June/July, 2004

From the Editor

Reshuffling Deli

Deli executives who had the opportunity to visit Chicago last month for both the Food Marketing Institute (FMI) and the National Restaurant Association (NRA) conventions must have felt a bit displaced. After all, one show is retail and the other is foodservice, so as supermarket delis encompass aspects of both retail and foodservice, the deli department floats suspended in a netherland between both worlds.

However, visiting both venues is a big opportunity, and the exercise of seeing both aspects of the deli opens one’s mind to the possibilities that few know how to address.

On the manufacturing side, big companies switch deli back and forth between their retail and foodservice divisions almost annually as they try to find the right way to address supermarket delis.

Top supermarket executives struggle, too. Sometimes they want to milk a profitable old cow that sells sliced meats and cheeses to a public well conditioned to shop for sliced ham and sliced cheese at the deli counter. Other times, however, supermarket executives look to delis to bring restaurant quality, ready-to-eat food to consumers as a way of winning “share of stomach” away from restaurants. Still other times, they want the pizzazz of ethnic foods, the high-end appeal of prepared specialties and the distinctive nature of custom offerings.

These are big battles: should a deli have a restaurant, a pizza program, a wok station, a Mexican food bar, etc., or is this asking too much of one department? Each chain must, of course, look at its own stores, its own customers, its own neighborhoods and make its own decisions.

But little things matter, too. And the buzz from NRA is that there is a lot of life in very traditional deli products. Standing near the booths of marketers of traditional deli meats and cheeses, I heard many operators of Italian restaurants, which may use the products only in an antipasto or an Italian sub, actively exploring what other offerings they could make with deli products that would sate the low-carb customer.

Although some supermarket delis do a terrific job with merchandising prepared and ethnic foods, almost nobody does a very exciting job, or even a particularly adequate job, of merchandising at the traditional service deli counter or at the case.

In fact, most delis don’t really do any merchandising at all. They put the same meats and cheeses in the same place in the same display case day after day. To rouse buying interest, they post a sign announcing a sale on low quality ham.

Most often they use a cutting-edge signage device, such as writing the sale on the back of a paper plate and taping it to the deli counter. Some deli directors, whom I assume must be joking, tell me they rely on personal salesmanship by the deli counter personnel to gain consumer trial of new and interesting products.

I say they must be joking because virtually everywhere across the country, if you walk into a supermarket deli within an hour of closing, you get an angry snarl because your order means someone has to dirty the slicing machine that was already cleaned in the hope of making a quick getaway.

So if there is no real merchandising effort and salesmanship is unreliable, where does that leave the deli counter? Well, in the age of the Atkins diet and other low-carb variants, it leaves the deli with substantial upside potential.

Every deli counter in the country should be highlighting a low-carb lunch and dinner special every day of the week. McDonald’s has announced that all its restaurants will offer a hamburger without a bun served instead on a bed of lettuce. Other fast-food restaurants are offering burgers wrapped in lettuce leaves. Every sandwich on the deli menu should be available prepared with a low-carb wrap or served with greens.

Suggestive selling techniques must be used in the form of signage. How many people love sliced corned beef or pastrami but just don’t have it on their normal shopping list?

Offering ideas, recipes and alternatives for meal choices is always a good idea. But, normally, people are stuck in their ways. What makes the low-carb trend so great for food marketers is that adults, whose eating habits are notoriously difficult to change, are suddenly looking for new things to eat.

My supermarket deli began selling horseradish cheddar. This brand new product sat there on the shelf with no promotion, no sampling, no suggestions. The clerks at the counter had never tried it and didn’t know about the traditional tie-in between roast beef and horseradish. I love the stuff and I’ve turned a number of friends on to it. But the deli case presentation isn’t selling anybody anything.

Executives at the deli department have to consciously commit to great merchandising. The associates in produce tend to merchandise naturally as the marketing responds to the natural ebb and flow of the seasons. The colleagues on the grocery aisle tend to always be resetting end aisle displays and seasonal promotions in response to massive promotional monies from big grocery marketers.

But almost all deli products are 52-week-a-year items, and few deli marketers fund extensive promotions. That leaves a window for a deli director to differentiate his department by simply looking for ways to market every day.

Perhaps the exhibit floor at the IDDBA is a great place to start. It is entirely fair to ask suppliers not merely what they have to sell but how they can help retailers sell it.

Atkins and its ilk are a great reshuffling of the deck. Deli has a winning hand. We just have to play smart.  DB