MEALSOLUTIONS '97

JACK ROBERTIELLO

LOS ANGELES -- To hear fresh-meals executive Martin van Zwanenberg tell it, Marks & Spencer has found an ultimate meal solution.

Marks & Spencer's success is the envy of many in the fresh-meal business. In the last five years alone, the company's food sales have increased from $3.5 billion to nearly $4.5 billion, and the in-store return per square foot, per year on food has reached nearly $1,575.

More than 60% of the food sold in Marks & Spencer stores is fresh. The 286 company outlets in the United Kingdom account for more than 10% of all chicken sold there, and the company's most popular sandwich -- bacon, lettuce and tomato -- flies off the shelves at a pace of about 750,000 per week. Altogether, Marks & Spencer sells about 2.5 million sandwiches a week.

Most remarkably, the company stays out of the direct production business. "We do not prepare food in any of our stores; in our view this ensures safety, quality and consistent eating standards," said van Zwanenberg.

Every fresh item Marks & Spencer sells comes from outside producers, is placed on store shelves within 24 hours of manufacture, and must be sold within 48 hours. If not, the items are either sold at discount to employees, given to charities with the stipulation that they be eaten within 24 hours, or they are discarded. No Marks & Spencer food is ever discounted to consumers, van Zwanenberg said.

"Price is soon forgotten, quality long remembered," he said. "If you can supply value, the customer will continue to shop with you."

Speaking here at the FMI MealSolutions conference, van Zwanenberg, divisional director of food technology for London-based Marks & Spencer, revealed details about the company's widely envied success in manufacturing, marketing and merchandising fresh food.

Marks & Spencer, whose operations combine clothing, furnishings and food under one roof and sell only items manufactured under their private St. Michael's label, controls more than 50% of the chilled food business in the United Kingdom, said van Zwanenberg. The company has gained that massive share of the market through rigid control of ingredients, product design and manufacture, clean production facilities, and maintenance of the "sacred cold chain" that maintains peak quality during shelf life.

And while until now the company has resisted creating products in-store -- officials are currently mulling a move into hot food.

"All I can say at this point is, watch this space," van Zwanenberg said.

Van Zwanenberg said Marks & Spencer's business philosophy embraced a few simple principles: Do the common uncommonly well; provide well-known products of excellent quality in terms of safety and eating standards; keep the product simple; use the best raw materials (Marks and Spencer uses the same quality meat and vegetables for home-meal replacement that they sell at produce and meat counters); work in partnership with suppliers; and recognize that good sanitation and manufacturing procedures are fundamental.

Modern consumers are more knowledgeable, more discerning and more demanding about fresh food, he said, demanding quality, safety, choice, convenience and value, but not low price.

Three aspects drive the company's food business: quality of foods, quality of service and quality of relationships with the company's supply base.

Marks & Spencer never buys opportunistically, he said, instead relying on established suppliers with whom they have long-term relationships and who understand and share the company's principles. All St. Michael branded products are bought under contracts that spell out in detail the specifications for raw product components, production methods and final product standards. Most important is the creation of products in factories with stringent food-safety standards, he said.

"Clean food cannot be made in dirty factories," he said.

The company takes food safety so seriously that it took the lead in rounding up 1.55 million pounds (about $2.46 million) with 10 of its major suppliers to further animal health research, funding a chair at the University of Cambridge veterinary school. They hope the investment will give the company a leg up in the development of a scientific base to establish guidelines for animal health and food safety in the United Kingdom.

It should also further the company's already firm reputation with the public. While beef sales sunk dramatically after the mad cow disease scare last year, Marks & Spencer's sales have rebounded and surged past last year's point, van Zwanenberg said, although ground beef and burger sales have yet to rebound. He also acknowledged that the product scare was mishandled by virtually everyone involved.

Fundamental to the company's supply relationships is the dependability of the cold chain, he said. "A vital, perhaps sacred, part of our system of producing high-quality fresh food is an absolute dedication to this temperature regime."

Their cold chain ensures a 40-degree (Fahrenheit) temperature for all products at all times, he said, from just after manufacture to delivery to store level. The company has even developed a "plastic chicken," which mimics the behavior of a real chicken under refrigeration and is used to assess cooling consistency.

Van Zwanenberg illustrated the company's policies by describing steps taken in producing meat pies.

Meat used is never frozen. Marks & Spencer's suppliers use steer beef, which by UK definition is beef grown specifically for eating, and which is slaughtered at 18 months or younger. Cow beef is grown for milk production and is generally slaughtered at about five years of age, and yields a tougher, less flavorful, and cheaper meat, he said.

The company's manufacturers use specific cuts of 100% lean aged beef, dice the meat by hand, cook it in small batches, and top the final product with puff pastry that is folded and formed on custom-made machines that yield hundreds of pastry layers, characteristic of authentic French-style production.