HMR IDDAOLOGY

ROSEANNE HARPER

MADISON, Wis. -- Supermarket deli departments are scrambling to keep up with new technology and changing consumer interests that can render a decision made today nearly obsolete by tomorrow.

The pace requires quick adjustments, and that's where the International Dairy-Deli-Bakery Association can help, according to Carol Christison, IDDA's executive director.

"The issues don't change much year to year. They're competition, labor, training and food safety. The thing that does change is the speed of change," said Christison in an interview with SN. "The old system of trial and error still works, but the trial period is shorter and the error factor has taken on major importance in a new way.

"The company who fails fastest and moves on to something that works is going to be the winner," Christison said.

IDDA, based here, is committed to helping retailers compete in the home-meal replacement arena, she said.

What follows are highlights of an in-depth interview with Christison about the future for IDDA and its constituency.

CHRISTISON: We commissioned an independent research study of 300 top retailers to find out just what it was they needed.

Two major findings stood out. First of all, they wanted to know why consumers were buying meals from HMR outlets rather than from supermarket delis or food-service outlets. Secondly, they wanted to know how to use the tools and programs they had to combat these competitive threats. They knew the theory, but what they asked for were the applications or the "how-to" elements.

SN: What else is IDDA doing to help retailers deal with change?

CHRISTISON: IDDA has a pooled resource of members from all sides of the supply chain -- retailers, wholesalers, manufacturers, brokers, distributors, importers, exporters, and other professionals. IDDA identifies a few critical issues and uses our members' equity to research and publish information that helps retailers with skills, understanding and strategy.

SN: What are the challenges ahead for IDDA itself, this year and beyond?

CHRISTISON: Our biggest challenge is managing our growth. We are very fortunate to be experiencing double-digit growth in new members and in exhibits.

Our goal is to make sure that the projects we choose to develop are the ones that will serve our members and that they are not self-serving. For this year, we're smack in the middle of our new category management model for in-store delis and bakeries. The computer model is done and we're working on the manuals and the training sessions that will start in the fall.

SN: By your conference program, there will be an increased focus on HMR, with the ShowPlace being devoted to the subject.

CHRISTISON: Last year's program had several sessions that talked about home-meal replacement. They were standing-room-only sessions and were rated extremely high in our program ratings. Combine that with the wonderful success of the FMI MealSolutions conference last fall, and it's a short leap to seeing the driving interest that retailers have. We wanted to make sure that what we were doing wasn't a knee-jerk reaction to a fad or buzzword.

SN: Please go into more detail on the consumer research you've commissioned.

CHRISTISON: We had proposals from major research houses to develop the program. We liked two of the proposals and couldn't decide between them because they both had wonderful elements that brought different perspectives. So, we decided to ask them to combine resources and do a cooperative study. The result is that Willard Bishop Consulting, [Barrington, Ill.,] and Frederick Schneiders Research, [Washington,] are doing the project together. The highlights will be presented at the seminar and published this summer.

I think a lot people are going to be surprised; I know we certainly were. Some studies have looked at the supermarket HMR consumer and how to get them to buy more. We took a different tactic and decided to focus on the enemy camp -- the quick-service restaurant HMR consumer.

We picked three markets, ran focus groups in each, and did 300 targeted, in-depth telephone interviews in each market. The highlights of the study will be presented by Bill Bishop and Keith Frederick. Understanding the different mind-sets, attitudes and buying behavior of the HMR consumer will be critical to developing marketing strategies.

For applications or how-to information, we went back to the drawing board and took it to five separate IDDA committees: Program, ShowPlace, Bakery Steering, Dairy Steering, and Deli Steering Committees.

Each was asked to look at the objectives and to recommend topics or speakers. The programming element was pretty much put to bed in August when four of the committees made their recommendations for presentation topics and speakers at this year's seminar. The ShowPlace Committee didn't complete their plans until January of this year. There was a lot of discussion back and forth.

When it was all done, we had come about 180 degrees from where we started. We wanted to show retailers that, first of all, they were already doing HMR, they just didn't call it that. Second, that they didn't need to totally redesign their operation or put in a food-service kitchen.

We've chosen four product categories -- pizza, entrees, sandwiches and a rotisserie program -- and will show how each can use four different applications or any combination thereof, to achieve a category HMR program. The applications are case ready; assembly; part assembly, part scratch; and full prep.

SN: Should retailers care about branding in their HMR programs? Isn't HMR a prime opportunity for them to push their own name, rather than a manufacturer's?

CHRISTISON: A co-branded program is really a combination of the retailer's product and the brand name. The bottom line goes to credibility and trust. If a consumer is familiar with the retailer's food and has good success with it and trusts it, then that would indicate that a store brand or signature line will do well. However, we've found that the consumer doesn't trust the supermarket the way they trust a Boston Market, or quick-service restaurant for example. Their perception is that the supermarket product has been sitting there all day and isn't as fresh as product that's "made fresh." By introducing a brand that they know and trust, you've gone a step further in selling them on quality.

There's a halo effect to the whole product with a brand name. For example, a sandwich with a sticker that says "Made with Jarlsberg cheese" or whatever, sends a subtle quality message.

SN: Isn't HMR being overplayed, with the Refrigerated Food Association, Food Marketing Institute and Retailer's Bakery Association, and local associations, all seizing it as a topic? Isn't there duplication of effort here?

CHRISTISON: I think that the fact that each of these associations has developed HMR programs just adds fuel to the argument that this isn't a fad. The FMI MealSolutions program did a wonderful job of getting the industry's attention. Until then, retailers thought their competition was the supermarket across the street or the fast-food outlet on the corner.

There are duplicate programs. If you look at the national and regional seminars, you'll see many of the same speakers talking about the same topics over and over again.

The message isn't new; they just keep finding new audiences. And that's good. Our activities are different because we've worked hard to find new speakers and messages that haven't been overexposed. Many of our speakers are under contract to present new information at our show first.

SN: Do you see the possibility of IDDA getting together with any other organization for a conference or any other form of collaboration on HMR?

CHRISTISON: As you just said, there are a lot of programs already out there on HMR, so I'm not sure the industry really needs another. However, IDDA is always interested in pursuing joint ventures with other associations.

SN: You're not having the Merchandising Challenge this year? Why?

CHRISTISON: The Merchandising Challenge was the responsibility of the ShowPlace Committee. When we decided to change the ShowPlace to focus on HMR this year, we knew that we couldn't do both. We love the Challenge and plan to bring it back later.

The resources, both financial and in personnel, were so great for the HMR ShowPlace that we needed to be totally focused in order to pull it off. The budget for creating the HMR ShowPlace is almost $300,000. And that's with using volunteers and donated equipment.

SN: What are changes you've made in your show and program this year, both in format and focus?

CHRISTISON: I love that you used the word "focus." Last year, I bought Al Ries' new book, "Focus, The future of your company depends on it. I was so impressed with that I bought 40 copies and hired him as a general session speaker this year. He and his former partner, Jack Trout, are well-known management gurus.

We've got a really strong line-up of speakers. Pat Williams, owner of the Orlando Magic basketball team is our keynoter. Harold Lloyd and Howard Solganik have both developed new programs on different aspects of HMR just for the IDDA show. We brought back T. Scott Gross to talk about customer service. The retailers rated him very highly and asked to see him again. Frank Feather is the guy who coined the term, "think globally, act locally" and he's talking about the future consumer.

Our format hasn't really changed because it works. Strong speakers, timely issues and a merchandising theater focused on HMR.

SN: What other ways is IDDA helping supermarkets get up to speed in HMR in particular?

CHRISTISON: Our new ProfitWise newsletter for retailers features selected topics with in-depth assessments; the first issue was on HMR packaging. We're producing a new HMR video with a focus on the dairy case, an often overlooked opportunity. That will be premiered in the IDDA booth at the show. Retail buyers and merchandisers attending the seminar will receive a free HMR resource book to take home. It will include source lists, ideas, tactics and special articles on HMR concepts.

SN: Will you update your IDDA deli training program to focus more on HMR?

CHRISTISON: That's one of the topics in our long-range plan. I really won't have details until our annual business meeting in August.

SN: Please comment on the research you've commissioned on category management in the supermarket deli.

CHRISTISON: Outside of our deli and bakery training and certificate programs, this is the biggest project we've ever undertaken. The category management planner includes computer templates and worksheets based on Microsoft Access and Excel, or Lotus spreadsheets. The category managers will be able to choose the elements that are critical to their plans and create competitive strategies from the plans.

Service deli and in-store bakery have been the stepchildren of category management because of the extreme difficulty in capturing market share and product movement data. We've added a separate panel that will focus on how to gather information in data-poor categories.

SN: What is the biggest obstacle, at retail and in the supply chain, to category management's progress?

CHRISTISON: There are a number, but the biggest obstacles are the lack of accurate scan data, the number of hours it takes to write a plan (80 hours is mentioned most often), and the lack of market share data. Our new planner will provide some logical templates to focus the data collection. We've also added a great panel to the seminar that talks to that issue. Retailers need to understand how data availability and integrity drive a successful category management program.

We'll show them how to get historical performance data and market-level data, along with existing sources of other data. This includes supplier market share information, competitive channels, market coverage, consumer data, pricing, promotion and even "gut level" or intuitive information. Using all these sources along with the IDDA planner can help develop a picture of the category.

SN: Is IDDA's focus on cheese changing in any way? How about dairy? Is dairy being left behind by value-added, consumer-oriented product and merchandising trends?

CHRISTISON: Our roots are in cheese. It's adding to that foundation and diversifying into related categories, such as deli and bakery, that has given us our strength. If you look at the consolidation of the cheese industry and the number of small producers that have gone out of business, you can see how it's affected not only this organization, but others.

To help promote the small specialty cheesemaker, IDDA and the Wisconsin Milk Marketing Board have sponsored a "Cheesemaker's Showcase" at the show. There's a lot of innovation and research going on in cheese.

And dairy isn't taking a back seat to anybody. It's just as creative, innovative and value-added. Manufacturers are finding new recipes, new packaging, new strategies and new customers.

SN: What do you see as the future for traditional deli, i.e., slice meats and cheeses?

CHRISTISON: The future will, as always, depend on consumer tastes and lifestyles. The search for new flavors, new spices, value-added, good-for-you foods will bring more choices. It's not just about sliced meats and cheeses anymore, although that's a major component.

SN: What about bakery? Is IDDA taking emphasis off of bakery in the light of so much interest in home-meal replacement?

CHRISTISON: No way. Bakery was and is one of the cornerstones of our growth and we're as committed to it now as ever. I think it's unfortunate that so many in our industry don't think that bakery has a prominent role in HMR. Where would pizza be without crusts? Where would sandwich programs be without bread and wraps? Where would dinner be without bread and rolls? They need to take their blinders off and understand that HMR isn't just about dinner. It's about meals. It's about breakfast, lunch, dinner, snacks. You name it.

Just look at Eatzi's. You walk in the door and the first thing you see and smell is their bakery. In fact, many restaurants have on-premise bakeries that promote take-home sales, as well as add to the meal. And we're not just talking about wonderful flavored breads; the dessert and pastry lines have gone dramatically upscale in taste and presentation.

The saddest part of all this is the lost opportunity when departments think they're in competition with each other, when they should be working to sell each other's product as a component for a total meal. Until upper management changes the way they reward managers, this sorry state will continue.