Consumers still order easy delivery of groceries

Consumers still order easy delivery of groceries



Have you heard the one about the milkman who never quite disappeared?

It's true. The milkman ­-- that retro, even anachronistic, fixture of lame jokes and old movies -- is still around, although his job description today extends beyond milk and dairy products.



And even in a shaky economy that's prompting some consumers to pare back or eliminate their delivery purchases, others remain loyal to home-delivered grocery companies.

Maggie Godwin of Las Vegas visits the supermarket, but supplements her store-bought groceries with deliveries of family favorites from Schwan's.

"There are certain items my family orders every order," says Godwin, who has been a Schwan's customer for about 10 years.

Ice cream -- Schwan's signature product -- and particularly in the summer. Bagel dogs -- "My husband and my son eat those like crazy," she says -- pizzas and baguettes, frozen and ready to pop into the oven, are other favorites. Godwin, herself, is a fan of Schwan's line of microwave-ready, healthy vegetables.

Utah-based Winder Farms has been delivering milk, dairy products, organic produce and meats, all-natural frozen dinner entrees and other grocery items to Southern Nevada households since August 2006. The company has about 7,000 customers here, served by a delivery corps that heads out at about midnight to make their rounds, according to Sean McCrady, assistant general manager for Winder Farms Las Vegas.

By 8 a.m., customers need merely to walk outside to find their food selections waiting for them in an insulated cooler.

Meanwhile, Las Vegas-based Prime Foods Inc. since 1982 has been delivering meats, prepared foods, quick-serve dinners and almost everything that can be found in a supermarket.

In addition, delivery trucks for Minnesota-based Schwan's drop off an array of grocery items that includes its own private label pizzas and prepared foods. Bob Corscadden, Schwan's chief marketing officer, says many people become Schwan's customers only after "they see a truck and ask a neighbor."

Home delivery customers often use these services either to augment their trips to the supermarket or nearly replace them.

At Prime Foods, for example, customers figure out how much they spend on groceries during a typical month, then sign up for a plan based on that figure. Prime Foods will deliver to the customer meats -- the company even supplies a home freezer -- packaged goods, toiletries and other items, leaving the customer to purchase only perishables at the store.

Of course, with either model, consumers are likely to pay a delivery charge, and the prices they pay for individual items may well be higher than they'd pay at a supermarket or big box retailer.

Winder Farms customers, for example, would pay a delivery charge of $12.99 per month on top of the cost of the items they purchase each week. Among Winder Farms' current prices: A half-gallon of whole milk in a glass bottle, $3.49; three pounds of organic Gala apples, $5.99; a 1.5-pound package of applewood-smoked bacon, $8.49; six blueberry bagels, $4.99; a 20-ounce loaf of white bread, $3.19; a 1.5-pound package of tomatoes on the vine, $6.99; and a dozen cage-free brown eggs, $3.69.

So why opt for home delivery? Convenience is the obvious reason.

Home delivery companies also can supply consumers with custom items. For example, Nick Sokolowski, director of operations for Prime Foods, says the company's on-site meat-cutting facility can cut meats to order and then package them in whatever size a customer prefers. Then, when a delivery is made, the delivery person will place the meat in the freezer and even rotate stock in the customer's freezer and cupboards.

A customer may opt for home delivery to obtain products that aren't available elsewhere. Corscadden notes that Schwan's first product was ice cream, delivered regionally near its Minnesota headquarters. Today, however, Schwan's offers a complete line of products that includes its own private-label prepared dinners, side dishes and appetizers and even pizzas baked in its own Kansas pizza plant.

Sometimes, a home delivery customer may simply prefer the quality of a home-delivered product to an analogous supermarket product. McCrady, for example, says enjoying "dairy-fresh milk" is key for Winder Farms' customers.

"Our milk is delivered to their front door around 36 hours" from the farm, he says. "We don't inject cows with artificial growth hormones to make them lactate or produce milk, and we process it in a slower, gentler process, and we cold-separate our milk."

And, unlike in a supermarket, Winder can control the supply chain from farm to customer's refrigerator, McCrady says.

In what may be the most counterintuitive reason of all, some customers find that having groceries delivered to their home saves money.

Who's the typical home delivery customer? "I'm sure you expect me to say the affluent and the wealthy," says Angeline Close, an assistant marketing professor at the University of Nevada, Las Vegas.

But, Close says, by forcing consumers to create and then stick to a predetermined shopping list and by eliminating impulse purchases at the store, home delivery actually can save consumers money. There also is a savings on gasoline and car wear and tear, she adds.

However, actually realizing that cost savings does require the consumer to be organized. Close recommends that consumers crunch the numbers by tracking what their family buys and then comparing that to the costs of a delivery service. She also recommends that shoppers take advantage of such enticements as no-obligation trial periods and specials.

According to Close, customers of home delivery food services also include those living in cities such as New York City where having, or keeping, a car is difficult; those with active lifestyles and busy schedules who appreciate the convenience of not having to shop; and people with "limited access to driving -- for example, someone who might be handicapped, someone who might not have a driver's license, and maybe the elderly who are not physically able to carry heavy groceries and load them into the car."

One local supermarket chain, Vons, offers home delivery for a fee ranging from $6.95 to $12.95. Orders are made online and delivered to 73 valley ZIP codes.

Albertsons did offer home delivery here from 2002 to 2009, according to Lilia Rodriguez, the company's public affairs manager. But, customer polling revealed consumers appreciated someone doing the shopping for them more than the home delivery, she says. Now the chain offers a shopping service and customers pick up the items at the store.

Lately, the additional costs associated with home food delivery have made some recession-strapped consumers think twice. Sokolowski estimates that his workforce has dropped from 58 to 18 during the past few years, and that Prime Foods' customer rolls are down to about 1,000, versus about 6,000 during its heyday.

The reasons include high unemployment, families moving from homes into apartments, and foreclosures, he says. "If you don't have a home, you don't need a freezer full of food."

Corscadden says that, at Schwan's, "what we have been seeing is people buying fewer items."

But, Corscadden continues, "we're out every day bringing on new customers. So we still have a very strong business model, and I'm thankful we're not in the position a lot of other folks are in terms of the economy."

And, at Winder Farms, McCrady says, "what you always get is, they wanted to cancel with you, but they went back to the store and started buying milk again at the store, and (their) kids couldn't drink it. People say they will cut back to just the milk."

Schwan's customer Godwin says her family probably has "cut back a little. But it's cutting back across the board, not just specifically my home-delivered food."

"I can't ever see giving up the grocery store," she adds, but "it's nice when you can have these certain items (delivered)."

Contact reporter John Przybys at jprzybys@review journal.com or 702-383-0280.