VENDOR VALUE

ROSEANNE HARPER

The ever-evolving fresh-meals business has given rise to strong new partnerships between retailers and manufacturers, who are working together in unprecedented ways to woo meals customers away from restaurants and into the supermarket.

Supermarket executives are recognizing the value of dealing directly with manufacturers to source fresh entrees and other meal components, and national brand manufacturers are bringing advertising money to the table.

Some retailers, trying to do it all in-store, have been confounded by labor costs and other production issues. For many reasons, it pays for them to let someone else do the manufacturing and packaging, they said. But they also stressed the need to work closely with manufacturers on every level.

"The critical part for us -- in our meals-solutions program -- is our relationship with our vendors," said Marty Greeley, category manager of the meal center for the 154-unit Hannaford Bros., Scarborough, Maine.

After experimenting with various ways of sourcing fresh entrees -- including extensive in-store production -- Hannaford is now using a combination. The combo features a few simple, store-prepared items and a larger menu of prepacked items, many of which are made to the chain's specifications.

"We've decided, based on economics, that we need to form strong partnerships with manufacturers. They have the equipment, the trained work force, the transportation," Greeley said.

Some of the manufacturers also have enviable marketing muscle, other retailers said.

One supermarket executive said he's particularly glad to see manufacturers putting money into educating consumers about fresh, prepared products. He referred to a huge advertising campaign launched this month by Perdue Farms, Salisbury, Md., and DeLuca, Inc., Middlebury, Conn.

"With Perdue's marketing expertise and their ability to make things like this happen, it enhances the whole ready-to-heat category in our stores," said Bernie Rogan, director of corporate public relations for 126-unit Shaw's Supermarkets, East Bridgewater, Mass.

"We're delighted to see the Perdue energy put into what is already an established and widely accepted line, the DeLuca products," he added.

New England supermarkets will be the first to benefit from the Perdue-DeLuca campaign, which gets a send-off this week with the distribution of freestanding inserts that feature $1-off coupons. An identical FSI drop is set for the New Jersey-metro New York-Pennsylvania region a week later.

"Get Fresh! Introducing new fresh & easy entrees. Ready in 2-3 minutes. Grab 'em in your supermarket's deli section," is the message on the FSI, which includes $1-off coupons for Perdue/Ed & Joan DeLuca brand fresh entrees.

At another New England supermarket chain, response to the ad effort was particularly positive.

"I like it when vendors get involved like this. We do a good job with some of our own products as well as with Perdue and DeLuca. This will definitely heighten awareness of the category itself. That brand recognition helps," said Scott Ruth, vice president of the meat and specialty departments at 47-unit Big Y Foods, Springfield, Mass.

Aside from touting the brands, the ad campaign has been specifically designed to educate consumers about fresh, never-frozen entrees, officials at DeLuca Inc. told SN.

"We expect the campaign to give the whole fresh-meals category a boost," said Jeffrey Zwicker, president and chief executive officer of DeLuca Inc., a subsidiary of Perdue Farms.

"The ad tells the story of the product and even where to look for it in the store. We're beginning to formally introduce this whole new category of fresh, center-of-the-plate entrees to the consumer, and we're trying to promote trial with the coupons," Zwicker added.

The ad features a close-up photograph of a plate heaped high with chicken cacciatore and pasta, one of five chicken-based entrees the two companies have developed since Perdue acquired DeLuca Inc. last summer. (See "Perdue Farms in Accord to Purchase DeLuca Inc.," SN, June 22, 1998.) The chicken-based products join a lineup of Ed & Joan DeLuca brand Italian entrees.

The first wave of colorful FSI ads was sent off Sunday, March 7, reaching consumers via New England newspapers that have a combined circulation of 2.7 million. Next to get the FSIs will be the New Jersey-Pennsylvania region; then, the mid-Atlantic region.

Additional print advertising plus radio and television commercials are coming up, Zwicker said.

At the time of the Perdue-DeLuca linkup, supermarket officials told SN they could foresee such a media blitz propelled by Perdue's marketing budget and its savvy.

"With Perdue's resources, they could drive the meals business by discounting the products for a while," said one executive at a large Northeast chain.

"Now that you've got two great companies working together, it'll give validity to the home-meal replacement category," said Jim MacDonald, vice president for perishables merchandising at Star Markets, Cambridge, Mass., in an earlier interview.

That sentiment was seconded last week by Robert Damato, deli and bakery director for Food Emporium, a Bronx, N.Y.-based division of A&P, Montvale, N.J.

"We've had a great relationship with DeLuca for years. These ads will be good for us," Damato said.

DeLuca's Zwicker stressed that the ad campaign was developed only after months of market research that included three sets of focus groups to determine the degree of consumers' awareness and their perceptions about fresh, prepared entrees.

"We've been working on a plan to position the category itself. That's why we did the research and now we're ready for aggressive advertising that will be ongoing and will raise awareness not just of our products, but of the entire category," Zwicker said.

The companies' market research found that consumers want to be able to buy a variety of entrees, that they prefer fresh entrees over frozen entrees, that they have high expectations of fresh entrees, that they choose from different meal-sourcing options at different times, and that they need to be told where to go in the supermarket to buy fresh, prepared entrees.

"Actually, the information we got validated what we thought was true. Especially that consumers choose from different [meal-sourcing] options depending on what else is happening on a particular day. For example, it might be a day the kids have to go to soccer. On another day, they might have time to 'graze' at the supermarket and inventory items for later," Zwicker said.

Researchers found that more than half of the participants who represented traditional families -- defined as families with more than one adult and with at least one child -- did some preparing of food at home more than half the nights of the week, but the key word is "some."

Participants indicated they like to "have a hand in the preparation," but that doesn't mean they want to start from scratch. They might choose to make a salad, but they want an entree that's ready to eat quickly, Zwicker said.

He pointed out that participants who chose fresh entrees over frozen did so because they perceived the quality to be higher, and because the preparation time was shorter.

"That part of the research was done in a nonpartisan way. Participants didn't know until the end of that session that our companies were involved," he explained.

The last phase of the research, which was concluded in December, found that most of the participants showed a slight skepticism about supermarket private-label prepared foods, Zwicker said.

"Our takeaway was that brands such as ours were more acceptable. Their perception was that the supermarket itself didn't have the expertise to be making these items."

Zwicker said he felt that one of the most important findings in the research was that participants could not quickly name the department in the supermarket that carries fresh entrees. Upon further questioning, some guessed the deli, he said.

That underscores the necessity for supermarkets to do something in-store to direct customers to their fresh-meal components. Signs or displays up front, and bag-stuffers and fliers could be used to do that, Zwicker said.