A recipe for the next century - supermarkets - includes related articles supermarkets and restaurant operator Home Run Inn

Prepared Foods, Nov, 1996 by Steve Dwyer

Long accustomed to a shelf-stable and perishable existence, supermarkets are switching gears and marketing comprehensive meals-to-go with side dishes. They're doing it through alliances with food companies.

As Mom's homemade meat loaf and Grandma's goulash go the way of the Edsel and Hula-Hoop, food processors and supermarkets are cooking up a plan to replace the real deal. They're partnering on a prepared meals-to-go concept at the supermarket level - aimed squarely at time-starved consumers unwilling to cook.

Known in the trade as Home Meal Replacement (HMR), supermarket meals-to-go are projected to claim 50% of the total food dollar by 2001 and blossom into a $410 billion business by 2002, according to industry data.

Home meals cooked from scratch are decreasing as U.S. consumers, citing negative attitudes toward cooking, time constraints and other lifestyle factors, now devote an average of 18 minutes to prepare a meal. This statistic belies the fact that while most consumers don't relish cooking, they do enjoy dining at home. Last year, when consumers replaced a meal from the home, 23% bought a meal to go from a supermarket to consume at home.

Supermarket chains and food companies have more than just a passing interest in this new meals concept. Besides recognizing a marketing opportunity, supermarkets need to get back to fiscal stability. The industry has seen dollar sales average a meager 1.5% growth since 1988. They've lost business to the commercial restaurant/foodservice industry, which last year chalked up sales of $222.5 billion. A food company/supermarket axis for meal solutions is attempting to wrest a portion of the "share of stomach" away from restaurants.

"The objective of this meal solution is to help grocery retailers retain dollars that may otherwise be spent at restaurants," says Jay Shapiro, vice president of sales development and special project management for Emmpak Foods Inc., Milwaukee, Wis., which in September unveiled an ambitious HMR program with several supermarket chains.

REFRIGERATED RENAISSANCE

Some supermarkets have invested in meal solution programs alone, but most have opted to partner with food companies in some manner.

"If your core competency is not in logistics or in doing fresh product well, outsourcing is essential," said Burt Flickinger, director of Management Horizons consulting firm, who spoke at the Food Marketing Institute's (FMI) MealSolutions '96 held September in Phoenix. "A supermarket could easily lose $50,000 to $100,000 a store under a self-managed operation."

"A grocer used to think he was involved in home meal replacement if he offered his customers rotisserie chicken," says Shapiro. "That was a delusion."

As part of the alliance with food companies, supermarkets now offer fresh, pre-packaged meals selected and bundled by the customer - typically requiring home preparation time of about 15 minutes.

Tom Finn, sales director for Celentano Inc., a Verona, N.J., food company specializing in Italian meals, said partnering can't happen by chance. "The two parties must have common cultures," Finn said, speaking at MealSolutions.

In early October, Celentano launched a meals program called "Take Home Fresh Cookin" with Genuardi's Family Market, a 26-store supermarket chain in the Philadelphia area. Celentano developed a fresh food division to oversee the effort.

Pre-packaged, refrigerated carry out meals and side dishes at Genuardi's consist mainly of Celentano recipes, although a few are Genuardi's own and are prepared in-store. Restaurant-style entrees, including meat loaf, pork tenderloin, boneless ham, ribs, egg plant parmesan, stuffed shells and Tuscany stew, are prepared at a central kitchen, individually packaged and delivered to Genuardi's stores. The distribution cycle is every three to four days and the product's shelf life is 14 days, says Nora Bertucci, an official with Celentano. A single-serving meal consisting of an entree and two side dishes costs the customer about $3.99.

Ray Taglialatela, director perishable merchandise for Genuardi's, speaking at the FMI program, said, "The key is to think 'culinary.' When we established the program, we became food handlers, so it was essential to know something about the foodservice business," said Taglialatela.

Taglialatela, who hired chefs and other foodservice experts to add credence to the program, said that while adding outsiders was essential for his program, it may not be a mandatory prerogative for foodservice experts as temporary consultants may suffice.

Genuardi's demands full-time foodservice experts because its meals solutions program also features in-store food courts, in which Celentano also serves as a partner and where on-site food preparation is a must. These food counters include a pizza shop; a sandwich bar and grill that sells such eastern Pennsylvania favorites as Hogies and Philly cheese steaks; and a sushi bar. Soon to be added to the mix will be a pasta bar.

All told, Taglialatela said that the relationship with Celentano on home meal replacement has helped Genuardi's break down the barriers that once existed with suppliers. "It used to be adversarial between retailers and suppliers, but now we have learned to care and cheer for one another," said Taglialatela.