Listeria outbreak impacts deli meat market, grab-and-go options, Circana finds

“We have relied on [grab-and-go] as the growth lever for the lunchmeat category for at least two years now, going back to the beginning of COVID. Every retailer offers that program, and now even the big, major mass market retailers offer some version of that ready deli-sliced program. ... The Boar’s Head recall had a bit of an impact, but ... we were already trending down in deli meat [in volumes and dollar sales], and this recall did not help,” said Jonna Parker, principal II, fresh foods team lead for Circana.

Listeria outbreak changes how consumers purchase deli meat

In late July, Boar's Head Provisions​ recalled about 7 million pounds of its ready-to-eat meat and poultry products adulterated with listeria monocytogenes, a foodborne illness. This recall is changing how consumers purchase meats and what part of the deli department they engage with, Parker explained.  

Shortly after, BrucePac recalled approximately​ 12 million pounds of ready-to-eat meat and poultry products, after a similar listeria outbreak. The outbreak was first discovered after the US Department of Agriculture's Food Safety and Inspection Service found listeria in finished BrucePac products.

For September, deli grab-and-go lunchmeat sales came in at $187.7 million, declining 10.6% in dollars and 9.4% in pounds, according to Circana Integrated Fresh data. Similarly, deli service lunchmeat dollar sales fell 17.8% to $312.7 million and pounds fell 14.5%.

"We are already starting to see a definite decrease in demand for service lunch meat, ... grab-and-go was starting to wane over last year's totals, and then, of course, the recall brought the entire category down with service down the most. ... Service continues to be where people are backing away," Parker elaborated.

Consumers still prefer purchasing deli meat through pre-sliced and service options, but deli grab-and-go has grown in recent years, Parker explained. More than a quarter (29%) of consumers purchase deli pre-sliced meats and cheese and a similar 28% bought deli service lunchmeat, according to a Circana Integrated Fresh panel for the 52 weeks, ending Sept. 9. Additionally, 18% of consumers primarily went with grab-and-go options.

However, deli pre-sliced lunchmeat bucked the trend of aisle-deli meats and grew 4.9% to $123.8 million in sales and 8.7% in pounds. Additionally, the overall deli department sales inched upwards 1.4% to $4.2 billion, and 1.6% in units.

‘Deli is becoming the destination for the trip’

Despite the outbreak, the deli department is increasingly important to consumers as a destination for planning meals, which is taking away trips from other departments, Parker explained.

“What we have seen is when that deli meat gets in the basket, we are not necessarily seeing people also go to the meat department. They are buying the protein that they need for tonight's dinner or maybe tomorrow's dinner, so it is taking them out of the trip to the meat department, and it is really disrupting flow,” Parker said.

She added, “We have to realize that sometimes a consumer wants [meat] hot, sometimes they want it cooked in a deli adjacent. By the way, more than a quarter of the times that people buy prepared meat from the deli, they are also buying the side from the deli. So, overarchingly, deli is becoming the destination for the trip. People are fulfilling all their needs and then leaving. [This is] great for delis, not always great for the rest of the store.”

Move over sushi, Middle Eastern flavors spice up the deli department

Consumer demand for globally inspired flavors is driving demand for prepared entrees, Parker shared. Demand for deli-prepared sushi grew in recent years, leading the way for other global flavors, she added.  

Entrees remain a bright spot in the deli category with sales of $8.4 billion for the 52 weeks ending Sept. 29, growing 4.6% in dollars and 3.8% in units, according to Circana Integrated Fresh data.

“One of the most interesting things about entrees is some retailers ... are doing well with Mediterranean and especially Indian and Middle Eastern flavors in their deli-prepared entrees. A lot of times they are doing those with a third party, a brand that is very relevant ethnically to that cuisine. But just like sushi, Americans might be intimidated to make a curry or a tikka masala,” Parker elaborated.