As supermarket retailers edge toward offering their customers meal solutions, the first question to be asked and answered is a very simple one: How can a fresh-meal program best be sourced, assembled in-store and offered to consumers?
That seemingly simple -- but quite vexing -- question is posed, and several answers are proposed, in this week's Supermarket News by means of a special report entitled "Fresh Meals Distribution Channel." The section was compiled and edited by Stephen Dowdell, SN's senior section editor. The section is featured on Page 1, and begins on Page 23.
As supermarket operators move toward offering finished meals, there are several ways to approach getting it done.
The solution that seems most evident is to source various meal ingredients from the store itself. Surprisingly, though, that course can be fraught with difficulty since at many companies each in-store department has profit-and-loss responsibilities so product must, in effect, be "sold" internally from one department to another, increasing the complexity of the whole thing.
Moreover, any plan that involves in-store preparation of recipe ingredients demands that someone in the store -- such as a professional chef -- must be capable of food preparation. That might not be too difficult a hurdle for an excellent one- or two-store operation to clear, but it is difficult to replicate meal quality and consistency across a great number of stores when in-store methods are used.
The various difficulties surrounding sourcing product from the store, and preparing it in the store, have driven some chains to look toward central preparation of meals in a commissary from which all stores in a chain, or in a major operating region, would be supplied. This is a suitable, although capital-intensive solution. A reduction in capital requirements can be gained by obtaining some prepared product directly from manufacturers and melding it into the meals being prepared from scratch. But the hybrid approach remains quite expensive and complex.
Chains that don't want to go down the costly central-preparation road can cast their gaze toward traditional food-service providers. In some ways, this would seem to be the best solution of all, since food retailers can obtain from food-service distributors the quality prepared product needed. Most likely, it can also be obtained on a direct-store-delivery basis, and in qualities needed. This method also provides a practical means for a few stores in a chain to test the meal-solutions waters before management decides what kind of commitment should be made. And these benefits can all be obtained without the need to invest in costly infrastructure.
But this outsourcing solution also comes with barriers to success fully in place. In this instance, some of the problem is that just as food retailers create vertical silos of activity -- the departments -- food-service distributors are verticalized according to class of trade. That means that food-service distributors, which may quite routinely supply attractive meal solutions to various institutional outlets, have no means to communicate that offer to supermarket retailers.
Finally, there are less obvious ways to solve the meal-solution puzzle, such as obtaining meals from local restaurants, which can be presented in the supermarket under the restaurant's own brand.
Take a look at this week's special report on the fresh meals distribution channel to find out how various retailers and manufacturers are working toward solving the meal-solutions puzzle.