Dive Brief:

• Target is testing a sustainable sushi line in select New York City locations, sourcing the product from Hana Group, which is the same supplier used by Whole Foods. According to Food & Wine, Hana Group owns 12 brands – Whole Foods’ Genji brand and Target’s Mai Sushi among them. 
• Target’s pilot program includes three New York City stores: Brooklyn's Fulton Street, Tribeca and Herald Square. Target does not have a sushi counter, so the product is prepared “a few miles away” in Long Island City, then delivered daily and sold pre-packaged in the stores' refrigerated section. 
• There are about two dozen sushi options at these Targets, including raw, cooked and vegetarian selections. Prices range from $8.49 to $13.49. 

Dive Insight:

Much has been written about Target’s struggle in the grocery channel, but the company has made serious progress within the past year as it sharpens its focus on store remodels, fresh products and expanded organic and produce offerings. The company has also made key supply chain improvements so perishables are fresher and delivered more efficiently. Target’s local wine and beer selections are another focus area in the company’s push to elevate its grocery business, and investors are optimistic about the revenue-generating potential.

Target’s small sushi pilot seems to complement these efforts. Driven by a number of demands – healthy, fresh, global flavor profiles, portability – sushi sales have grown by 13% in the grocery space, according to Nielsen. The research firm also reports that top retailers offer as many as 32 different types of sushi, enticing repeat purchases for those seeking diverse and unique flavors from on-the-go meals. 

The company’s pilot seems to be off to a good start so far, with Food & Wine calling the sushi “surprisingly good.” If sales reflect this early review, Target may have to figure out how to expand its sushi offerings across other divisions. Given the wide availability of sustainable seafood these days, it shouldn't face too many hurdles in expanding the program to non-coastal cities. However, it may face escalating costs, given the shipping, labor and product turnover involved.

Target's premium sushi may have the power to draw shoppers into stores, but first the company needs to effectively market the offerings. How is the retailer identifying this sushi line at the shelf level? Is it driving awareness through social media and other avenues? And is it communicating the line's sustainable values clearly? These are crucial questions that could determine the line's success. 

The silver lining is it that Target's smaller locations and remodeled stores, which are more focused on grab-and-go foods, should be a good fit for sushi as well as other unique prepared offerings. Grocery has been an afterthought for too long at Target, but the company, knowing how important food and beverages are in encouraging regular trips, is taking positive steps towards revamping the category.