Growing meal-assembly store segment could eat into real restaurants' profits

Nation's Restaurant News, Feb 6, 2006 by Erica Duecy

If you haven't heard of meal-assembly stores, you probably will soon. They speak to a new generation of take-and-bake services, a stealth segment of competition that threatens to lure families from restaurants and back to the dinner table.

I was surprised to find there are several established brands. Snohomish, Wash.-based Dream Dinners has 100 outlets in 25 states. Fort Worth, Texas-based Super Suppers has nearly 100 units, with another 200 franchises sold. Mukilteo, Wash.-based Dinners Ready has 26 units open, with seven more scheduled to debut in early 2006. Grayslake, III.-based Dinner by Design has 28 units open in five states, and has sold an additional 55 franchises. Scores of smaller brands and independent businesses also are offering similar fix-and-freeze services for time-starved families around the country.

So what's the benefit? It's easy, with no prep or clean up, and appointments are available on weekends and evenings. It's quick--you can make 12 meals in two hours. It's healthy because chefs and nutritionists develop the recipes. It's cheap, with the cost per meal averaging less than $4 per serving. And it can be fun--some services encourage group reservations and offer wine and refreshments.

At Dinner By Design, customers make two-hour appointments and pre-select the entrees they'd like to make from a rotating menu. For a $199 fee, the customer assembles 12 entrees. Store employees do prep work like washing produce and chopping meats in advance. Customers just follow the recipes and rotate through various prep stations customizing and assembling their dishes. The food is then packed and labeled in disposable containers. Customers freeze or refrigerate the meals at home, then pop the dish in the oven about 30 minutes before they're ready to sit down for dinner.

Each entree serves four to six people, so servings cost about $3 to $4--less than most quick-service meals.

The average check at Dinner by Design is $256, which is higher than the regular fee, because customers also tend to purchase prepackaged meals made by the kitchen staff, said Julie Duffy, the company's president and founder. Store sales range from $750,000 to $1.2 million annually, she said.

The real question for restaurateurs is whether meal-assembly stores will have traction after the newness wears off. Dinner by Design is betting on it. The company recently rolled out an electronic gift card and rewards card program to boost repeat traffic.

Convenience and food quality will drive repeat business, Duffy said. "If the food ain't good, they ain't coming back," she said. "It's a cost-effective way to provide homemade meals without the hassle. I think you'll see this isn't a fad. It's a trend."

eduecy@nrn.com