A lot of supermarket operators are rushing to pull together food-service style programs aimed at the fresh-meals market.
But from the perspective of the suppliers and distributors who'd like to deliver the products -- ingredients and programs that those retailers are hungering for -- it is proving to be a complicated and sometimes frustrating process.
Just ask them, and food-service providers will tell you that the path to supermarket distribution is not simple.
"I find that as a distributor focusing in the area of meal solutions, we do a tremendous amount of hand-holding with the retailer," said Rob Bildner, president of RLB Food Distributors, West Caldwell, N.J., who incidentally has the advantage of already established distribution channels into other supermarket fresh departments such as produce and deli.
In the brave new world of fresh meals and supermarket food service, the companies involved in manufacturing, sourcing and distributing the products are discovering they must not only make new products for a new market, but also they must re-create their own business structures and procedures at almost every step.
Such hurdles are holding real progress to a slow pace, especially relative to the urgency many retailers express when it comes to wanting to get into the meals market.
It's not just hot food that offers a challenge for distribution. From the perspective of distributors, refrigerated meals programs present as many problems as hot-meal programs, since shelf life is such a treacherous issue.
Notwithstanding the normal logistical challenges of moving fresh processed product or ingredients, even manufacturers and distributors doing their best to make cooperative ventures with supermarkets work are finding it a struggle, often because of obstacles set deeply into the retail culture and into their own corporate cultures, such as internal competition that rivals interdepartmental conflicts in supermarket organizations.
"One of the problems is the lack of collaboration, on the manufacturer's side among the different selling groups, as well as on the retail side in the different departments," said Robin Jensen, vice president of food service for Tyson Foods, Springdale, Ark.
"On their end, it makes it difficult for us to go in to a store and present a solution to the right guy," Jensen said. "But on our end, too, we still have different people calling on those stores.
"The retail guys call on the fresh-meat buyer, while different salespeople call on the frozen and deli guys, and a lot of times our guys aren't talking to each other, either."
So while relationships between the supermarket side and the distribution/manufacturing sides are evolving, she said, the winners will be the companies that are quicker in first getting their own organizations to work together internally.
One of the main barriers distributors and manufacturers said they face is in-store competition.
"Trying to create home-meal replacement programs and have meal solutions for the consumer in the store is going to take collaboration across a lot of departments," said Jensen of Tyson.
"It may not make sense in all cases to put all the products in the deli case, or all in the fresh-meat case. It seems to me if the produce guy, the meat guy and the deli guy can get together and figure out the best solution for each store, the manufacturer can figure out a way to collaborate and call on them to sort it out."
Tyson has been grappling with the issue for at least five years, since it launched a sales division that calls only on retailers' deli departments, but is also part of the Tyson corporate food-service group, according to Greg Lancelot, national sales manager for the deli division at Tyson.
"We felt the product mix was closer to traditional food service, yet we only call on the grocery retail deli," Lancelot said. In the division, a staff that includes a product developer will work with retailers on their needs.
But the problems in adapting food-service standards to supermarket settings are formidable, and include a prevailing mentality that does not suit the new set of challenges the meals business presents, he said.
"You hear a lot of folks in the industry comment that 'Mr. Fast-Food Player is our big competitor,' " Lancelot said, "but when you show retailers comparable products and give them menu ideas, the response is 'Hey, my gross margin isn't there.'
"But if you really want to compete head to head with the restaurants, you have to adopt the restaurant mentality. That's a big change for a lot of folks."
And it might be one reason traditional food-service suppliers and supermarkets are still working out how best to cooperate.
"The gatekeeper that handles the salesmen every day is hooked into gross margins and bonuses. You may show him some item the restaurants would jump all over, but if his 50% to 60% gross margin isn't there, he's turning his back on it because it's what his boss wants," Lancelot said. If things are to change, the directive must come from the top of the company, he said.
Retailers that develop a new business paradigm, that allows greater flexibility for buyers and latitude regarding gross margins, will find that manufacturers and distributors are anxious to work with them, the Tyson executive said.
They'd also better bring along a willingness not just to supply, but to counsel and teach as well, said RLB's Bildner.
"We're in the position of teaching the retailers how to handle these highly perishable meal-solution products," Bildner explained. "How to receive them, how to display them, how to manage them so they move quickly though the system."
Re-educating the retailer is becoming a big part of the distributor's job, he said, especially if the retailers will, in turn, be called upon to educate consumers about the new products, packaging and systems appearing in their stores.
And as RLB adds newer products, like refrigerated entrees with longer shelf lives than consumers are used to, the education factor will grow still bigger as a responsibility for distributors, he reasoned.
The burden of giving retailers detailed guidance through the process is falling as well, and not surprisingly, on the food brokerage community.
"Retailers are looking to both the manufacturers and food brokers for practical direction and advice -- not pie in the sky stuff," said Craig Horn, vice president of HSH Food Brokers, Jessup, Md.
Just as a small percentage of supermarkets have made themselves experts in meals programs, some food brokers are finding new niches. Typically, however, brokers are focusing at present on clients who do retail or food service business, but rarely both, Horn said. Having specialized in food service, for example, HSH's activity is still aimed only 30% at supermarkets, for all of the talk in the industry about meals programs.
The crossover of supermarket and food service is there. HSH has encouraged retailers to expand their salad bars to include desserts. It has also helped develop complete turkey dinner programs with North Carolina-based House of Rayford Farms.
And the brokerage has recently been part of a three-way collaboration with Giant Food, Landover, Md., and Pierce Foods, to develop a branded approach to supermarket food service through Pierce's chicken Wing Dings and Wing Zings traditional food-service programs.
"The goal was to brand Wing Dings and Wing Zings in the retail arena, by promoting them in the store by brand," Horn said.
"Branding is an advantage where everybody wins. The retailer is not stuck with the commodity-based pricing philosophy, the manufacturer is able to secure some consistency of demand, and the consumer gets some consistency of product, what we call destination quality," Horn added.
But that sort of three-sided collaboration is not common, particularly when a supplier's brand is part of the deal. "It's a tough sell, no question, because the retail mentality has generally been commodity-based, rather than brand-based," he said.
Horn also said retailers need help in recognizing the importance of service in "food service," and cannot easily roll out new programs chainwide without some fool-proof products.
Underlying the whole process is a nettlesome dilemma: Supermarkets will not command the attention of the major food-service suppliers and manufacturers, until the number of chains and stores seriously interested in meal programs goes beyond the small percentage of stores that now feature them or show a serious interest in them.
Those who do specialize in bringing food-service products to retailers must bring the same product expertise and advice that brokers do to restaurants, where in-store training, cooperative product development and customized product solutions are commonplace, a number of industry experts said.
"Food manufacturers [also] do this very well, going into restaurants and training servers, doing demos about new items, telling servers how to describe the item, what words to use," said Paul Schlossberg, president of D/FW Consulting, a Dallas-based food-service consultancy.
Some manufacturers are willing to go to great lengths to design new entrees for traditional food-service operators, and sometimes will extend their brand into an operation in an exclusive recipe agreement. They'll likely do the same under the right circumstances for supermarkets, Schlossberg explained.
Training for in-store meals personnel also can come from manufacturers, he said.
"Labor will have to be trained to take the industry forward," and supermarkets should look to product manufacturers for help in the same way restaurants do.
But it will mean some fundamental changes to the kinds of support supermarkets seek from their suppliers and how they use that support.
To sell more product, Schlossberg recommends that chains and independents consider teaming up with a major manufacturer to put samplers into stores, instead of adding promotional dollars to the bottom line. And supermarkets will have to focus on incremental sales volume, rather than total dollars collected.
Lancelot of Tyson echoed what most distributors and manufacturers said was the model for the future for both supermarket meals and the distribution channel that gets them there.
"For customers who want to have a partnership with their vendors, we're certainly able to help roll out items to their systems," he said.
"But what we've found is that there's no 'one size fits all' when you're talking about meal solutions. You really have to be flexible for each customer. A given chain with stores in different demographic areas has different requirements that become more pointed when you start talking about meal solutions."