CHICAGO -- For operators of independent supermarkets, introducing food-service-type home-meal replacement programs can be daunting, especially when it means sinking scarce resources into a risky competition with restaurant chains already carving out pieces of their business.
The Independent Grocers Alliance here saw both the risks, and the reasons to take them, and as a result is now offering its members a modular program that IGA officials say can smooth the transition to food service by lowering labor rates, increasing net profit opportunities and potentially lowering shrink.
Called Cafe IGA, the program, developed in a partnership among the voluntary network's headquarters, its member wholesalers and a traditional food-service manufacturer, has recently started appearing in stores, and the early results are extremely encouraging, said those involved.
"People are stopping me all over town to tell me how much they like our Cafe IGA," said Bill Seeber, owner of Rantoul IGA, Rantoul, Ill. "Our customers really seem to have taken to it. It's had an immediate payoff for us, too. My deli distribution is up 2% and my bakery up 1%."
"Cafe IGA allows our members to take part in the meal-solutions evolution," said IGA president and CEO Larry Willis.
Designed to allow retailers a chance to introduce any combination of food-service operations -- from a modest soup program all the way to a self-contained, front-of-store kiosk with hot and cold entrees, stews, rotisserie chicken, pizza, sandwiches, salads and sit-down dining -- Cafe IGA is the organization's umbrella for as little or as much HMR as a retailer can handle.
"We all know about how our customers are eating in restaurants more and more. Cafe IGA will allow our members to keep some of that business in the grocery store," said Willis.
Cafe IGA came to market as a result of the sort of cooperative concept development common in food service, a model that supermarket consultants have been urging on the industry, so far to little avail.
If it plays out as IGA officials hope, Cafe IGA could give cooperative members a leap ahead into the brave new world of HMR.
Officials at IGA, the world's largest voluntary supermarket network, decided two years ago that their retailer members would soon have little choice but to jump into food service. Considering IGA's diverse member base, deciding which direction to jump was as difficult for the nonprofit organization as it is for individual retailers.
What was needed, they soon realized, was an HMR program that would allow members to introduce some basic food-service-type operations, yet would be flexible enough so more ambitious operators could expand or modify the concept for their individual market areas.
But first, they needed to find a concept that could provide a credible base program for any operator. Enter Stockpot.
The Redmond, Wash.,-based fresh-food manufacturer and IGA Red Oval partner that last year added simmering sauces to their retail line of soups sold in supermarkets, saw the industry's delis as ideal locations to expand its business. Stockpot officials proposed working with IGA on implementing an in-store program.
That fit perfectly with the Cafe IGA concept, said IGA officials, but still posed questions, since the concept would presume little or no in-store food-preparation experience.
Stockpot began as a restaurant operation before it started selling soups and stews to other food-service operators. Today, its dishes are served, among other places, in Planet Hollywood and at Harvard University.
Stockpot offered IGA members restaurant expertise and a willingness to advise on a variety of programs. The company had already teamed up with C&K Market, Brookings, Ore., to set up food-service operations at more than 30 Ray's Food Place units.
But it was Stockpot's test restaurant that piqued the interest of IGA officials.
Located in Sun Valley, Idaho, the test restaurant is "kitchenless," according to Kevin Fortun, company president and chief executive officer. It's that chef-free concept that appealed to IGA officials, and is the key to cutting costs, said Fortun.
Retailers receive food-service packs of such soups as Azteca chicken with rice and jalapenos, and entrees such as jambalaya, seafood gumbo, and macaroni and cheese. All have 90- to 120-day shelf lives, and Stockpot supplies merchandising equipment, decor, awnings and serving advice.
"We'll help them with recipe ideas for things like rotisserie chicken, for instance. We'll show them how to debone leftover chicken, put it into a chicken pot pie and make it a value-added product with no waste," said Fortun.
The modular program can be as simple as a soup-and-sandwich program, or include tossed-to-order salads, entrees, stews, side orders, branded and store-made take-and-eat items and rotisserie chicken programs are joined together under a modular space.
So far, in addition to Rantoul IGA, operators in Bend and Salem, Ore., have taken on the program.
Before Seeber renovated his 38,000-square-foot Rantoul IGA, he hadn't even operated a sandwich program, although he did have fried chicken and a hot-table program.
Now, with help from IGA and Minneapolis-based wholesaler Supervalu's Champaign, Ill., division, he's making sandwiches and salads, developed his own rotisserie chicken and pizza programs, and started serving Stockpot soups.
Seeber's store is now selling between 45 to 55 rotisserie chickens daily, with no promotion, and is already considering adding another rotisserie.