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MORE HMR PROGRESS NEEDED: FMI VP

CHICAGO -- Supermarkets are making progress within the realm of home-meal replacement, but just like tonight's dinner, it's not come together yet.Three years after HMR found its place in the industry's acronym bank, supermarkets continue to struggle with executing the concept effectively, said Michael Sansolo, senior vice president of the Food Marketing Institute, Washington. The urgency to overcome

CHICAGO -- Supermarkets are making progress within the realm of home-meal replacement, but just like tonight's dinner, it's not come together yet.

Three years after HMR found its place in the industry's acronym bank, supermarkets continue to struggle with executing the concept effectively, said Michael Sansolo, senior vice president of the Food Marketing Institute, Washington. The urgency to overcome past obstacles has never been greater, however, as new research points to today's biggest profit opportunity, or potential oversight: the younger consumer.

"If you need to get alarmed about something, consider this: When we surveyed younger shoppers -- 18- to 24-year-olds -- three out of 10, or 31%, said they are eating their main meal out three days or more each week," he said. "These are the shoppers that we need to win over for the future."

Sansolo discussed how the evolution of consumers' lifestyles is pressuring retailers to deliver better meal solutions during Speaks '99: State of the Food Marketing Industry at the FMI's annual convention here last week.

"In 1999, mealtime is extremely different," he said. "A lot of consumers are telling us these days, 'Don't give me products; give me solutions.' "

The good news, he said, is that progress is being made in home-meal replacement and the gap between fast food and supermarkets' share of food dollars is beginning to close.

"It's a tough area but we are doing it," Sansolo said. "Our numbers over the past few years have shown that consumers are equally likely to use the supermarket for meals away from the home as they are to use restaurants."

The number of supermarkets offering prepared foods has dropped slightly, he noted, "but this does not mean the end of meal solutions. It means a rethinking. Prepared foods are one of the hardest directions to take."

Nearly 84% of companies offered prepared foods in 1998, which is down from the 93% that offered prepared foods in 1997, according to FMI research.

The industry is beginning to learn that successful meal solutions are not a one-size-fits-all proposition. Where a "case-ready" approach may work in one market, a "from-scratch" approach may work best in another. The key is determining what works where and supermarkets have endured some bumps and bruises along the way of figuring that out.

When the FMI hosted its first meal solutions conference in 1996, "the environment was something of a 'Wow! What potential! How can we do this?' The next year," Sansolo said, "things changed. It was more of an 'ow!' because we found out it wasn't that easy. You can't, overnight, put McDonald's out of business.

"Then in 1998, the question that was asked was, 'how?' and this is a significant one for us to consider," he said.

The "how" of successful home-meal replacement strategies will vary company to company and market to market but two specific tactics, "assembly" and "total-store solutions," are emerging as hot prospects, Sansolo said.

The "assembly" approach makes dinnertime easier to pull together. "Consumers today are very likely to do things like pick up a bagged salad, pick up the meat that's precut and marinated. If they put the meal together, they consider it cooking," he said.

Yet more promising is "total store solutions," which years ago was called cross merchandising. "This is the one people get real excited about. You bring items together that the shopper uses together, so when they come to your store it's an easier shopping trip. I need spaghetti and spaghetti sauce. It's together. Maybe put the cheese beside the meat. It's together. It's a solution. We can do this by being creative.

"It is a way of taking assets in our stores and maximizing them," he added.

Taking the idea a step further leads to "whole health solutions," which Sansolo said is quickly gaining a foothold in the supermarket industry.

The whole health solutions concept involves various aspects of the store -- from pharmacy to produce to health and beauty care -- and ties them together to help shoppers live a healthier lifestyle, he explained.