The Dynamic Fresh
Food Frontier.

Sure, fresh has been a “thing” in the perimeter of your grocery store for a long time, but just because it has been around a while, does not mean it is all figured out. In fact, according to Supermarket News, 60% of retailers are expected to change their perimeter assortment next year.

So why all the action? Weren’t things booming during the pandemic? Well, yes and no. Yes, grocery did well, but the fresh departments such as bakery, fresh prepared, deli, seafood, meat and dairy were plagued by many of the same factors that debilitated restaurants. These departments are still experiencing challenges; however, the potential for growth and evolution is undeniable.

Our research team here at Foodmix recently completed a survey of more than 1,000 consumers

who regularly shop the perimeter, and the results reinforce the fact that the fresh perimeter departments are an evolving business. The study also highlights how consumers see these departments – and uncovers strengths to build off and weaknesses to overcome.

Let’s take foot traffic for example. The produce department enjoys the most robust traffic, with 91% of shoppers visiting the perimeter at least once every 30 days, while floral trails far behind, seeing only 15% of regular shoppers. As far as habitually visiting – again produce enjoys a wide margin at 81% claiming to visit “often” or “always.” Bakery, deli and prepared fresh get roughly half the habitual traffic, while floral enjoys a scant 11% of regular shoppers.

Additionally, our study examined important food-related attributes and associations and asked consumers which perimeter department “owned” those attributes, and which had some work to do. As expected, produce owned “healthy,” but interestingly did not have great associations with taste. The exception to that dynamic is when shoppers discuss brands that they love in produce. In these cases, taste is a defining attribute and is a key reason the brand is loved.

Other notable food-related attributes and associations with various departments identify strengths to build off – with bakery getting high marks for “great taste and crave-ability.” Deli seems to be struggling with an identity, and prepared foods dominate ratings for convenience. The opportunity to win more consumer traffic will lean on not only building off strengths, but also overcoming perceived weaknesses. The produce department needs to work on making produce easier.The bakery department is not seen as particularly healthy, nor are prepared foods. Prepared food departments struggle to deliver shoppers a compelling value proposition.

While there are a lot of additional data, the key finding for manufacturers and brands trying to penetrate the perimeter is that the door has not closed. Retailers are struggling to find the right product mix and build positive associations within each department. And while it is true that perimeter departments are hesitant to feature brands, the reality is that they will and are doing it in virtually every department today. The key is not necessarily lead with your brand but rather focus on helping the retailer leverage departmental strengths and overcome weaknesses. As that is done by those who establish themselves as category leaders, brand opportunities will emerge.

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