WEB-DELIVERY EXPANSIONS NOURISHING FRESH MEALS

ROBERT VOSBURGH / Additional reporting: MINA WILLIAMS

FOSTER CITY, Calif. -- Webvan Group is rolling into new marketing areas, highlighting its fresh-meals menu for maximum effect upon arrival, according to company officials. Back-to-back openings in Atlanta and Chicago include the immediate availability of prepared foods.

And it is not the only one. Competing formats like PDQuick, Camarillo, Calif. (formerly Pink Dot), are revamping their own menus as fresh meals and other prepared items increasingly take the spotlight in the race to be No. 1 among Web-based home-delivery services.

"Prepared foods is an integral part of our total offering," said Mark San Fratello, director of marketing. "Prepared foods have a particular value to people who use our service because they are expressly designed for time-starved consumers who are looking for maximum convenience."

The prepared-foods program centers on signature items prepared by the company's own chefs at a central kitchen located on-site at the operator's distribution center. Selections are blast chilled and put into stock for selection later on when customer orders are filled.

Prior to opening, Webvan constructed distribution centers, which include a production kitchen for the fresh meals. In Atlanta, the facility is located in Suwanee, Ga.; for the Chicago operation it's in Carol Stream, Ill. The large DCs measure approximately 360,000 square feet, with enough space in the total footprint to accommodate expansion should the business grow. At its present size, the Chicago warehouse will be able to service an Illinois market area as far north as Waukegan, as far south as Tinley Park and as far west as St. Charles, according to officials.

PDQuick is in the process of arranging sites for its own fulfillment centers, which cost about $500,000 apiece, according to reports from industry observers.

Like PDQuick, Webvan has offered prepared foods pretty much from the start, saying it believes the items to be one of the company's differentiating factors in the marathon for market penetration and domination. The prepared-foods program kicked off in Webvan's inaugural San Francisco market area close to a year ago; Atlanta and Chicagoland are the second and third markets Webvan has entered, respectively, bringing the prepared-foods program with it.

"We have our own chefs on-site who develop the recipes and prepare the meals," said David Fricano, vice president of food production for Webvan-Atlanta. "Everyday, our team will be busy concocting a broad selection of meals for the home or office. Customers simply point and click, and the meals are delivered."

"Prepared foods have surpassed our expectations," added San Fratello. As the company enters new marketplaces and folds out operations, prepared foods will be added as soon as possible. According to officials, plans are under way for moves into the Seattle, Baltimore and northern New Jersey markets over the next few months, with projections for a total of 15 markets by 2001.

The current Webvan menu is comprised of some 50 prepared items such as ready-to-heat entrees, soups, salads, side dishes and party platters, ranging from sushi to meatloaf. Sushi in particular has been a hot category, said San Fratello.

Specific items include: Chili, selling for $9.50 per quart; Herb-Roasted Chicken, priced at $4.95 per half; Rosemary Roasted Potatoes, offered at $4.75 per quart; Country Fried Chicken, selling for $5.50 per half-bird; and Baked Salmon with Fresh Herbs and Lemon, priced at $7 for a 6-ounce, a la carte portion. Other favorites such as BBQ Meatloaf, Lasagna Bolognese, Chinese Chicken Salad with Peanut Sauce, Chicken Pot Pie and soups are also included in the prepared-foods offerings.

At PDQuick, officials have shuffled management and are in the process of updating the company's offerings after announcing its own agenda of national expansion. PDQuick is also hoping to grow coast to coast, following several highly successful years in the southern California market delivering fresh gourmet sandwiches, salads and baked goods, among other items, via its Web site and an 800 number. The company is beefing up its own menu and adding additional favorites like fried chicken and pizza in anticipation of entering San Francisco, San Diego, Baltimore, Washington and Phoenix.

Besides providing for individual homes and offices, children and local businesses are in the sights of these operators. Both companies plan to promote their fresh-food deliveries to businesses. To promote this side of the company, Webvan is establishing a Webvan@work area to its Web site, while PDQuick is establishing credit lines for corporate accounts.