Facing a prolonged recession, many shoppers have put the brakes on their spending, focusing on necessities and eschewing luxuries. So, at first glance, it might seem unusual that refrigerated, packaged side dishes have bucked the economic trends to emerge as a robust and growing category during the past couple of years.
The reasons are simple: Shoppers really are trying to cook more at home to save money. However, preparing dinner for a family of three or four is still a challenging, time-consuming proposition. Paying a small premium for a premade side dish or two allows mom or dad to focus on the entree, and cuts prep time considerably.
“Sales of those sides are up significantly in both our deli and meat departments, with mashed potatoes the best seller,” said Tanney Staffenson, advisor to Lamb's Thriftway, Portland, Ore.
“Reser's is a local product for us. So is Harry's [Fresh Foods], and they're both doing great. Right now, we don't have a private label, but I imagine we will soon [from Unified Grocers, Lamb's supplier].”
“All our prepared foods are up. People are eating at home more. Not eating out as much. It's good to see the trend reversing,” Staffenson said. “Our barbecue grill program's sales are up 20% year-to-date.”
And that's not from a small base, either. Lamb's has had the barbecue grills, a version of a rotisserie program, turning out such entrees as planked salmon and tumbled meats for years.
By design, the five-unit independent merchandises packaged, refrigerated sides within a few feet of the prepared-food area, Staffenson said.
Whether they're buying a prepared entree or picking up a steak or a pot roast to cook at home, many shoppers will be looking around for a vegetable or starch to add to their meal. And even for shoppers who are planning to cook part of a family meal themselves, prepared sides offer an inexpensive, convenient solution for saving time in the kitchen.
Within the category, mashed potatoes reign, chalking up the highest sales increases for the 52 weeks ending in January 2009, according to market research firms Information Resources Inc., Chicago, and ACNielsen, Schaumburg, Ill.
Nielsen figures show that in the food, drug and mass channels, dollar sales of packaged refrigerated mashed potatoes rose 4.8%, while refrigerated, mashed sweet potatoes shot up 10%.
Retailers and other sources agree that the future looks bright for these types of items, even as the nation slogs through a gloomy economy. In fact, some said the category is a natural fit for expansion into private-label programs.
“Side dishes are growing in popularity as consumers increasingly turn toward eating more meals at home. While they're eating at home, they still face the same practical issues — not enough time to cook, no knowledge of how to cook and no time to clean up,” said Neil Stern, senior partner at McMillan Doolittle, a Chicago research firm.
“Prepared side dishes make it easy to put a meal on the table, while being more economical. As they grow in popularity, they create a natural private-label opportunity for retailers and allow for more bundled meals.”
The refrigerated packs create convenience for the retailer as well as for the customer. They maintain their integrity — as opposed to hot sides — and there's little or no shrink. So, as one retailer said, it makes good sense to offer hot entrees, with maybe a couple of hot sides, but also a temptingly large variety of refrigerated products within easy reach.
“The movement toward slow cooking is growing rapidly, and items such as meat loaf, pot roast, rotisserie chicken, kabobs and more are becoming favorites,” said consultant Ira Blumenthal, president of Co-Opportunities, Atlanta, and keynote speaker at the Refrigerated Food Association's annual conference this week in Orlando, Fla.
“Supermarket operators who bundle or co-market these entrees with a wide range of refrigerated sides are starting to win big time.”
Consumers, Blumenthal added, value the “fresh” aspect of refrigerated items — as opposed to similar frozen options — as well as the convenience they offer.
Even in size — one or two servings per package — refrigerated sides are right for today's economy-minded shopper, some retailers pointed out.
“Our customers are spending carefully. They're conscious of not being wasteful, so they'll buy smaller quantities,” said Mike Huegel, deli-bakery buyer for Stauffers of Kissel Hill, a three-unit independent based in Lititz, Pa.
“They're buying only what they'll use up quickly, maybe a quarter of a pound of ham, instead of a pound. We've even had people ask for half a rotisserie chicken. Their minds are on the economy,” Huegel added.
“But our packaged, refrigerated side dishes, actually our whole prepared-foods program, has stayed pretty steady. Noodles, mac and cheese, potatoes — the comfort foods are doing particularly well.”
Other retailers told SN their packaged, refrigerated side dish sales either have held steady or have shown an uptick in sales in recent months.
“Our deli ‘Quick Takes’ [a large variety of side dishes prepared and packaged in the chain's central kitchen] are still selling well,” said Maria Brous, spokeswoman at Publix Super Markets, Lakeland, Fla., which operates 1,000 units across the Southeast.
“In our meat department, over the past 12 to 18 months we have added eight [refrigerated] side varieties, and have deleted one.”
Besides Diner's Choice and, in the Atlanta division, Bob Evans sides, the chain has added additional brands as well as new varieties.
In Texas, United Supermarkets, based in Lubbock, has seen “good sales growth of sides over the last year,” Diane Earl, director of deli and foodservice, told SN.
“Our side dishes are selling very well. We have not done anything new lately, but intend to have some new items in place by spring.”
One manufacturer, Bob Evans Farms, Columbus, Ohio, whose packaged, refrigerated sides racked up double-digit growth during the past year, according to IRI, added several new varieties to its line. In fact, the company has just launched two more: creamed sweet corn, and broccoli with cheddar. While its original mashed potatoes remain its best seller, the company is responding to consumer demand for variety.
“We wouldn't be making this investment [in new products] if we didn't see this as a strong category. We see a good future for it,” said Nancy Cowen, Bob Evans' senior director of marketing, food products.
“Consumers are looking for cost-effective convenience and quality. Those soccer moms want to put good meals on the table.”
Cowen pointed out that the Bob Evans brand of refrigerated side dishes is No. 1 in the United States on a volume basis. She also confirmed that private-label refrigerated sides are increasingly popping up.
“Private label in the category has become a strong segment of the business in our core markets.”
Many retailers, including McCaffrey's, Langhorne, Pa., have been reporting that sales of meat are up slightly this year — another likely indication that consumers are doing more cooking at home.
But as sources have told SN, people are still busy and can't, or don't want to, cook the whole meal. Putting a steak on the grill or a pot roast in a slow cooker is one thing, but what goes with it? It shouldn't be a surprise that many brands are chalking up strong sales of refrigerated sides that are cross-merchandised in the meat department.
Cowen said Bob Evans refrigerated sides have been found to sell better in the meat department than in the deli.
However, one consumer — a self-described “weekend gourmet cook” — told SN he appreciates being able to buy refrigerated side dishes and other refrigerated accoutrements, such as pickled peppers and olive mixtures, at the supermarket deli.
“I can pick up those already-prepared things, and that lets me concentrate on preparing the entree,” he said.
While branded and private-label sides are selling well in the meat department, they also are doing fine in the deli, retailers said.
“Our prepared-foods program — we've developed it over the years, before the economic downturn — is still strong. Sales continue to grow in all categories, including refrigerated side dishes,” said Scott Miller, assistant to Donald Rouse, co-owner of Rouses Markets, Thibodaux, La.
Rouses maintains an extensive variety of packaged, refrigerated side dishes near its hot foods, including regional favorites such as “dirty rice” and Cajun-spiced squash, Miller said. They're not private label in the sense that an outside processor makes them, he was quick to point out.
“We pack them in-store, in small containers with a lid and tape, and a label that says ‘Rouses.’ The [simple] packaging is deliberate, to make it obvious they're freshly prepared and packed in-store. We can do that kind of in-store production, since we're still pretty small, just 35 stores.”
The next project on the board is to make a small section at the meat case for the in-store packed, refrigerated sides, Miller said.
Meanwhile, plans are in the works for soups to be made to Rouses' specifications by an outside source, and later some side dishes as well, Miller said.
“That'll give us a lot more variety. Even now, I believe, from looking around the country, we have more variety of refrigerated sides than just about anyone.”
“I see a very strong future for sides and the whole prepared-foods category,” Miller said. “Retailers have gotten better at making prepared foods over the last few years. We've gained the public's confidence.”
Staffenson at Lamb's Thriftway agreed.
“It's probably the economy in most cases that is bringing more people to the prepared-foods department, but they'll see the quality is there, and I don't think they'll forget it.”
Market researchers are making favorable projections for the category. In fact, Mintel, a Chicago-based research firm, forecasts strong sales for years ahead, with increases of at least 9% each year from now through 2012.