HMR STUDY: CUSTOMERS WILL MOVE TO FRONT BURNER

JACK ROBERTIELLO

LONDON -- Retailers and manufacturers will increasingly focus on customers, rather than on products, in the meal-solutions market as it approaches 2002, according to a study developed by global market research consultancy Datamonitor, based here.

But, the study concluded, a current climate of hesitance among retailers and manufacturers to establish partnerships to develop meals programs, even in areas they consider important, may stymie their efforts at a crucial point.

The report, "Meal Solutions: Helping Market Relationships," asserts that development of innovative product lines and the creation of a loyal consumer base are the keys that will unlock retailer success in the meal-solutions market.

Until now, product development, packaging, branding and other concerns have been almost the exclusive focus of the burgeoning meals industry. But analysts at Datamonitor claim retailers will be shifting their focus to consumer service, response and demographics in order to develop a loyal customer base.

Datamonitor made other predictions as well. As customer demographics vary from area to area, so, too, will meal solutions offered by savvy retailers differ from store to store. On-line meal shopping and home delivery will increase as the Internet takes a greater hold on consumer activities and as time-pressed families become less able to spend time food shopping and even eating away from home.

Datamonitor's findings, culled from interviews with about 250 retailers and manufacturers, uncovered little cooperation between them. Customer research is rarely shared between the two, even though "a joint commitment to the consumer is an absolute necessity to the meal-solution market's success."

Retailers and manufacturers who have established strong cooperative efforts have been able to reap substantial rewards in return for little effort, the report concluded.

Respondents to the Datamonitor survey claim main dishes are the most popular meal-solutions offerings, accounting for more than 52% of sales in 1996.

Meat and poultry are the most popular meal-solutions offerings, accounting for more than 60% of sales in 1996. Pizza was the second best selling item accounting for 12.2% of the market.

Home-meal replacement specialists, which include Boston Market, Eatzi's, Kenny Roger's Roasters and other niche operators, are likely to realize sales increases of almost 20% by 2001, to account for more than $3.6 billion in sales annually.

Datamonitor defines HMR as ready-to-eat foods sold from a variety of operators, including supermarkets, and estimates the total HMR market should reach $67 billion by 2001, according to company analyst Sean O'Neill.

The organization defines the meal-solutions market as including HMR and all fast-food and convenience-store prepared meals, as well as ready-to-eat and ready-to-heat supermarket foods, and predicts the entire category will top $161 billion by 2001.