have a meeting, play chess, host a book club or bring a date, Fitzgerald said. 

Similarly, The Fresh Market’s recently opened store in Port St. Lucie, Florida, features a center store culinary kitchen called The Square offering items from recipes developed by the specialty grocer. 

At that store, customers can get customizable brown rice bowls, salads, sandwiches and chicken tortilla soup with lime crema from a made-to-order station. They can choose from fresh hot foods, including smoked salmon, BBQ sold by the pound or as a platter and rotating seasonal hot sides. 

Cooking up partnerships

For some grocers, beefing up their foodservice offerings involves collaboration. Ahold Delhaize’s Giant Food banner, for example, recently rolled out three different in-store offerings featuring well-known local restaurants. 

Last March, Giant Food opened its first in-store fast-casual restaurant in partnership with Maryland-based chain Nalley Fresh at its Ellicott City, Maryland, store. The in-store restaurant serves up customizable salads, wraps and bowls that Giant Food markets as “healthy and fresh meal options to further elevate the in-store shopping experience.”

At a store in Elkridge, Maryland, the banner this summer debuted a Ledo Pizza Corner Shoppe with take-and-bake and “order hot from the oven” pizza options, building on the grocer’s existing partnership with the Annapolis, Maryland-based pizza restaurant chain that has included selling jarred versions of Ledo’s sauces. 

Ledo pizza now is available at “select” Giant Food stores with plans to bring the Ledo Pizza Corner Shops to more locations, especially as remodeled ones, Giant Food Director of Deli & Bakery Cindy Volk said in an email. 

“We have been doing a rolling launch of this program to ensure that we are maintaining the highest standards and quality of product. … We are excited to continue to grow this program as our launch has been very successful,” Volk said. 

 

 

 

 

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Also last summer, Giant Food teamed up with Ben's Chili Bowl to sell half smokes, chili and chili sauce from the famous Washington, D.C., restaurant in the prepared food sections and hot bars at stores throughout Washington, D.C., Maryland, Virginia and Delaware. 

“We have seen an overwhelming positive response to the launch of Ben’s Chili Bowl in our stores. … Our customers love that they can now get the same delicious secret family recipes [from Ben’s Chili Bowl] at their local Giant,” Volk said.

Giant Food is “very intentional on who and how we partner,” Volk said, noting that it took the grocery chain a few years to develop its partnership with Ben’s Chili Bowl. 

Other grocers are also taking the partnership approach. At its store in Chicago’s Old Town neighborhood, for example, Dom’s customers can find Roman-style pizza from Bonci, an Italy-based pizzeria that has an exclusive partnership with the company. 

For Giant, its in-store restaurant offerings are less about competing with restaurants and more about improving access to established offerings that its customers already crave — while also getting a slice of the sales. 

“Our customers are constantly looking for quick, delicious, affordable meal solutions and these unique partnerships allow our customers to have easier access to their favorite local restaurants and brands,” Volk said.