August/September, 2011

From the Editor

Old Ways No Longer Work

To be master of one’s own fate is inspiring and burdensome. Deli executives at retail know this because, more than in any other department, they are the masters of their own fate and the fate of the department they run.

The deli department offers the flexibility to adjust product offerings to stay in line with the latest trends. If Mexican cuisine is hot, one rolls out the Mexican food bars, but if the winds of fashion blow from China, one sets up wok stations. If the trend is back-to-basics and home-style cooking, the rotisserie does chicken and meat loaf. And if people want a walk on the wild side, cook duck or add some zesty flavorings to the chicken.

Of course, riding the trends to success is easier said than done. It is hard to know which trends are here to stay and thus justify investment. Plus there is an institutional imperative to keep doing things long after doing those things stops making sense.

The deli has undergone transitions many times. Few sell the pimento loaf and other processed products that were once mainstays, and the move to whole muscle meats helped the deli remain relevant. Same with cheese. Once it was enough to sell just a few slicing cheeses; now a deli without a decent specialty cheese selection isn’t much of a deli at all. Not all that long ago, the “appetizing” department was proud of its smoked fish selection, and a good deli director knew how to de-bone herring as a matter of course.

Yet the transition ahead for delis may be more difficult than the transitions that have gone before.

The core products — sliced meat and cheese for sandwiches and cole slaw, potato and macaroni salad, as well as old standbys such as tuna and egg salad — are all caught in declines that will not easily be arrested. Prepared foods, once seen as the savior for the department, have less appeal in economically tough times.

Three big challenges confront the deli:

First is the change in what kinds of foods people will be consuming. The government’s efforts to encourage higher produce consumption sync well with consumers’ interest in fresh foods, local foods and knowing who produced their food. Yes, delis sell salads and prepared foods are made with lots of produce, but much of it is processed in a way antithetical to the ethos of the day, which is increasingly seeking raw food and less processing, not vinaigrette poured over cucumbers to make cucumber salad or dressing added to carrot/raisin salad.

Second, beyond the food itself, consumers are seeking alternatives to the ubiquitous homogeneous presentation. They are losing enthusiasm for mass-produced products shipped everyday and displayed according to a plan-o-gram.

This issue is one of great difficulty for supermarket chains. After all, what supermarkets traditionally specialize in is really mass procurement and distribution. Sure, everyone in the trade has long known that micromarketing is important, but mostly that has been a matter of adjusting assortment around the edges to meet the needs of ethnic or religious groups or to accommodate a demographic.

It is a different matter entirely if the issue becomes a rejection of homogeneity itself.

Third, part of this movement to things artisan and to knowing who is behind one’s food is a yearning for contact and community. It is a desire to connect with real people. Yet this high-service approach is exactly the opposite of the trend to more self-service product.

One can imagine many ways to address these three overlapping trends. Delis could have large full-service, attended salad bars, in which human beings wearing gloves prepare customized salads at the direction of shoppers, a system common in college foodservice.

The food is fresh, each salad unique and, as with one’s favorite barrista at the coffee shop, one builds a relationship with individuals who make one’s salad.

Yet even to suggest such an approach is to raise a cloud of objections. The labor costs are too high, the volume too low. Consumers, whatever they say in surveys, really care about price, and the objections go on and on.

Still, the old ways won’t hold. People who eat a salami sandwich for lunch each day or for whom tuna fish on toast is a daily experience are dying off, and the success of the deli will depend on capturing the imagination of a new generation — a smart-phone generation conditioned to hold the whole world, literally, in the palm of one hand.

The best operators, such as Wegmans, have already adapted as they transformed their delis into festivals of fresh foods. They have used the shapes of crusty breads, the aromas of baking pizza, and the colors of fresh fruits and vegetables to create an environment in which there is warmth and a sense of place.

Success will require delis to become good at things they have not been particularly good at in the past. That is going to be a significant challenge, but the rewards for those who rise to the occasion are vast and the fate of those who refuse to do so will be dire.   DB