2021 Holiday Entertaining Guide
Grocers are heading into a holiday season filled with ongoing uncertainty on many fronts. As the events of the past two years have shown, one of the only constants in the current marketplace is the need to adapt to changing circumstances.
From the rise of new variants in the ongoing COVID-19 pandemic, to concerns about higher food costs, to pervasive labor shortages and ongoing supply challenges, several simultaneous issues are facing food retailers that need to create programs tied to the holiday season. Some retail experts are projecting an earlier-than-usual start to the holidays, which places an even greater emphasis on timely planning.
Forging through these challenges requires a balance of pragmatism and innovative thinking, as well as close collaboration with partners such as CPGs, distributors and others whose successful holiday seasons are linked with grocers’ efforts. Together, grocers and their various partners can ascertain and respond to what consumers will be looking for as they gear up for the holiday season.
As of late summer, it’s looking like a veritable grab-bag of options, all of which can be addressed with some well-laid plans – and contingency strategies. Notes Melanie Zanoza Bartelme, global food analyst for Chicago-based research firm Mintel: “It really feels like that will be the critical approach throughout – be prepared to pivot.”
To Grandmother’s House We Go?
Following a decidedly low-key 2020, when consumers in many parts of the country were under travel restrictions and sticking close to home amid a COVID-19 surge, it was expected that 2021 would be marked by large-scale celebrations, in both size and scale.
Given difficulties in totally quashing the coronavirus and the range in consumers’ personal comfort levels, it may wind up being a holiday season that’s somewhere between a bust and a blowout.
Early research affirms that possibility. “While consumers are eager about the upcoming holiday celebrations, 49% of consumers are still anticipating that COVID-19 will impact their plans in some way,” notes Sarah Hughes, senior product marketing manager at Winston-Salem, N.C.-based Inmar Intelligence, which conducted a holiday consumer survey in June 2021.
What Item Do You Bring When You’re the Guest of a Gathering?
- 75% bring a dessert or sweet treat
- 63% bring a snack, starter or appetizer
- 60% bring alcoholic beverages
- Only 28% just bring themselves
(Source: Inmar Intelligence)
“It’s still very fluid,” agrees Dave Anderko, supervisor, consumer insights and innovation at Hormel Foods, in Austin, Minn. “Some consumers are likely to go back to the big holiday parties and meals, as they’ve missed them. Others will continue with smaller gatherings that are less stressful [and] easier to manage, and keep gatherings more intimate with their family and friends. Some may continue to have very small gatherings and be cautious.”
Bartelme envisions a similar splintering of occasions. “I can see things getting broken out,” she says. “Out of caution, even if you’re vaxxed, you might not want to risk having a celebration with an older family member, but you may feel comfortable with a Friendsgiving.”
Even if they aren’t seeing everyone this holiday season at big parties, people definitely want to connect in person. “We do see interest overall from consumers who want to spend more time with friends and family, and some people will be looking to the holidays as a reason to get together,” Bartelme predicts. According to Mintel’s latest research, 69% of U.S. consumers won’t miss a chance to celebrate with others, and, underscoring the power of sentiment, the same percentage say that they now realize the importance of holiday celebrations.
Rick Stein, VP of fresh foods for Arlington, Va.-based FMI – the Food Industry Association, agrees. “I think consumers will want to gather, they will want to travel more than they did last year, and they will want to celebrate the fact that they are gathering,” he asserts.
As for gatherings, there probably will be more of them, kicking off right after Halloween and running through the New Year, with people ready to look ahead to a brighter 2022. “Don’t just immediately think about the 25th of December and Thanksgiving – there will be things like Friendsgiving, neighborhood-giving and even just gifting for the holidays with food,” says Jonna Parker, principal at IRI’s Fresh Center of Excellence, in Chicago. “I don’t think we’ve capitalized on mini-occasions to make fresh food turnkey.”
The upshot for grocers in this fluid environment is to offer a mix of products and portions that cater to different levels and kinds of celebrations. Some shoppers will want the biggest turkey and an extra-large bag of potatoes, while others will stick to everyday sizes. In addition to providing options for a range of occasions, retailers should let their customers know that they have multiple solutions based on their unique needs, an approach that aligns with shoppers’ growing desire for personalization and customization.
Sally Lyons Wyatt, EVP and practice leader, client services for IRI, offers some advice: “Occasion-based assortment, with occasion-based messaging. Make it easier on your shoppers – make them want to come into the store and engage, and find those same options online.”
Making it easy for consumers is a goal that cuts across all types of festivities, agrees Stein. “I go back to the macro-trend of convenience – you need to have items and programs prepared for that type of customer and that type of convenience they are looking for,” he notes.
Homemade for the Holidays – Sort of
Providing more (and convenient) options extends to the mix of ready-to-cook and -use offerings that will be in demand.
Coming out of the pandemic, shoppers have different cooking habits and preferences. On the one hand, people have had plenty of time to bone up on their cooking skills. On the other, shoppers like a little help in the kitchen when they can get it, and for different reasons.
According to Mintel, 60% of consumers say that they’ve been cooking from scratch more often during the pandemic. Bartelme points out, however, that “cooking” isn’t the same for everyone. “One thing I always say is that ‘from scratch’ means so many different things depending on how you look,” she explains. “Assembling a bunch of foods is one definition for people.”
Here, too, it’s about meeting consumers in the middle, with a combination of ingredients for from-scratch and almost-from-scratch meal prep, and shortcuts that allow people to take ownership of a meal without too much hassle. While retailers have long offered a range of supplies and prepared/semi-prepared items for the holidays, making these solutions readily available and highly visible in 2021 will be crucial.
Beware Grinch-like Economic Factors
If further virus-related restrictions – self-restrictions or otherwise – put any kind of damper on the holidays, rising food costs may also preclude this from being a Roaring ’20s kind of extended event.
Inflation, of course, has been rearing its head across many sectors. Food shortages, tied to the labor crunch and sourcing problems, are a twin concern.
In this environment, retailers will find themselves having to meet the needs of some pandemic- weary consumers who want to splurge for their holiday celebrations, along with price-conscious shoppers weighing their purchases more carefully. Of course, this occurs against a backdrop of grocers’ own labor situations and bottom-line mindfulness.
“I think we will see meal budgets grow this year, because more people will be gathering, but the increase likely won't be astronomical,” forecasts Hughes, of Inmar. “Consumers will likely [hold] potluck holiday gatherings to reduce the financial impact on the host – expect party attendees to bring their own booze or provide desserts and appetizers to ease the stress of the holiday host.”
Still, despite the once-again unusual circumstances in which they’re operating a business, retailers are in a better position than some competitors for the proverbial share of stomach. “Prices are increasing 400% to 500% on food away from home,” points out grocery industry observer Burt Flickinger, managing director of New York-based Strategic Resource Group.
With potential shortages and higher prices looming, Flickinger suggests that retailers emphasize their private label selections and larger portion sizes for stock-ups as the costs of feeding families, even at quick-service restaurants, continue to climb. “Retail is the last major area where people can save meaningful money,” he observes.
Grocers can address consumers’ economic concerns in many ways, offering solutions that meet their budgets as well as their party plans and palates. In addition to spotlighting sale prices, retailers can get creative with assortments and promotions.
“I think there is an opportunity like we saw in 2008 during the Great Recession to take products that consumers think are important and right-size them,” says Bartelme. “It’s about, ‘You want to have this at your holiday table, but maybe you just have a bit of it instead of the whole thing.’ “People want to be able to have that indulgence and the premium experience of it without feeling that they have to make that compromise.”
Perimeter Favorites
As grocers plan for what’s shaping up to be another unusual holiday season – at least in comparison to 2018 or 2019 – they’re focusing on all areas of their stores, including brick-and- mortar and e-commerce operations.
For instance, with consumers seeking convenience and fresh gourmet products during the runup to the holidays, the perimeter will be paramount.
Grocers can tout their prepared foods as a solution for shoppers who either want to cut corners or have complete take-home meals made for them. “All of these prepared options, like gravy or side dishes, take away some of the pressure,” notes Bartelme. “In a way, I think the prepared component could be more useful and impactful this year than last year, because it allows consumers to concentrate on the parts of the meal that someone else can take on for them.”
To Bartelme’s point, having an array of prepared foods puts the retailer in a key role as a solution provider. A refrigerated case of grab-and-go staples like containers of gravy, mashed potatoes, cranberries or gelatin salad can be appealing to in-person shoppers and at-home browsers. At the same time, a prepared food area or deli can offer fully prepared meals for two, four, six or more people for order and pickup. Depending on its digital infrastructure, a grocer can set up delivery of complete holiday meals with heat-and-eat and ready-to-eat items.
Such capabilities are a true point of differentiation, according to Jenna Irish, marketing manager for e-commerce company Rosie, in Ithaca, N.Y. “We saw a lot of restaurants bundling meals last year, and grocers can compete with that, with meal solutions,” says Irish. “If I am going to a local grocer, and they are able to do a nice Thanksgiving turkey and sides, I’m totally open to buying that.” Rosie recently developed a merchandising solution called Cater that enables shoppers to order meals online; the app also provides participating retailers with ample lead time for preparation and generates production data reports.
Cheese, Bakery, Charcuterie
In addition to prepared food solutions, grocers can promote the bakery section as a destination for making spirits bright in a less time-consuming way. In-store bakeries have long been go-to spots for things like pumpkin pie, holiday pastries and cakes, and breads.
Offering baked goods in bundles for in-store pickup or buy online, pickup in store (BOPIS) is an option that can appeal to convenience-oriented holiday shoppers. Adding new or interesting varieties of bakery items can pique shoppers’ attention, too, especially items that are indulgent yet simple to serve.
For example, Companion Baking, a St. Louis-based manufacturer of specialty breads and pastries, has expanded its line of bread puddings, including a new banana chocolate chip variety with honey that was created in collaboration with the National Honey Board. “Consumers also want interesting specialty products – we sell a lot of petite loaves and demi baguettes,” notes Companion Baking founder Josh Allen.
With labor stretched thin this year, in-store bakeries should be planning now to meet demand with the staff and products that they have. According to Allen, Companion Baking will be working to provide its grocery customers with the basics and other products that help them at a time when bakery operations are lean at best. “They are asking for more thaw-and-sell items and take-and-bake items – things that are really retail-ready,” he remarks.
Value Seekers
- 86% of consumers say that promotions, rebates and coupons are important when deciding what products to stock their pantries with in the fall.
(Source: Inmar Intelligence)
Specialty food cases are also likely to be an attraction as the holidays approach. If last year’s viral social media posts about charcuterie “houses” (akin to gingerbread houses) are any harbinger, charcuterie offerings are likely to ring up sales for holidays like Thanksgiving and Christmas. “Charcuterie is on trend and for those that want something more celebratory, while still versatile enough for casual or more formal gatherings,” observes Heather Vossler, director of consumer insights and innovation at Hormel, which produces the Columbus line of charcuterie products.
For both side dishes and entrées, the produce section is another time-tested destination during the holidays. Beyond classics like potatoes, green beans, celery, carrots and salad mixes, grocers can point shoppers to different varieties of vegetables and fruits. Social media platforms like Instagram and Facebook are particularly good avenues for spotlighting vibrant produce and sharing recipes and serving ideas.
Fresh Meat and Seafood
As the typical centerpiece of holiday meals, meat, poultry and seafood hold an important spot in retailers’ holiday plans.
Given simultaneous and seemingly colliding issues of higher protein costs and large gatherings, grocery stores may have to do a bit of a tightrope walk when planning for meat, poultry and seafood programs this holiday season. Buyers wanting custom cuts will appreciate being able to talk to and order from meat department staff, while other shoppers will pick up case-ready cuts in store or online. Likewise, some people will indulge in prime rib or crown roast of pork, while others may pull back from more expensive cuts.
According to Bartelme, protein may be a category in which shoppers will spend, even if prices are higher. “Things like meat and seafood and all of these premium sorts of things – people want to treat themselves to the main component of the meal, especially on a holiday,” she notes. “I can see people saying, ‘I’m not going to a restaurant anyway, so I will do it up.’”
While beef and pork are often served at holiday feasts, consumers have become pretty adept at cooking seafood since the pandemic began, and may opt for that kind of center-of-the-plate food. According to FMI’s latest “Power of Seafood” report, the seafood department saw a 28.4% jump in sales in 2020, outpacing growth in the produce, meat and deli sections.
Beer, Wine, Liquor and Mixers
For holiday presents and entertaining, adult beverages often bring shoppers into a store. As in past years, grocers that offer beer, wine, liquor and mixers can capitalize on the fact that they’re one-stop shops for those items and other holiday supplies.
Wine is big business during the holiday season, with sales typically hitting a peak between Thanksgiving and New Year’s. As shoppers continue to seek out locally made products and items that meet their interest in different or more intense flavors, craft beers represent a solid opportunity, especially among younger and often male shoppers, who have shown a penchant for craft brews.
2020 was a big year for batched cocktails, usually sold by restaurants that couldn’t offer inside dining. That trend is still going strong in 2021, and grocers can entice shoppers by highlighting ready-to-drink cocktails and mixers, including seasonal or limited-time products rolled out by brands.
Although seltzers and fizzy drinks garner the most attention during spring and summer, many shoppers have a taste for those kinds of products year-round. If not in summer-specific flavors, seltzers in varieties such as cranberry or black cherry can provide a light and refreshing counterpoint to the heavy meals frequently consumed during holidays. Last year, one of the popular advent calendars put out by the Aldi chain included 24 flavors of canned spiked seltzers.
Center Store Favorites
As consumers seek supplies for holiday fare, they’ll home in on the center store, both online and in person. This is where people will find flour for their new hobby of baking, or perhaps discover some interesting new ingredients for making meals, desserts or other dishes.
Accordingly, assortment and merchandising efforts can not only showcase the return of beloved items like canned pumpkin, cranberries, crispy fried onions, and basic supplies for cooking and baking, but also spotlight some products that provide a bump of flavor or color to a dish.
“For some people, it will be about tradition – the idea of what Grandma made – that gives a certain sense of comfort,” asserts Bartelme. “Depending on where we are and whether or not we are back hibernating in lockdown, there is also interest in breaking out of what we’ve been doing in the past. If we turned to traditional foods last year, this year, we may want to eat a chipotle- flavored turkey, or maybe not do turkey at all.”
The mantra of making it easier for shoppers applies here, too. For example, while Mintel’s research shows that nearly a third of U.S. consumers describe themselves as confident home bakers, they appreciate some assistance. In a recent survey, 67% of people who bake say that they’d be interested in kits that include all of the necessary ingredients.
With consumers continuing the snacking habits they started well before the pandemic, the center store can also be positioned as snacking central during a season typically defined by eating occasions and busy schedules. “We continue to see snacking as a growth area, especially in protein, or what we call ‘substantial snacking,’” observes Hormel’s Vossler, pointing to Planters nut products that work for both holiday snacks and casual gatherings.
What Really Matters ...
- 56% of U.S. consumers say that the pandemic has made them want to spend more time with family.
- 41% of U.S. consumers say that the pandemic has made them want to spend more time with friends.
(Source: Mintel, “COVID-19’s Impact on U.S. Consumers,” Summer 2021)
Floral, General Merchandise, Gift Cards
If the grocery store is about holiday food stock-ups, it can also be positioned as a destination for gifts.
As gift cards have become a present of choice for Christmas and other gift-giving holidays, retailers have increasingly put those items front and center. Last year, customers reported spending about 17% more on gift cards than they did in 2019, according to research from Austin, Texas-based InMarket. Another study, from Pleasanton, Calif.-based Blackhawk Network, showed that 52% of consumers were more likely to buy a gift card in 2020 than in other years.
Floral departments also ramp up during the holidays to provide shoppers with centerpieces, gifts for party hosts, and festive home décor. Grocers can add the floral section to the rotation of departments featured in social media content and other communications, both in and beyond the physical store. Here, too, floral teams can get creative, with offerings that include fresh-cut arrangements, seasonal plants like poinsettias and evergreens, and succulents. Depending on COVID-19 restrictions in the area, in-person classes on DIY centerpieces or plant gifts can be a draw for customers.
Make the List, Check it Twice
While they make plans for each department during their own version of holiday prep, grocers can keep in mind other macro-trends and capabilities that can affect the upcoming season.
Given the rise of plant-based eating, retailers can bring plant-based alternatives into the traditional assortment of holiday products. In some recipes, vegan alternatives can be used as substitutes for traditional animal-based products. Holiday hosts may also seek out plant-based options for their guests and family members who are following plant-based diets.
In the meantime, if time and labor allow, the holiday season can be a good time of the year to deploy and evaluate technologies such as workforce scheduling apps, AI-powered insights, or other platforms that help retailers connect with customers and streamline their in-store and e-commerce operations. A period of higher traffic and customer demand provides opportunities to determine the effectiveness of tools and technologies, which are only going to increase in implementation and use in the coming years.
