SHOWING PROMISE

JACK ROBERTIELLO

WASHINGTON -- The Food Marketing Institute's MealSolutions conference, to be held in Los Angeles next week, promises food retailers both a wish list and a reality check on where they stand in the burgeoning meals category.

Since the inaugural conference last year in Phoenix, more and more retailers have stretched the supermarket definition of delis and in-store food service. Meanwhile, small meal-manufacturing companies are bringing more products to market, growing in significance, and -- in some cases -- being gobbled up by hungry mega-manufacturers. At the same time, the line separating food retailing and food service continues to blur.

As the meeting approached, SN talked with Timothy M. Hammonds, president of FMI here, about the show and the state of the meals industry.

SN: This show is only two years old, and already there's been a fairly explosive growth in interest and attendance. You're expecting nearly three times the attendance of last year's conference. Any particular reason for the attention this time?

HAMMONDS: I think that the focus of this show is the right focus. Last year we raised the issue of meal solutions as the primary growth path for the industry, but this year the focus is more on how do we do it. So if we were raising awareness last year, this year were focusing on how to make it work. It's drawing a lot of people who have thought about meal solutions and are really starting to implement it.

SN: And this growth is among both retailers and exhibitors?

HAMMONDS: Yes. If you take a look at the exhibition floor, it's almost twice as large as last year and it's sold out. We had a lot of potential exhibitors who came last year to look at the show, saying, "We're not sure the industry is serious about this, but we'll come and listen and see what happens." Well, virtually all of them were just overwhelmed by the response to the show last year, and have taken booths this year. It's a good illustration of the fact that we were raising awareness last year, and now people are saying, "Yes, the industry is serious. Now let's figure out how to make this work."

SN: At some of the meal-solution seminars and shows, some exhibitors are simply repackaging products or ideas using the meals-solution or home-meal replacement buzzwords, hoping that's all it will take. Do you have any indication that exhibitors will be using MealSolutions to bring new products to market?

HAMMONDS: Over half of our exhibitors in this show have not been exhibitors at any other FMI show. So what we've been successful in doing is bringing in people serving the food-service industry who are new to the supermarket business. So from that point of view, we're capturing the kind of people that the supermarket industry wouldn't find at a normal show. We're bringing the right kind of business partners together. Now you did find last year some of the traditional grocery exhibitors that were repackaging their traditional offerings and calling them meal solutions. Even some of the speakers last year pointed that out. So I think that this year, you're going to see even the traditional grocery manufacturer having a more innovative and serious approach to this.

SN: One of the complaints that has been commonly heard at meal gatherings and seminars has come from retailers who say they want new and innovative products, but that the large manufacturers are simply not providing them. The retailers say they have to go to small companies for what they want. Is this show the kind of thing that will spur the manufacturers on, once they take a look at the level of interest and seriousness?

HAMMONDS: I think so. We saw that happening last year, and we've converted many of the lookers to exhibitors this year. I think this is the show where they begin to see how serious the industry is about this category, begin to meet some of those people with new job titles -- like vice president of meal solutions -- as we're seeing senior management people being put in oversight positions of this new function. It's a great place for manufacturers to see what kind of competition is out there and how the industry is really serious about making this work.

SN: What have you heard from the retailers about their main interest in this show? HAMMONDS: Seminars and workshops, certainly. These are great places for people to begin to look not just at the products, but also at the implementation of them at the store level. One of the things we're adding to help that, which has worked very well at our other shows, is the idea exchange breakfast format, where people can just get together informally -- retailers and wholesalers -- and talk to each other, share ideas and experiences. That has worked very well at our MarkeTechnics show, we did it very successfully at the convention this year, even with a large audience. The opportunity to do informal sharing is, I think, as important as what people see in the formal program.

SN: By looking at the outline of the sessions, it's evident there's a significant emphasis on food safety at the conference. Why so much at this show?

HAMMONDS: This is a more fragile product that requires more care than the products we're typically used to selling in the supermarket. You're selling a product now that may be eaten without being cooked in the home, so you just have to be much more careful than if you're selling a packaged product that you know is going to be taken home and cooked. So we feel food safety is an essential part of the meal-solution offerings in supermarkets. We've done two very interesting things here. We've combined our food protection conference with this show so that food-safety professionals will be here and able to ask questions and talk with the senior operations people. The other thing that's new this year is that we've combined our consumer affairs conference here, so the consumer affairs professionals will be here with their own program, but will also interact with senior operations people on what we're hearing from consumers and what real shoppers are looking for in the store today.

SN: Is the industry paying enough attention to consumer input, specifically at this show, but also in the home-meal replacement area in general? If you're a shopper who visits a store with a wonderful meal program and then go back to your own store, you can become confused about what supermarkets are doing.

HAMMONDS: Combining our consumers affairs conference with this will go a long way, I think, towards helping our operations people understand and address these kinds of issues. But also I think the customer will get more sophisticated over time. After all, we already have very minimal service, price-oriented supermarkets and very upscale gourmet markets, and that doesn't confuse shoppers. So I think they'll begin to learn what each store operator has targeted as their version of meal solutions, and they'll sort that out pretty quickly over time. Not everybody has to do everything, or is capable of doing what the cutting edge people are doing today.

But I think that's one of the things you'll see at this show. There are lots of ways to do meals, from preparing fresh product right at the store, to buying manufactured product that can be simply reportioned or reheated in the store with minimal actual on-site preparation, but that still looks to be a very nice product from the consumer's point of view.

SN: Is consumer education important about the ready-to-heat category, where some consumers still may think these items are defrosted frozen rather than fresh?

HAMMONDS: My personal view is that this whole category requires us to do a better job of training employees to be real salespeople and not just shelf-stockers. It's a great opportunity, even if the store is selling something the consumer is going to heat in the home, to have that product ready to eat in the store and to some taste sampling right there. When the consumer is looking at the product, [samplers could say,] "Wouldn't you like to taste this? See how easy it is to prepare a great tasting meal in the home?" Get them engaged with the product and really do some aggressive selling and merchandising. That is an area where the traditional food-service industry is ahead of the grocery industry at this time, but I think we can catch up pretty quickly there.

SN: Do you expect many food-service industry attendees, as either observers or participants?

HAMMONDS: As observers and exhibitors. Sysco, for example, is going to be an exhibitor this year, whereas they were not last year. We're clearly going to get a growing group of food-service people here. Last year, we had one of the airline caterers that exhibited and is doing business with supermarkets as a result. So I suspect we'll get people who have never thought of the grocery industry seriously before, who -- because of the attention we bring with this show -- made the decision to be there.

SN: What's been the most significant industry advance in meal solutions in the last year?

HAMMONDS: There's been so much experimentation going on, I don't know how I would pick any one thing. We've had a number of operators who have found they could bring branded food-service departments into the store and do very well with them. We've had operators who have discovered there are a lot of manufactured products that are prepared in restaurants by simply microwaving or warming them up, without having a real chef in the kitchen, and the person in the sit-down restaurant thinks that's a perfectly acceptable restaurant meal. Those kinds of products can go right into the supermarket. There's been a realization that there are a lot of good manufactured products out there that can be presented to the consumer and appear to be prepared right in the store, so that not everything has to be done by a chef in the store. Through branded departments or merchandise, there's a lot of good name-recognition tie-ins that can bring some excitement to the store as well.

SN: What are the areas where supermarkets need the most improvement in meals?

HAMMONDS: There are a lot of areas where we need some good controls and employee training as well. Clearly, food safety is an important employee training area. The whole issue of portion control is one supermarkets need to address. We're now beginning to package whole meals and sell them by portion, whereas we're used to selling packaged UPC-coded product, or product packaged by the pound. So if you're in a deli and the consumer wants a little more cheese, it's not a problem since the deli associate will weigh and sell it by the pound. But as you begin to sell and price by the portion, you do need tight discipline on portion control in the store. That's one of the things we need to learn from the food-service industry.

SN: The seminar schedule lists a number of people from supermarket companies that tend to be quiet in public about their businesses. Was it difficult to convince them to speak at the conference, or are companies more willing to talk about their successes now?

HAMMONDS: One of the points I made on the platform at last year's conference was that in this area, you need to be thinking of your competitors as potential allies. The reason for that is its important for customers to begin to think of supermarkets as a serious source for meal solutions they are going to eat in the home. From that point of view, it's an advantage to everybody if supermarkets across the whole spectrum of the marketplace do a good job in this area. So I think a certain amount of sharing to help your competitors at least get started in this is going to help customers look at us as a serious alternative to restaurants and fast-food outlets. This is a case where the rising tide is going to lift all the boats. You don't have to share everything you do, obviously; there are particular approaches that one company will take that another might not. But helping everybody to at least get in the game here is going to be very important in changing the consumers' image of where they get their carry-out food.