Fresh food sales are picking up online, a trend that was largely catalyzed by the pandemic, according to a new report from the Food Industry Association (FMI). In response, retailers are ramping up fresh food offerings in-store and online.
According to FMI’s 2022 The State of Fresh Foods report, fresh or perimeter departments comprise 40% of all grocery online sales, nearly matching dry grocery online sales, which account for 41% of online grocery sales. Fresh foods far surpass online frozen food sales (11%).
Produce captured the lion’s share of online fresh food sales (11%), followed by meat (10%), dairy (8%), deli (5%), in-store bakery (2%), fresh prepared/foodservice (1%) and seafood (2%).
Leslie Sarasin, FMI’s president and CEO, pointed to the pandemic as a key driver behind growing fresh food purchases. “The pandemic changed Americans’ grocery shopping and cooking habits, with more of us enjoying meals at home with family members,” she said in a press release. “These broad-level changes particularly impacted fresh foods departments, and even as we shift to more in-person activities, shoppers continue to rely on their grocery stores for fresh food items.”
To meet growing consumer interest in fresh food items, retailers and suppliers are enhancing their offerings both in-store and online, Sarasin said in the release.
The report showed the vast majority of food retailers (82%) are re-envisioning their fresh food departments to add space for fresh-prepared grab-and-go options. In addition, some retailers are increasing space for fresh-prepared chef made-to-order stations (35%) or fresh-prepared self-service (29%).
Further, nearly half of retailers (48%) plan to expand space for fresh produce. To fill added space, 62% of retailers are planning to add more organic produce. There’s also growing emphasis by retailers on locally sourced products—in fresh foods and throughout the store. More than 70% of retailers are increasing SKU allocation (in-store or online) to locally sourced products.
To attract consumers to brick-and-mortar stores, retailers are elevating customer experiences around the perimeter, adding such services as produce programs, including produce butcher and specialty produce (70%); in-store bakery (68%); meat/poultry programs (65%), including service counter and custom cuts; and seafood programs (60%). Retailers are planning to hire more employees for such ventures, including specialty help by department (such as in-store butchers, produce butchers or cheese mongers, 25%) and scratch bakers or pastry chefs (18%).
Retailers are also experimenting with foodservice experiences. Almost 7 in 10 (69%) of retailers offered shoppers at least one foodservice option, and 44% expect to increase their labor allocation for foodservice in the next two years. Popular service strategies among grocers included in-store dining (51%), a coffee bar (39%), online ordering and pickup/delivery of foodservice offerings (33%), catering services (30%), a juice bar (20%) and a full-service restaurant (13%).