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Ryan Barnes, director of delicatessen sales and marketing for Associated Food Stores

The item at AFS that drove up foodservice sales by 20%

Associated Food Stores is also adept at balancing its outsourcing vs in-store strategies

Sprouts executives recently told analysts that deli was the fastest-growing category in 2022, and that the company was becoming more efficient in its deli strategy. After testing a prototype with a larger space dedic (2).pngAs the director of delicatessen sales and marketing at one of the nation’s largest independent grocery cooperatives, Ryan Barnes is juggling the demands of literally hundreds of retail foodservice programs at once.

A former foodservice consultant who joined the staff of Salt Lake City-based Associated Food Stores about 10 years ago, Barnes orchestrates a blend of outsourced prepared foods and in-store craftsmanship for the co-op’s retailer operators. He seeks to help retail members balance their needs to both manage their labor costs and drive higher sales, while also doing the same at the company’s network of about 40 corporate stores.

“We meet very often to determine what is best for our independent retailers and our corporate-owned division,” said Barnes. “We look at what’s on trend, what’s moving and what makes sense for us to do in store, and what makes sense for a partner to do.”

He said the company seeks to identify the prepared foods that require a high level of in-store labor but don’t actually help differentiate retailers from their competition, and then looks to outsource those items to a carefully vetted commissary-style provider. Prepared foods that provide meaningful differentiation, such as hand-breaded chicken, are retained.

By outsourcing some of their high-labor prepared foods to third parties, AFS stores derive multiple benefits, Barnes explained. Consistent quality across store locations is one key benefit, as is reliable supply, both of which help boost sales of adjacent, ancillary items, such as cheese balls and dips, which have seen double-digit sales gains, he said.

Another key benefit of outsourcing is the ability to reallocate some labor to perform more customer-facing responsibilities, he said.

“Now that [workers] are able to get things out onto the shelf more quickly, they may be able to engage with our customers in a way they haven’t when they were spending more time in the back room,” said Barnes.

One of the company’s most successful prepared-foods initiatives, which exemplifies its strategy to mix in-house and outsourced offerings, is its smokehouse program, Barnes said. The program revolves around brisket, smoked pork ribs and pulled pork, which are smoked in-house at all corporate stores and by dozens of the co-op’s member retailers that have smokers. Other retailers in the AFS system are able to implement the program by procuring the same product from an outsourced smokehouse that uses AFS’s recipes.

Associated Food StoresSmokedMeats_AssortedTray_AFS-5.jpg

Some items from the AFS smokehouse program.

“That’s been a massive gain for our retailers to be able to compete in that restaurant space in their communities,” said Barnes.

Some retailers set up carving stations for the smoked meat products, and others package them as grab-and-go-meals such as sandwiches and mac-and-cheese with brisket on top. Another popular merchandising tactic is to set up a smoked-meats station near the front door of the store on the Thursday, Friday and Saturday before a football game, for example, to capitalize on the need for game-watching and tailgate-party fare.

The smokehouse program is one of several comfort-food-style prepared-foods offerings that have been successful for AFS, Barnes said. The company also offers a pizza program and a sandwich offering that Barnes described as “plug-and-play” for retail operators to implement.

Looking ahead, AFS is planning to focus on more on custom cheese and charcuterie offerings, as well as globally inspired dishes to meet consumer demand for those items, Barnes said. Consumers are especially interested in Indian dishes, as well as Mediterranean and Middle Eastern flavors.

This feature is part of our 2023 "SN Foodservice at Retail Innovators" list: see more innovators here.

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