Many industry executives are gathered this week in Boca Raton, Fla., for the 1996 edition of the Food Marketing Institute's Midwinter Executive Conference, and among the topics of conversation likely to come up more than once during the meeting is the emerging issue of the home meal replacement business. The whole concept of HMR was far from the top of the industry's agenda at the time of last year's Midwinter confab, but now it has become very well-known -- even by its acronym -- and it has all the potential to become far more widespread.
Indeed, in a pre-Midwinter interview with SN, Tim Hammonds, FMI's president and chief executive officer, identified HMR as virtually the most important change mobilizer the industry will see during the next five years or so. A news article based on the interview is on Page 12.
According to Tim, the only other issue now on the horizon that could muster enough force to equal the potential of the HMR phenomenon to drive significant change in upcoming years is the explosion of rapidly improving and increasingly inexpensive technology.
But, as for HMR, what exactly is it and how could industry seers think it has gathered such importance in so short a time? And, for that matter, does it deserve the importance now being heaped on it? HMR is the type of business being carried out so successfully by meal purveyors such as Boston Market, Kenny Rogers and others. Their strategy is to offer a simple, limited selection of prepared meals together with a nice choice of side dishes, then package the resulting full meal in an easy-to-carry bag with throwaway utensils included. The meals are actually intended for at-home, although the HMR outlets offer seating too. It's probably true that at most HMR outlets, a good majority of customers exercise the takeaway option. In effect, then, these HMR retailers become a place where harried and time-pressed consumers can pop in and quickly emerge with a quick, easy and cheap alternative to home-meal preparation.
The success these meal outlets are enjoying clearly identifies them as a growing threat to supermarkets.
What is their secret of success? Tim, and other observers, have correctly identified what is, and what is not, driving their success. Strong elements of their strategy, of course, include perception of quality and value, but the real key to the whole thing is consistency. Consistency is king of the HMR business because it's what drives repeat business. People know the meal experience of tomorrow will be about what it was six months ago. And they know it will be about the same whether they go to a branded HMR outlet in Colorado, Florida or California. As Tim described it, "When HMR consumers say they want 'quality,' they don't necessarily mean they are looking for the best product they've ever tasted. What they mean is they want to buy a product they know; they what to be confident that what they get will be of the same quality today, tomorrow and a month from now."
What of the consistency of prepared-food offerings in supermarkets? "In the supermarket industry, we have trouble delivering that consistency," Tim said. And he is right.
But that's good news, in a way. Here's why: The real truth is that HMR outlets don't deliver a complex product, or anything like gourmet dining. They deliver a product that is well within the parameters of what supermarkets can produce well. So, from the supermarket perspective, the HMR game can be played by supermarkets at the expense of little more than learning how to provide such products consistently -- consistently from location to location, and over time. That means the battle for the increasing number of dollars now going to HMR outlets is one that supermarkets can wage and win.
After all, supermarkets already have the traffic -- traffic composed of shoppers with the idea of buying food in their minds. Why not put that advantage to work by making the supermarket consumers' choice for HMR products, and other products too, by becoming the king of consistency?
