NEWTON, Mass. -- At a ground-breaking meeting here last month, 80 representatives from five segments of the retail food industry got together to discuss how the independent supermarket segment can take on the competition -- the restaurant industry.
The meeting drew independent retailers, wholesalers, distributors, brokers and manufacturers from across New England.
They were told that all segments of the retail industry must work together on more effective marketing and merchandising if supermarkets are going to reclaim some of the meal dollars currently lost to restaurants.
One speaker stressed that supermarkets are not even thought of as a viable option when people are trying to solve their meal problems. That has to be corrected "or the restaurant industry will continue to take the money," he said.
In general, food-service departments in supermarkets should act more like restaurants and stay well informed on safe food-handling procedures as they get further into the prepared-foods business, attendees were told.
Retailers interviewed by SN after the meeting said the event was unusual, and maybe unique, in getting the various segments of the industry together in such a setting to discuss meal solutions. At least one retailer, Mark Chaet, seafood-deli director at 10-unit Foodmaster Super Markets, Chelsea, Mass., saw it as a valuable warm-up meeting that he hopes was just the first in a series.
"It was very interesting and productive, I think. It gave us a feel for who the real competition is," Chaet said. He also noted that it was unusual to get so many independent retailers together with people from other segments of the industry.
"Hearing what other retailers are doing and also being able to talk directly to the manufacturers, the people from their main offices, was nice. It was really good for an idea exchange," Chaet said.
He said he felt the presentations given by manufacturers were productive, particularly in stressing the urgency for supermarkets to get up to speed in the home-meal replacement arena.
"They pointed out how fast the [HMR] market is growing and how we have to get going or we'll be left behind," Chaet said.
Speakers were Ed DeLuca, co-founder with his wife, Joan, of Ed & Joan DeLuca Inc., a Middlebury, Conn., manufacturer of chilled entrees; and Randy Day, vice president of quality assurance at Perdue Farms, Salisbury, Md.
Some of the attendees at the meeting here said that the speakers' way of contrasting restaurant operations with supermarket food-service operations struck a chord.
For representatives of Associated Grocers of Maine, a Gardiner, Maine-based wholesaler, that was especially true. Association attendees will deliver much of the information covered to its membership at a special seminar in September, said Greg Norton, meat-deli-bakery manager at AG of Maine, which has 350 retailer members in Maine and parts of New Hampshire.
"What really hit home was the way Ed DeLuca pointed out that supermarkets have got to change all the way around in order to compete with restaurants," said Norton. Norton and three other AG of Maine representatives attended the meeting here.
DeLuca, a former restaurateur as well as a former KFC executive, organized the meeting with the help of Try-Angle Foods, a Norwell, Mass., broker.
"He made it clear that HMR is here, not in the future and that if retailers don't change, restaurants will take the dollars right out of their cash registers," Norton said of DeLuca. "The meeting was an eye-opener. It was an unusual opportunity for independent retailers and people from the other parts of the industry to sit down together to hear these facts about home-meal replacement. I think it's a first. I haven't heard of such a meeting in this part of the country before," Norton added.
One of the independent retailers -- John Lucci Jr., of Lucci's Market, Wilmington, Mass. -- who attended the meeting said this type of event is great for encouraging different segments of the industry to keep communication lines open. That's a particular necessity because such items as fresh, never-frozen entrees and sides are new to so many retailers, he said.
And that was precisely what DeLuca, long a proponent of building strategic alliances with others in the retail industry, intended the meeting to be, a catalyst to get people talking to each other, he said.
The first order of business for the retail industry, DeLuca said in his presentation, is to get consumers to think of supermarkets when they think about what they're going to have for today's lunch or tonight's dinner.
"Everybody's talking about 'share of stomach,' but the restaurant industry is a few steps ahead. They talk about 'share of mind.' They do things to make customers think of them when they get hungry," DeLuca said.
"But first, supermarkets need to realize they're not thought of as a viable option when it comes to meal solutions." Then they need to figure out who their customers are and take steps to let them know they can offer them what they want, he added.
He emphasized that effective marketing and merchandising is sorely lacking in most supermarkets. To get the meals message across, retailers who don't have a marketing expert should think about hiring an ad agency or consultant, and, in some cases, strategic alliances with others could be forged for research and marketing efforts, DeLuca said.
"The supermarket industry has been offering meal solutions forever with chicken and pizza and most are doing a good job with them. But they're not defining them correctly. Until Boston Market coined 'home-meal replacement,' nobody had heard of it," he said.
DeLuca advised supermarkets, in their marketing plans, to create a point of difference or signature product that will make consumers think of them when they think about eating.
He recounted a conversation he had recently with Frank Perdue, in which Perdue said he realized he needed a point of difference in his product, one he could crow about. Perdue began to breed chickens for the largest amount of breast meat in order to set his product apart from the rest.
"It's difficult to make a memorable brand out of a commodity product, but he did it. Their advertising is legendary," DeLuca said. Coining a phrase that describes your product can work, too, he said.
Once a retailer establishes that he has the top quality products it takes to be a viable option in the home-meal solutions arena, he also needs to change his mind-set to that of a restaurant operator, DeLuca said.
"Grocery thinking is to keep the shelves full, but it's OK to be out of stock when you're selling prepared foods. As a restaurateur, I was always thinking about freshness, not about keeping my buffet table full or cooking enough ahead of time for the rush," DeLuca said.
"If there's something not right with your meal in a restaurant, there's something done about it. There's a manager or someone there to take care of it, if there's a problem. We'd buy the meal for you or replace it with something else," he said.
"But if I buy one of your [rotisserie] chickens and it ain't so good, I probably just won't come back. First, I probably couldn't find the manager and even if I thought I could, I have no indication that you guarantee the quality of your food," DeLuca added.
Operational procedures must also make buying the product convenient for the customer but, above all, the product has to be top quality, he said."That's what brings people back."
Quality means it tastes good, but also means it's been prepared and handled safely, Perdue's Day pointed out in his presentation.
"Since more and more of us are preparing ready-to-eat foods, we have to be more sensitive to foodborne pathogens," Day said. In addition, consumer advocacy groups have made pathogens in meat and poultry a hot issue, he said.
"Microorganisms have to eat to survive and they like the same food we do. That's how they get in your food and it's continual. We have a research department that looks at these organisms on chickens and we trace them back. They can enter your food anywhere, including in your deli or on the kitchen counter," Day said.
He pointed out that studies conducted by the Center for Disease Control show that when there's an outbreak of foodborne illness, the contamination takes place in 70% of cases at the food-service establishment. By contrast, only 10% were at the production facility and 20% in the consumer's home.
Day stressed that there's no known technology to eliminate the risks of contamination, "but we have to educate ourselves and everybody else on how to reduce the risks and we have to invest in more R&D to further reduce them."
He also urged retailers to follow Hazard Analysis Critical Control Point procedures even though at this point they're not required by law to do so. He concluded by telling retailers they could consult Perdue's team of scientists with questions they might have about food safety.
Sharing of information is an important part of the fight to get the consumer's meal dollars back, both speakers said.
"We need to get together like this more often because our common enemy is the restaurant industry," DeLuca said.