472 Armour Circle • Atlanta, GA 30324 • 404-888-9951 • Fax: 404-888-0925
HOME MEAL REPLACEMENT: PART II
By Harold L. Ritchie
Ritchie International, Branded Resource Group
An Atlanta Based Hospitality Firm
404-888-9951
If you thought branding was big, you haven't seen home-meal replacement. This
rapidly growing phenomenon, driven by the twin consumer demands of convenience and quality, promises to have as big an impact on the foodservice industry in the next decade as branding did in the last.
Home-meal replacement (HMR) represents a gold mine of sales potential for foodservice operators in all segments, from c-stores to full-service restaurants. In fact, the potential size of the home-meal replacement opportunity is huge--analysts estimate the size at between $80 billion up to $150 billion, depending on how you define it. That creates a lot of room for a lot of different operations--QSRs, on-site feeders, casual theme restaurants, white-tablecloth restaurants, hotels, supermarkets, and HMR hybrid specialists--all vying for their share of a business that could reach a maximum potential of $500 billion to the year 2000.
"I think home-meal replacement is definitely going to be where it's at for a lot of operators," says Allen Susser, chef-owner of Chef Allen's in Miami Beach, an upscale, "New World Cuisine" restaurant which makes its entire menu available for take-out.
Later this spring, Susser will up the ante significantly when he starts selling a modified menu through a well-known local gourmet market. "It gives customers an opportunity to eat casually and in their own environment, but still have the quality of food they demand."
What is HMR, and how does it differ from take-out? The operative word is "home"--home-meal replacement means home-cooked quality, for at-home consumption, but it doesn't have to be cooked at home. Pizza and Chinese food, the two prototypical "take-outs," are not generally prepared in most American home kitchens. But items like roast chicken, meat loaf, or turkey (the prototypical home-meal replacement foods) often are. In home-meal replacement, these nutritious, popular, feel-good foods are now becoming available through a variety of foodservice venues; they're the kind of foods mom or dad want to serve their families, even if they no longer have the time or the inclination to actually do the cooking.
"Home-meal replacement means anything that's a replacement for scratch, home-prepared foods, from parts of meals, like salads or desserts, to complete meals," says Richard Anskalnis, executive vice president of Nation's Pizza Products, Schaumberg, Ill. Nation's Pizza Products supplies premade, frozen pies and components to supermarkets, restaurants chains, schools, and other customers.
Through a joint-venture partnership with OSI Industries, the company also produces and markets a variety of other foods, including pot roast, chicken, beef stew, and other home-meal replacements. "What differentiates home-meal replacement from ordinary take-out is that HMR generally requires some sort of `further processing,' such as reheating or finishing, at home. And home-meal replacement also addresses consumer demand for healthier alternatives."
"Alternatives" are what it's all about when it comes to success in the home-meal replacement game. Dedicated HMR "hybrids," like 7-Eleven's Deli Central or Eatzi's, have hit the nail on the head. Eatzi's, the oft-cited leader in the brave new world of home-meal replacement, offers everything a busy consumer could desire in the way of alternatives. In fact, the prototype take-out/market/restaurant operation in Dallas is touted as a "meal solution center." The selection runs the gamut, offering a rotating choice of more than 1,500 chef-made prepared foods; a full line of produce; an on-premise bakery; deli, meat, and seafood cases; a grill; and a large variety of gourmet groceries. Customers can pick up a full meal or an appetizer, choosing from a wide array of choices, from Mexican to Italian, South American to all-American; two-thirds of sales are in prepared items, whether meal components or full meals. The formula seems to be working: In 1996, sales were running at a whopping $250,000 a week.
"We've stumbled onto a live current here," says Lane Cardwell, who heads up the
Eatzi's initiative for parent company Brinker International. "This is what the public wanted and needed, even if they couldn't have articulated that need. We're providing convenient, restaurant-quality food for off-premise consumption, available at everyday prices." The company is scouring the country for a second site, which it hopes will be open by the summer. Meanwhile, the rest of the industry is watching. The success of Eatzi's points up another important fact about the HMR marketplace: It's a phenomenon that cuts across virtually all segment boundaries. While quick-service restaurants (QSRs) still capture the lion's share of take-out, the field is wide open to any operation that can meet consumer demand for nutritious, high-quality home-meal replacements.
Supermarkets, for one, have not failed to notice the potential. In fact, while the challenges to compete with restaurants on their own turf are great, supermarkets have moved aggressively into the area of home-meal replacement, now representing the third-largest venue for HMR. In fact, more than 90% of all supermarkets now offer take-out meals of some kind, via outlets as varied as in-store delis to food courts to sit-down restaurants.
Edina, Minn.-based Byerly's, with 13 upmarket stores in operation, has established itself as a headliner in the field. Through co-branding and various other joint ventures, the company has allied itself with such high-profile restaurant names as Wolfgang Puck, Charlie Trotter, and Leann Chin. Its flagship Chicago stores feature
food courts and serveries dispensing high-quality prepared foods for both on- and off-premise consumption, including Wolfgang Puck Express and the Asia Grill. "We could introduce our own brands, but that would mean having to test them and having to start from scratch marketing them," notes Marylou Long, director of deli operations for the chain. "With these partnerships, we're able to bring something new and unique to the table, with higher perceived quality and recognition than we can provide."
But these efforts aren't Byerly's only forays into the booming field of home-meal replacement. Other HMR options include freestanding salad bars with soup wells, full-service delis dispensing a wide variety of prepared entrees and salads, frozen soups and entrees, and specialty concepts like sushi. "We're trying to give our customers another option for the age-old question, `What's for dinner?'," notes Long. "Foodservice is absolutely growing area for us, and by ``foodservice' we mean anything perishable, from fully prepared entrees to value-added, ready-to-cook meats." Fully prepared items are extremely high-quality, and might run the gamut from typical side-order fare such as potato salad to such upscale entrees as mango-salsa salmon and penne with sun-dried tomatoes. Most items are prepared on-site, but there is a central facility for high-volume items like salads and Byerly's frozen soups and entrees.
"We believe home-meal replacement is going to continue to grow," adds Long. "Consumers are more and more strapped for time. There's a real `time famine,' out
there, and consumers want restaurant-quality food combined with convenience. By bridging the gap between supermarkets and restaurants, we see a great future for Byerly's in home-meal replacement."
Operators in all segments of foodservice are stretching the envelope as they move to satisfy customer demand for high-quality take-out. In doing so, they are truly blurring the lines between commercial and noncommercial segments, and between food-at-home and food-away-from home. For example, Claim Jumper, a small casual-restaurant chain based in Southern California, has begun selling a number of its signature products in frozen form via supermarkets.
The program, aimed squarely at the home-meal replacement marketplace, kicked off last year with five frozen items--including its famous baby back ribs--and a bottled barbecue sauce. This year, the company is rolling out four new bottled sauces and 10 additional frozen products, including two variations of lasagna and dessert items. These are sold as multi-portion meal components meant to feed three to five people.
Ketchum Grill, a casual American bistro that specializes in such trendy favorites as pastas, boutique pizza, and wood-grilled items, counts 5-10 percent of its sales from take-out. Located in the resort community of Ketchum, Idaho, Ketchum Grill has a devoted local following that doesn't always want to fight busy ski-season crowds to enjoy chef Scott Mason's food, so Mason started offering take-out when his business
started taking off. "My customer base for take-out is mostly locals or people who have second homes here," explains Mason. "They don't want to fight the wintertime crowds, but they want what we prepare. I'll see them again in the dining room in the summer." Ketchum Grill's take-out business sprang up almost by accident when regulars started asking if they could come in and purchase dinner to go.
"It's not a huge part of the business, but it keeps my good customers happy," says Mason, "and the impact on the operation is minimal." Hosts, in fact, have been trained to suggest a to-go meal in lieu of a long wait for a table. The other nice thing about the home-meal program is that it's often busiest early in the evening, when people are on their way home. And in effect, this adds an earlier "turn."
Take-out may not be a significant part of the operation, but that doesn't prevent Mason from giving it the same attention to detail he bestows on dine-in business. In fact, because he hates serving his food on paper and plastic, he prowls local thrift shops in search of charmingly mismatched china and pottery, which he sends home with his take-out customers. "I figured it out, and even if they don't return the china, it doesn't cost me much more than good-quality plastic would," says Mason. "And people really prefer it. Most of the time, the stuff finds its way back here eventually anyway."
While many on-site feeders met with limited success selling meals-to-go earlier in the decade, the segment is circling around for another look now that the category is maturing. At the University of Delaware, with campuses in Wilmington and Newark,
foodservice operator ARAMARK is looking at a variety of means to provide home-meal replacements to both students and staff and faculty. These programs exist at virtually every level, according to spokesperson Colleen Tarry, for both cash ops and the board plan. For instance, board-plan students can use their swipe cards to purchase preboxed meals at the new Russell Express in Russell Dining Hall, which offers the same selection of hot meals served across the line every day. The service is "pretty popular," according to Tarry, accounting for about 230 lunches and 125 dinners a day. "The meals are hot and ready to go, so the students can get in and out in two minutes."
Cash locations also offer a variety of HMR options. Campus c-stores now carry a variety of prepared foods, including sandwiches, salads, and single-portion entrees like lasagna. Customers can purchase everything from components to full meals, and can use their flex plans to pay for it.
At the new Trabant University Center, a food court with 12 different concepts includes the Star Spangled Cafe, which addresses the needs of home-meal replacement with a Boston Market-style menu of non-fast-food options, such as meat loaf and turkey platters and fresh side dishes, with more hot wells planned for even more variety. Another food court in an older student center features Leghorn's, ARAMARK's oven-roasted chicken brand.
According to Tarry, such concepts appeal to students as well as staff and faculty, who are even better targets for home-meal replacement since they have kitchens and families to go home to. Future plans include a bakery, a commissary kitchen to supply the school's c-stores and fleet of carts with additional HMR-ready meals, and upgraded delivery programs.
"We're addressing home-meal replacement in a variety of different areas," she notes. "But we believe that's where a lot of the growth is going to be in the very near term."
1999 Ritchie International. All Rights Reserved.