SPRINGFIELD, Mo. -- The hubbub over home-meal replacement has supermarket deli executives -- and their bosses in upper management -- scrambling to revamp their in-store food services, wedge in new concepts and practices and generally think more like restaurant operators.
But Kenny Cox, marketing manager, retail and deli, for prepared-foods manufacturer Hudson Foods here, is hoping cooler heads prevail.
"Home-meal replacement is not new," said Cox in an interview with SN. "How long has rotisserie chicken been around?"
Long enough, apparently, for it to be virtually a staple in new and remodeled delis across the country. But as Cox sees it, the industry right now needs rotisseries less than it needs, say, meal offerings based on a roasted chicken entree.
In other words, deli department strategists need to make their scrambling serve actual consumers -- and not their own companies' fervor to do something about HMR.
Cox told SN that a serious consumer focus is a twist in prepared-foods strategy that he's seen emerge only recently. And he expects it will drive the market in the months and years to come.
"Consumers are saying to retailers, 'We want solutions to meals,' and smart retailers are listening to the marketplace and responding," he said.
"Home-meal replacement is a format that will work for supermarkets, if supermarket operators do not simply rely on duplicating the efforts made by food-service operators such as Boston Market or Kenny Rogers."
The promise of HMR done well is a lucrative future for the in-store deli business, he said. To make it happen, retailers will have to merchandise with an eye toward theater, pour the labor in to support it and make sure their program is aimed correctly at the consumer.
"Delis have to step up and put their best foot forward and they have to put up the dollars for labor," he said. "Labor has to be shifted to have staff in the store when the customers are there. Remember that the prime selling time is not 9 a.m., it is 4 p.m. to 6 p.m. That dinner rush is not the time for two junior employees to be manning the deli."
He said delis have to be willing to ask a "fair" price for their food, and bundle items together into meal solutions. A $3.99 deli chicken could and should be a $4.99 home meal that includes a half-chicken, a roll and a salad.
"At a fast-food chain, a bucket of chicken is $11.99. At the supermarket, that same bucket sells for $3.99. These price points destroy the perceived value of the chicken."
The potential of deli food service rides on the fact that supermarkets have impressive consumer traffic, Cox noted. "On average, a consumer is in the supermarket over two times per week. Retailers must take advantage of that consumer base before it erodes away."
But the potential often lies untouched. "Only one out of five supermarket shoppers shop in the deli. That's terrible, particularly in light of the fact that nine out of 10 deli shoppers say that the quality of deli food is better than fast food. There is a need to do better."
And vendors should be expected to provide solutions, not just product, Cox said. "They must give supermarket operators solutions to what do and how to sell products. Vendors need to research and understand how a product will be sold."
Even with the prospect of vendor help, home-meal replacement will not cure all deli food-service ills, Cox cautioned.
"Some retailers should not and will not get into home-meal replacement because they are in markets where it will not work for them," he said. "There are some markets where a Boston Market doesn't do well. In some markets rotisserie chicken works great, but the other parts of meals -- the side dishes and accompaniments, the vegetables -- are done by mom."
Given a future where the consumers are kept in mind and programs are introduced only where they make sense, home-meal replacement will surely pay off, Cox predicted.
"Meal solutions is where the growth of the supermarket deli is headed. Retailers who focus their merchandising efforts on complete meals, and make it easier for consumers to shop for that meal, will capture dollars. Consumers who won't have to wander the store to find their meals will be happy and reward retailers with return business."
In the interest of making the department easy to shop, he advised a firm grip on the variety of products on the menu. "The worst thing is a 75-foot deli case with 10 kinds of potato salad. Choices should be limited, and vary day by day."
Some retailers, he added, are doing a good job of straddling traditional deli and supermarket food-service approaches to the market.
But the failure of early food court concepts in supermarkets points out what can happen to grocers who lose their focus and go head over heals into food service, he cautioned.
"When margins suffer you have gone too far. When you have diminishing returns you have gone too far. It is a difficult thing to duplicate a restaurant in a store environment.
"You don't have to go too far into food service to have that focus and reap the success," said Cox.
"Those supermarkets that are winning the battle are not going totally into food-service, but rather taking calculated advances."
