TAMPA, Fla. -- Retailers who toured the Idea Center on the show floor at MealSolutions '98 here walked away with heaping portions of new ways to serve their own customers supermarket fresh meals.
This year, the center focused on five core concepts that have emerged as the most popular methods of operating a fresh-meals department: scratch/on-site preparation; assembly of components; case-ready; partnerships/franchises; and total store area. Each concept was described in detail by "captains," who walked attendees through the benefits and challenges of each program. The entire effort was coordinated by Shari Steinbach, meal solutions and consumer affairs manager at Spartan Stores, Grand Rapids, Mich.
Scratch/On-Site Preparation and Assembly of Components
The rich aroma of whole ducks and pineapple roasting in a glass-front oven filled the area, as two smartly dressed cooks in toques bustled amidst a rotisserie, sinks, a combi-oven and work stations. Chef Bill Reynolds of the Culinary Institute of America, Hyde Park, N.Y., noted that this theater of the senses can help create value and leverage a retailer's brand in the minds of consumers.
"The key here is activity," he said. "Keep things moving during peak selling times. Notice how the duck juices marinate the pineapple, how the cooks are in constant action. This is the restaurant kitchen brought right up to the customer."
Scratch operations are the most difficult to operate, he conceded, though there are options available to retailers in the form of frozen or already-prepared sides and components that can be integrated with the on-site preparation of entrees. For example, he pointed to a bulk hot case where frozen carrots had been cooked with herbs to create a simple, but popular, side dish.
Almost all the foods manufactured in-store under these methods can be packaged hot for immediate sale during meal times, or quick-chilled for later sale. Either way, Reynolds stressed the operation does not have to be "huge" to be successful.
"This particular operation is very small, working with essential equipment," he said. "We're creating six meals using a stove top, deep fat fryer, combi-oven and rotisserie."
The prepared meals created with the equipment were varied and appealed to all levels of taste. Besides the duck with pineapple slices, there was pork with apple compote, salmon with sauce and the ever-popular fried chicken. Each meals package included the 6-ounce protein, and 3 ounces each of a vegetable and starch, which were also displayed in bulk in a hot case adjacent to the open, grab-and-go case holding the hot meals.
Because the customer eats supermarket-prepared meals once a week, on average, "you should have the ability to change at least part of the menu once a week," said Reynolds. Certain standards, such as a signature item, or the fried or rotisserie chicken, should be available every day.
Reynolds noted that chicken remains a scratch kitchen favorite, because it is "high profit and extremely versatile." Likewise, consumers like it because it is "an acceptable low-fat protein, depending on how it is prepared," he said.
He added that there is an increasing interest in vegetarian meals, and suggested that retailers with a scratch/component operation make several offerings available. Food costs will be even lower, since all the dishes are composed of non-meat ingredients.
"It's important for you to work out the ratio between food costs, which are low in this type of operation, and labor, where you'll need trained personnel," said Reynolds.
A professionally trained chef would require an annual salary of $50,000 to $65,000, depending on his experience, responsibilities and the location of the operation, he said.
The area was purposely designed with only two displays to drive home the point, said Scott Miller, formerly director of food-service operations for Randalls Food Markets, Houston, and now president of Miller Consulting, The Woodlands, Texas. Miller said that case-ready meals operations are like an umbrella that creates a "branded" image, by consolidating scratch, frozen and fresh-prepared products into a single program within the store. In this example, everything is capable of fitting into two cases.
Critical to the success of such a program is in-store operations and support, "because without store-level execution, it's a moot point," he said. "You can have the greatest merchandising programs in the world, but if you don't have operations buying in, that will torpedo any program."
To get a case-ready program "ready," retailers have to determine their source of product mix. Whether from scratch, commissary or third-party, Miller noted, it is critical for all parties to form relationships that support the retailer's program. Strong bonds will be necessary for the company to carry the program through to the customer-intensive phase, which involves sampling, advertising and promotions.
The two cases in the area included a four-deck island and a combination dry/refrigerated, three-deck with a reach-in bin. On top of the island, an attractive display of wine bottles and French bread surrounded a sign that announced itself as the fresh meals to-go destination: "Ready-to-Eat! Ready-to-Heat!" On the top deck, additional shelf tags with the same logo reinforced the message.
The shelves held a wide variety of items, from panini sandwiches in color-coded bags to heat-and-eat fresh soups. There were also individual entrees, side dishes, casseroles and whole meals. Some were prepared on-site, while others were sourced from third-party manufacturers.
The case was further divided by meal segment. A section separator marked "appetizers" was placed next to packages of sushi and Asian bowls. In another section, family-size portions of lasagna and similar hearty favorites had been prepared by a mock "scratch operation," chilled, and brought to the case.
However, it was the other case that received the most attention. The upright unit topped with the "brand name" of the meals program included a reach-in, open freezer box on the bottom, three decks of open, refrigerated shelves, and, on the outside, two extra-high dry shelves.
In this example, the merchandiser had an Italian theme, with four facings of ready-to-heat pizzas in several varieties and sizes in the bottom bin. The three interior shelves were packed with both individual and family-size Italian entrees, while the outside dry shelves held the meal program's signature transport bags. Loaves of fresh Italian bread were merchandised on either side, stuffed into one of the bags on each top shelf.
Merely bringing in items under a meals-solution umbrella case can improve sales by double digits, said Miller. Other experts present at the Idea Center cited their own experiences. One said solution selling increased movement of products by 20%, while another former retailer said that, during his tenure at a major chain, the implementation of such a program improved sales by a margin of 60% to 300%.
However, in this section, "the case has to stay focused on the meal," said Miller. "The consumer has to understand it's just not another endcap."
Partnerships/Franchises and Total Store
The largest room in the Idea Center also included the largest opportunity for retailers to cross merchandise products from other parts of the store, including perimeter departments and center store.
Dennis Hedegard, formerly of Shaw's Supermarkets, East Bridgewater, Mass., and now a consultant, began the tour with a stop at a franchised Manhattan Bagel operation. One retailer who brought in a Manhattan Bagel franchise "found that sales for their entire bakery department went up significantly, excluding the bakery itself," said Hedegard.
The retailer found that the franchise's brand name created a halo effect over the entire bakery department, and improved the bakery's overall image of quality, he said. The glass-front service counter also doubled as a self-service case, where customers could open drawers to retrieve particular varieties of bagels. Behind the case, a menu board listed bagel sandwiches, "Wrapps" and roll sandwiches. The case rested atop an open refrigerated bin, where 8-ounce containers of flavored cream cheese were available for the taking.
A self-service soda fountain -- the type that is found on a deli line -- was also in operation, and served as another example of how franchises and partnerships with brand-name companies can improve overall sales. Food-service margins on soda are typically in excess of 80%, he said.
Cross merchandising wines and floral selections was made easy with a unique, four-sided display rack that was also extremely mobile.
"It truly brings it all together in a very small footprint," said Hedegard.
The merchandiser stood in front of a series of cases that included hot grab-and-go selections, rotisserie chickens and complete prepared meals. This set-up, described as a hybrid by Hedegard, served as a completed vision constructed with the building blocks of the scratch and case-ready displays.
"Scratch cooking is a piece, and assembly of components is a piece," he said. "This is how it can all come together in a relatively small area. It represents all of what each retailer is doing in part."
Next in the perimeter line was an 8-foot seafood case holding prepacked marinated raw seafood. The display -- demonstrating how quickly the seafood department is moving into the fresh-meals arena -- also included a free steaming service, according to a sign posted atop the case.
Adjacent to the case was another favorite of any chain's fresh-meals strategy: sushi. Hedegard pointed out that manufacturers are now producing a product akin to slice-and-bake dough. Retailers who do not wish to invest in a fully staffed sushi program can open the package and slice off individual rolls of sushi for packaging.
The meat department's contribution to solution selling came in the form of various value-added meats, such as kabobs, stuffed pork chops and marinated steaks. While these items may have been around for years, Hedegard said, they can play a new, vital role in solution selling.
"This is an example of how you can take a total-store approach and put that marketing umbrella over it, to 'solution sell' your entire store to the meals-solution consumer," he said.
In this section, the upright unit from the case-ready room was present under a different guise. Here, it carried a Mexican theme. The outside shelves included a number dry grocery items from center store, such as taco shells, spices, salsa and rice. Hamburger and chicken were merchandised in the center reach-in bin, while the refrigerated shelves held lettuce, tomatoes, peppers, onions, sour cream and shredded cheese.