HOME IS STILL WHERE THE MEALS ARE: STUDY

STEPHEN DOWDELL

LOS ANGELES -- New consumer research from the Food Marketing Institute, Washington, shows that consumers still want to eat at home, and indeed are doing so most of the time, despite the fact that they may not have the time or the inclination to cook that home meal. That could be good news for supermarkets chasing after the meals business, but only if they fully understand what their consumers want from a meals program and how the supermarket culture must change to give that to them, said an industry panel that opened the second annual FMI MealSolutions conference here last week. The panel -- three retailers, plus a consumer expert from a major packaged food supplier and a researcher of eating trends -- presented a snapshot of an industry with an apparently maturing attitude toward how it must attempt to conquer the meals business. One year after the FMI staged its first meals conference to acknowledge the urgency of preventing restaurants and the home-meal replacement niche from attracting more of the consumers' food dollars, the MealSolutions gathering last week reflected an industry that is taking the challenge seriously, if still struggling with how to proceed. The panel convened to open the conference concluded consumers hold the key, and its members agreed retailers and suppliers have to do more to bend their strategies and operations to the consumers' will. Doing so effectively, they added, calls for big changes in the typical corporate culture, which still clings to efficient buying as the ultimate goal rather than effective selling based on consumer needs. The discussion began with a preview of consumer research conducted by NPD Group, Rosemont, Ill., for the FMI and introduced at the meeting. NPD's research, based on food-purchase diaries, painted the portrait of a consuming public that wants to eat meals at home, but increasingly does not seek to cook them at home, which Harry Balzer, NPD vice president, said augers well for supermarket meals programs. "Home is where we eat most frequently," he told the audience, many of whom were supermarket food-service executives. Balzer's interpretation of the data, in essence, is that the meal providers in America -- mostly females, he said -- are looking for cheaper, easier alternatives. Eating in restaurants, he said, is not necessarily the cheap, easy answer, and while about half of the food dollars are going to restaurants, only 20% of meals are being eaten at them. Takeout, and supermarkets as prospective providers of it, offer a cheaper alternative. "The cheapest meal still comes from supermarkets," he said. "Don't forget that." But supermarkets are only viable meals marketers if they learn who the consumer is and how to sell to that profile. The retail panelists were comforted by the message that the home is still a preferred place to eat, but were less comfortable with their industry's ability to be the prime home-meal provider. "The consumer is not June Cleaver, she is Murphy Brown. But at the store level we are still selling to June Cleaver," said Jim Reynolds, the vice president of marketing for Albertson's, the Boise, Idaho-based chain of 842 stores that is attacking the meals challenge with a total-store program called Quick Fixin' Ideas. "We have not paralleled what the consumer wants," said Larry Ziels, senior vice president and chief operating officer of marketing/operations for Brown & Cole, Bellingham, Wash., which has 24 stores. The FMI reports that now, 22% of consumers say they view supermarkets as a primary destination to get takeout meals, compared with 12% just a year ago. "The growth is there," said Michael Sansolo, the FMI's senior vice president and panel moderator. But retailers still must learn a lot about consumers and translate that into products and operations before that percentage can climb much further. Balzer said the data shows that females still prepare most meals, with 72% saying they make at least one meal a week, compared with 27% of men. He said that in the portion of meals going to providers outside the home, such as restaurants, what consumers are really buying is service, rather than food. The NPD research led Balzer to conclude that the search for easier ways to prepare meals is a driving force. Scratch at home is still in the picture, with dinners containing at least one scratch item being consumed 55% of the time. However, that has been trending down since 1986, Balzer said. Consumers are also trying to make it increasingly easier by making more at a time and saving leftovers. They are also often narrowing the meals' focus to the entree, which is the only component not in decline. Side dishes are fading, he said, despite the popularity of vegetables, because they are seen as another component that must be made. The "make it easier" trend is what is driving consumers to restaurants, Balzer said. Now, 133 meals per person each year are being purchased at restaurants, but while the takeout portion of that is growing, the eat-in segment is dropping, he said. The importance of takeout, or HMR, as an alternative is tied to "life stage," with the highest percentage of users in the groups of young couples and working parents, as well as affluent traditional families. Balzer noted that such consumers are more typically going to get takeout on the way from home, rather than on the way home from work, running counter to the suggestion that consumers need to be intercepted during the after-work drive home. The takeout meal is a better value than eating out, consumers said, with the average cost $9.94 for takeout compared with $15.49 for a sit-down meal. Balzer added that consumers are willing to spend $10 for a meal, "but don't ask me to spend more than that." The top food being brought home for dinner is pizza, though its frequency as the top choice is declining. A distant second is the burger, followed by chicken, Chinese/Asian, and Mexican; those in the trailing pack, however, are experiencing growth as a chosen takeout meal, except for chicken. Summing up his preview, Balzer reiterated his analysis that the data indicates consumers still want to eat at home most times, and takeout is a desirable option as long as the price is right. Panelist Reynolds of Albertson's said the chain initially did not recognize the public's desire to eat at home. "When we first started Quick Fixin's, we thought we'd be grabbing them out of the restaurants," he said. But the message from the FMI's research is that "there still is the desire to get involved in preparing meals, as well as buying already prepared meals," an allusion to his chain's decision to spread the Quick Fixin's program throughout the food departments beyond deli. Brown & Cole president Ziels expressed some surprise at the data, but found it "in favor of us." At-home eating, he said, is apparently "more prominent than I had thought." He added that he interpreted the trend to mean that "Taste is not that important, but time is." Ziels said that in Brown & Cole's attempts to get its 24 stores more in-line with the meals market, it is difficult to get the message to consumers that it is in the game for real. While operational components such as a bagel sandwich station in a new store and several Chinese kitchens are exceeding expectations, his stores should also be reaching out with bag stuffers, a meals hot line and other devices to draw attention to their efforts. For Albertson's, Reynolds said, "It is a matter of repositioning and repackaging what we had in the store initially." While the stores and product assortments will likely undergo more radical transformations eventually, he said, Albertson's opening gambit was to put the Quick Fixin's label on appropriate existing items from frozen dinners, to packaged salads, to value-added meat in the Butcher Block department. Infusing the stores with a mentality geared to selling meal solutions is another matter, he said. "We can't do it overnight. We are not even close to where we should be with the execution at the store level. It is not just personnel; it is how we deal with manufacturers. It is not just getting the lowest price." The challenge is big as well for Dan's Super Market, a 10-store operator in Bismarck, N.D., that like most retailers is culturally biased toward buying rather than selling. Terry Rockstad, president and chief executive, said the resistance to change came into sharp relief shows that consumers still want to eat at home, and indeed are doing so most of the time, despite the fact that they may not have the time or the inclination to cook that home meal.

That could be good news for supermarkets chasing after the meals business, but only if they fully understatnd what their consusmers want from a meals program and how the supermarket culture must change to give that to them, said an industry panel that opened the second annual FMR MealSolutions conference here last week.

The panel -- three retailers, plus a consumer expert from a major packaged food supplier and a researcher of eating trends -- presented a snapsshot of an industry with an apparently maturing attitude toward how it must attempt to conquer the meals business. One year after the FMI staged its final meals conference to acknowledge the urgency of preventing restaurants and the home-meal replacement niche from attracting more of the consumers' food dollars, the MealSolutions gathering last week reflected an industry that is taking the challenge seriously, if still struggling with how to proceed.

The panel convened to open the conference concluded consumers hold the key, and its members agreed retailers and suppliers have to do more to bend their strategies and operations to the consumers' will.

Doing so effectively, they added, calls for big changes in the typical corporate culture, which still clings to efficient buying as the ultimate goal rather than effective selling based on consumer needs.

The discussion began with a preview of consumer research conducted by NPD Group, Rosemont, Ill., for the FMI and idntroduced at the meeting. NPD's research, based on food-purchase diaries, painted the portrait of a consuming public that wants to eat meals at home, but increasingly does not seek to cook them at home, which Harry Balzer, NPD vice-president, said augers well for supermarket meals programs. "Home is where we eat most frequently," he told the audience, many of whom were supermarket food-service executives.

Balzer's interpretation of the data, in essence, is that the meal providers in America -- mostly females, he said -- are looking for cheaper, easier alternatives.

Eating in restaurants, he said, is not necessarily the cheap, easy answer, and while about half of the food dollars are going to restaurants, only 20% of meals are being eaten at them.

Takeout, and supermarkets as prospective providers of it, offer a cheaper alternative. "The cheapest meal still comes from supermarkets," he said. "Don't forget that."

But supermarkets are only viable meals markets if they learn who the consumer is and how to sell to that profile. The retail panelist were comforted by the message that the home is still a preferred place to eat, but were less comfortable with their industry's ability to be the prime home-meal provider.

"The consumer is not June Cleaver, she is Murphy Brown.

But at the store level we are still selling to June Cleaver," said Jim Reynolds, the vice-president of marketing for Albertson's, the Boise, Idaho-based chain of 842 stores that is attacking the meals challenge with a total-store program called Quick Fixin' Ideas.

"We have not paralleled what the consumer wants," said Larry Ziels, senior vice president and chief operating officer of marketing/operations for Brown & Cole, Bellingham, Wash., which has 24 stores.

The FMI reports that now, 22% of consusmers say they view supermarkets as a primary destination to get takeout meals, compared with 12% just a year ago. "The growth is there," said Michael Sansolo, the FMI's senior vice president and panel moderator: But retailers still must learn a lot about consumers and transalte that into products and operations before that percentage can climb much further:

Balzer said the data shows that females still prepare most meals, with 72% saying they make at least one meal a week, compared with 27% of men. He said that in the portion of meals going to providers outside the home, such as restaurants, what consumers are really buying is service, rathern than food.

The NPD research led Balzer to conclude that the search for easier ways to prepare meals is a driving force.

Scratch at home is still in the picture, with dinners containing at least one scratch item being consumed 55% of the time. However, that has been trending down since 1986, Balzer said. Consumers are also trying to make it increasingly easier by making more at a time and saving leftovers.

They are also often narrowing the meals' focus to the entree, which is the only component not in decline. Side dishes the popularity of vegetables, because they are seen as another component that must be made.

The "make it eaiser" trend is what is driving consumers to restaurants, Balzer said. Now, 133 meals per person each year are being purchased at restaurants, but while the takeout portion of that is growing, the eat-in segment is dropping, he said.

The importance of takeout, or HMR, as an alternative is tied to "life stage," with the highest percentage of users in the groups of young couples and working parenets, as well as affluent traditional families. Balzer noted that such consumers are more typically going to get takeout on the way from home, rather than on the way home from work, running counter to the suggestion that consumers need to be intercepted during the after-work drive home.

The takeout meal is a better value than eating out, consusmers said, with the average cost $9.94 for takeout compared with $15.49 for a sit-down meal. Balzer added that consumers are willing tro spend $10 for a meal, "but don't ask me to spend more than that."

The top food being brought home for dinner is pizza, though its frequency as the top choice is declining. A distant second is the burger, followed by chicken, Chinese/Asian, and Mexican; those in the trailing pack, however, are experiencing growth as a chosen takeout meal, except for chicken.

Summing up his preview, Balzer reiterated his analysis that the date indicates consumers still want to eat at home most times, takeout is a desirable option as long as the price is right.

Panelist Reynolds of Albertson's said the chain initially did not recognize the public's desire to eat at home. "When we first started Quick Fixin's, we thought we'd be grabbing them out of the restaurants," he said.

But the message from the FMI's research is that "there still is the desire to get involved in preparing meals, as well as buying already prepared meals," an allusion to his chain's decision to spread the Quick Fixin's program throughout the food departments beyound deli.

Brown & Cole president Ziels expressed some surprise at the data, but found it "in favor of us." At-home eating, he said, is apparently "more prominent than I Had thought."

He added that he interpreted the trend to mean that "Taste is not that important, but time is."

Ziels said that in Brown & Cole's attempts to get its 24 stores more in-line with the meals market, it is difficult to get the message to consumers that it is in the game for real. While operational components such as bagel sandwich station in a new store and several Chinese kitchens are exceeding expectations, his stores should also be reaching out with bag stuffers, a meals hot line and other devices to draw attention to their efforts.

For Albertson's, Reynolds said, "It is a matter of respositioning and repacking what we had in the store initally.

While the stores and product assortments will likely undergo more radical transformations eventually, he said, Albertson's opening gambit was to put the Quick Fixin's label on appropriate existing items from frozen dinners, to packaged salads, to value-added meat in the Butcher Block department.

Infusing the stores with a mentality geared to selling meal solutions is another matter, he said. "We can't do it overnight.

We are not even close to where we should be with the execution at the store level. It is not just personnel; it is how we deal with manufacturers. It is not just getting the lowest price."

The challenge is big as well for Dan's Super Market, a 10-store operator in Bismarck, N.D., that like most retailers is culturally biased toward buying rather than selling. Terry Rockstad, president and chief executive, said the resistance to change came into sharp relief once he hired and tried to integrate a food-service executive with his grocery management.

"The way we and she see it is way different," he admitted, and attempts to blend food-service sensibilities into his operation have been "just a nightmare."

His straightforward admission drew applause from the audience, many of whom were doubtless retail meals executives caught in the same nightmare.

Ziels of Brown & Cole said his company's, and by extension the industry's, inherent compartmentalization is a hindrance. "We have meat departments, produce departments and managers, but the consumer does not see it that way." He is deeply involved in trying to get employees to work as teams across departmental lines, and so far admittedly without much success.

Lucinda Ayers, vice president of global consumer foods for Campbell Soup Co., Camden, N.J., added that manufacturers also need to change their internal culture. "The meal itself is the product," she said.

"We must start thinking together about how to make that meal." Her own company's research indicates the industry needs to produce "customizable solutions" based on demographics, which she admitted is a huge task for a food maker with an international scope of operations.

When asked where the meals market is likely to lead the industry in the next five to 10 years, the panelists were reluctant to make predictions, but they agreed they believe HMR is not a fad.

"We have seen in focus groups that this is across all demographics," said Reynolds of Albertson's. Ziels said the demographic trends calling for ready-made meals are just as strong in North Dakota as in New York, Los Angeles or Dallas, while Reynolds said the trend is affecting Albertson's business from Florida to Seattle.

Ziels did suggest that if, in the next two to five years, the industry can develop more stores that successfully address consumer demands for meal solutions, then any incremental sales gained will not be from within the supermarket world but from food sellers outside the retail community. He also speculated that store design may head in two directions: one represented by a simple small format to encourage quick purchases of meals and one geared for more prolonged, stock-up shopping trips of 45 minutes or more.

Reynolds said that whatever directions the industry takes, the decisions governing that should not be made in boardrooms, but should be based on what consumers are telling the industry.