THE SUMMONING OF THE PARTS

ROSEANNE HARPER

News & Solutions Home Meal Replacement

As Boston Market spreads out across the country, supermarkets and food manufacturers alike have been waking up and smelling the chicken -- and the vegetables.

This awakening has many retail operators scrambling to pull together their own versions of home meal replacement, usually picking deli as the

site and home-style prepared foods as the foundation.

But as the HMR concept moves from the seminar podium and corporate planning room to the stores, retailers are grappling with a fundamental question: how best to source and merchandise the HMR bricks and mortar, which are the entrees and side dishes that make up a meal to go.

Deli executives and deli trendwatchers told SN that this is proving to be a critical factor in whether supermarkets can indeed sell customers a quality meal to take home, and still make enough money doing it.

Some of the sourcing options that have emerged are:

The do-it-yourself plan, which means making the products from scratch in-store, or in a central kitchen.

Sourcing the meals fresh, from a local caterer or a manufacturer.

Sourcing the food frozen from regional or national manufacturers, who have heretofore sold their products primarily to the traditional food-service industry.

Most retailers and trendwatchers interviewed by SN agreed that a roster of made-from-scratch items, produced in-store or at a central kitchen, combined with items brought in from outside either frozen or chilled, may be the way to go.

However, in the field, individual operators are experimenting with many different sourcing strategies, which is apparently part and parcel of this cutting-edge offshoot of supermarket prepared foods marketing.

Kash n' Karry Food Stores, Tampa, Fla., and Big V Supermarkets, Florida, N.Y., are among those operators that have launched in-store food production programs in the last year.

Meanwhile, Hannaford Bros., Scarborough, Maine, and Vons Cos., Arcadia, Calif., are two that have chosen a different path -- to bring in their meal components prepackaged from regional suppliers.

Still other retailers, including some of the companies seen as pioneers in in-store production, are supplementing their prepared foods menu with items from outside.

Cliff Smith, senior vice president of merchandising for the 91-unit Kash n' Karry, told SN that at his chain, "we think in-store production is the way for us. We're getting into this slowly, on a store-to-store basis. This way we can make sure we get things right before we do it on a larger scale."

The chain's new Chef's Creations program includes hot meals built around rotisserie entrees, as well as a chilled program. All food is prepared in-store and packed in-store. Big V Supermarkets, a 30-unit ShopRite chain supplied by cooperative wholesaler Wakefern Food Corp., Elizabeth, N.J., launched a program relying on in-store production this month at a single unit in Vail's Gate, N.Y.

The program's core is Oriental food. It features a team of Asian cooks who can be seen stir-frying entrees in an open production area.

Meat loaf, meatballs and other "home-cooking" entrees are also prepared in-store from scratch. Ten small wells in a hot table hold the entrees and sides at a low-profile deli service counter.

"The idea [of open production] is to make it clear to customers that this is freshly cooked product, and we make small batches so they're not sitting very long," said Nick Milillo, who developed the program for Big V. Milillo is president of N.J. Milillo Associates, a Norwalk, Conn.-based consulting firm, and a former executive at retailer Stew Leonard's, Norwalk.

Meanwhile, Wegmans Food Markets, Rochester, N.Y. -- well known for its Market Cafes, which offer a huge variety of ready-to-eat hot foods, and its creatively merchandised service delis -- is going to the outside to bolster its HMR-style menu of chilled, prepared entrees and sides for self-service.

Officials at the 55-unit chain declined to talk about the new program, but industry observers told SN that it features products in modified atmosphere packaging from regional suppliers.

A few supplemental products are sourced frozen and then thawed for presentation with the others in self-service cases that run as long as 60 linear feet, a local source familiar with Wegmans said.

After a test in a single unit in DeWitt, a suburb of Syracuse, N.Y., last fall, the chain rolled the program out to seven additional stores. The most recent installation is in a remodel in Onondaga, N.Y., and the program is on the board for a new store opening in Williamsport, Pa., this month, sources told SN.

Harris Teeter, Charlotte, N.C. -- another trendsetter, like Wegmans, in on-site production -- features in-store preparation of a large variety of meal components in selected stores. But the chain also has gone to the outside.

A variety of ethnic items is being produced for the company by regional manufacturers, one source said.

Officials at that 140-unit chain could not be reached for comment on their new direction in HMR sourcing. Observers, however, said Harris Teeter deems the supplemental route necessary, in order to offer adequate variety in all its stores. Hannaford Bros., Scarborough, Maine, launched a chilled meal components program last year in selected stores. Now it has rolled the products -- some sourced frozen and then thawed, some distributed chilled, in modified atmosphere packaging -- out to a about a third of its 148 stores, an industry source told SN.

A Hannaford unit in Richmond, Va., is displaying the items in a 16-foot case that has stair-step shelves. The foods are packed in black trays with a heat-sealed clear film on top. A stick-on label carries the Hannaford name.

Above the case, a sign asks, "What's for Dinner?"

Vons Cos., which launched whole meals in modified atmosphere packaging last year, is set to add separate components to the program next month, a source familiar with the chain told SN. The meals and the separate components are produced by a local manufacturer to the 327-unit Vons' specifications.

Officials at Hannaford Bros. and Vons could not be reached for comment.

Ukrop's Super Markets, Richmond, Va., declined to be interviewed by SN precisely because their program is so successful; other retailers and industry observers are swooping down on their stores in droves to try to see how it's done, they said.

It's apparently obvious to other retailers that there's a success story there.

"Ukrop's is our benchmark. We think they're doing a better job than anybody with their takeout, prepared foods," said Smith at Kash n' Karry.

Ukrop's opened a central kitchen in 1989, and now distributes its products to its stores each day.

In 1990 the company reportedly was cooking, chilling and packing 5,000 pounds of prepared foods a week for distribution to its 23 stores. Now the total per week tops 200,000 pounds, sources said.

An expansion of Ukrop's central kitchen is on the drawing board, chain officials said in a recent statement. Industry pundits say using a central kitchen can be a prudent decision for many reasons.

"A central kitchen has a lot of advantages. It gives you consistency, and an opportunity to make signature products. It also gives you economy of scale in purchasing and makes labor efficient," said Brian Salus, president of Salus & Associates, a Midlothian, Va., consulting firm, and former director of food-service at Ukrop's. While Kowalski's Markets, St. Paul, Minn., has hired chefs to develop meals and meal components, the three-unit retailer is actually making the products in its central kitchen.

"We can control quality with a central kitchen, and yet we have the flexibility to make changes in the menu pretty quickly," said Terri Bennis, director of deli at Kowalski's. "It helps us respond to customer requests. If people keep asking for Swedish meatballs, we can get them into the store that same week. You couldn't do that if you were getting the products from someone else."

In an ironic twist, Kowalski's has farmed out the production of its signature potato salad to a regional manufacturer in order to make room in its own kitchen for entree and side dish production.

Salus said the industry should expect "an increase this year in national manufacturers with regional plants, supplying supermarket delis with products in modified atmosphere packaging and traditional packages."

Other consultants to retailers and suppliers agree.

"A lot of regional manufacturers are being approached right now, even by leading-edge retailers," said Carin Solganik, vice president of Solganik & Associates, a Dayton, Ohio, consulting firm.

At the same time, some smaller retailers are going in the opposite direction.

"We're bringing more of our production in-house. It gives us the opportunity to set ourselves apart with products we create. People love our home-cooked products. They come in just for them," said Nancy Rand, deli director at eight-unit Quillin's, La Crosse, Wis.

Quillin's now makes 70% of its center-of-the-plate items and sides in-store. A year ago that figure stood at 30%.

"We had sourced most of them frozen. A lot of the frozen products are good quality, but everybody's getting them now. We were getting a shrimp and pasta salad that was good quality from outside, but we wanted to do something different. So we created a wild rice and seafood salad, and discontinued the other one. We even get a better margin on it, and the labor is minimal," Rand said.

Programs that blow both hot and cold are not necessarily a liability, said consultant Salus.

"Preparing hot foods in the store gives you some theater and the chilled products give you ready inventory. I think that combination -- and offering a variety of types of items such as appetizers, entrees, sides and desserts -- are major keys to success because you're appealing to the broadest market possible," said Salus.

"Everybody wants to talk in black and white, but there are no absolutes when it comes to sourcing. But I think each retailer has to decide what's best for his operation," he added.

One deli expert wondered why supermarkets aren't building their home meal replacement programs upon a foundation of the products they have now in their delis.

"There's a shortage of quality, prepacked products out there," responded Dan Giacoletto, national merchandising and promotions manager at Bongrain Cheese USA, New Holland, Pa.

"Manufacturers haven't done their job in presenting products to supermarket delis, but that shouldn't stop the delis from creating meals from what they've already got," said Giacoletto, who has more than 20 years experience in the industry and the restaurant business.

In line with that thinking, some retailers have decided they might as well beat Boston Market at its own game by putting a new focus on their existing rotisserie programs.

"We already do a good job with our rotisserie chickens, so we're going to add side dishes and offer meal deals," said Rand of Quillin's.

Rand said she'll source the sides for the rotisserie program frozen, but will add a signature barbecue sauce to lend Quillin's own touch to the program.

Even some of the bigger chains who have extensive prepared meals programs in place are paying new attention to their rotisserie programs, especially when faced with Boston Market coming into their areas.

Harris Teeter is adding chilled side dishes in pound containers, as part of an upgrading of its rotisserie chicken program. The sides will be merchandised right beside the chickens.

The chain is buying the sides already packed, never frozen, from a manufacturer with national distribution. So is another chain, Acme Markets, Malvern, Pa. "It's sort of like Boston Market, but better because vegetables held hot start to deteriorate. This way, you don't have to wait for them to be packed up, and they won't get overcooked in the microwave," an industry observer said.

Harris Teeter is currently testing the packed sides program with its rotisserie chicken in selected stores in Charleston, S.C., according to local sources. Acme, meanwhile, tested the program in 12 stores last summer and has since rolled it out to more than 40 of its 190 stores. More stores will get the program during the summer.

Other retailers are even getting creative with their rotisserie equipment, said Stephan Kouzomis, president of Entrepreneurial Consulting, Cincinnati.

"I've seen retailers steaming all kinds of center-of-the-plate items and vegetables in the baskets of the rotisserie," Kouzomis said.

He added that he expects to see more retailers seeking out local caterers to help supplement their fresh, chilled fare. "They could get the products fresh if they use local caterers and they can replenish their supply quickly, too."