Retailers Seek Restaurant-Goers with Convenience Foods
Retailers blur restaurant line by offering healthy, convenient prepared foods in the deli area and frozen food aisles.
Grocery retailers are chock-full of foods, but they don't always offer what consumers want most, says Stephen Sidwell, founder and CEO of LYFE Kitchen Retail based in Atlanta.
Sidwell launched a line of good-for-you frozen foods after employing a personal nutritionist and chef to prepare "amazing" food for him that also was healthy and low in calories. He lost weight and got hooked on the delicious foods, he says.
Using steam-cooking technology, LYFE Kitchen developed a line of healthy, convenient frozen entrees now available in Costco, Whole Foods Market, Ralphs, Safeway and Publix. The company also has launched a restaurant chain offering healthy fare. "To a large extent, the frozen category has been given a bad rap. People think you can't have fresh, quality ingredients in the frozen category. We know that's not true," Sidwell says.
What LYFE Kitchen hopes to do by offering consumers convenient, better-for-you frozen foods can work in other areas of the supermarket as well, experts say. The deli area is a natural location for high-quality, good-tasting prepared foods items, particularly those that rival restaurant meals. "I think this kind of meshing of retail and restaurant is just kind of on the cusp. We'll see more and more of it. People like the concept," says Brian Darr, managing director of Datassential in Chicago.
Consumers want healthier options and more interesting flavor profiles, according to a new survey of 2,000 supermarket shoppers by Datassential. Increasingly, the prepared foods departments of supermarkets are competing with quick-serve and fast-casual restaurants, because that's where consumers are going to get the convenient meals and snacks they desire, Darr says.
But supermarkets have an opportunity to grow their prepared-foods sales, because the research suggests one-third of grocery shoppers don't know what's available in the deli and hot prepared areas of the store. Adding in-store signage and communicating the offerings through store circulars could build awareness, Darr says. Stocking breakfast and snack items also can build store traffic and increase register ring, he says, noting that those two areas have been growing for quick-serve restaurants.
Competing with Quick-Serve
To compete with restaurants, retailers need to make it easy for time-pressed shoppers to find what they want and check out, Darr says. Some retailers, such as Mariano's, have set up breakfast and snack areas in the front of the store. In the afternoon, the stores offer ice cream and gelato up front.
But LYFE Kitchen has found another promising location in the often-overlooked frozen foods aisle, and Darr agrees it warrants attention. "The crossover between restaurant chains and retail has been there for years, whether it's been frozen White Castle burgers available in frozen food or Uno's Pizza," Darr says.
By offering healthier options—such as a farmers market frittata with mushrooms, goat cheese and sweet potato hash, a Southwest breakfast wrap with masa corn crepe and black beans, and orange mango chicken with whole grains, kale and broccoli—LYFE Kitchen has been able to differentiate itself. LYFE Kitchen, which stands for "Love Your Food Every day," uses steam-cooking technology that results in better-tasting food, Sidwell says. Its frozen entrees are slated to be in 5,000 stores by Sept. 1.
"We've been amazed at how fast the retailers have been willing to work with us," he says. "Going from ground zero to being in 5,000 grocers is really fast traction."