AEB 3300 AGRICULTURAL AND FOOD MARKETING

1
MARKETING FRESHNESS HOME MEAL REPLACEMENT
2
HOME MEAL REPLACEMENT BASICS

• HMR Defined by Technomics as ,
  meals away from home for immediate consumption at
  home during the dinner day of for special
  occasions
• The overall takeout food market in the US is
  expected to grow from 126 B in 1997 to
  in 2007
• HMR replacement accounts for of takeout
• The use of supermarkets as a source of meals
  eaten at home, but not prepared at home continues
  to fall from 20 in 2001 to 15 in 2005 (FIR
  2005)
• (Source FMI.org)

Fresh prepared or perceived freshly prepared
195 billion
20-25
3
SOLUTION SELLING MAKES SHOPPING EASIER

• Attempt to simplify the shopping experience by
  in the store to make a meal
• To bundle diverse items together
• What are the logistics of this practice???
• Special displays which house recipes and
  information
• The key is to make the shopping experience
• to keeping the customer in the store as
  long as possible

Bringing items together
Easier for the customer
Contrary
4
MEAL SOLUTIONS (contd)
Prepare meals at home

• 60 of consumers prefer to
• A true meal solution contains less and a
  amount of time for preparation and heating
• Idea is to promote the over individual
  elements
• Less focus on selling boxes of Minute Rice,
  chicken parts and Velveeta and more emphasis on
  selling a tasty chicken and rice dish featuring
  these ingredients

5 ingredients
Very limited
Final meal
5
FIVE PATHS TO MEAL SOLUTIONS

• Supermarkets prepare from scratch (kitchens,
  cooks, chefs)
• Lot of recent attention and often done wrong
• Store image is critical here for success
• Making meals quickly and easily from components
• Meals can be in-store or stores sell components

Making meals from scratch
Meal assembly from components
6
FIVE PATHS TO MEAL SOLUTIONS (contd)

• Meals prepared by outside vendors
• Store only stocks meals into ref. Cases
• Supermarkets and retailers together
• Walmart and MacDonalds
• Combining items in meal-friendly way

Case-ready meals
Meals through partnerships
Total store involvement in meal solutions
7
HMR NEW GENERATION OF CONSUMERS

• Consumers under 18 have grown up with the routine
  of eating out
• Used to go out for special occasions
• Now we eat out because
• Consumers still shop grocery stores an average of
  2.2 times per week ( )
• Pillsbury found in one study that 78 of
  consumers still prefer to eat breakfast and
  dinner at home, but not lunch
• Grocery stores would do well to take the approach
  that they are in the

We are hungry
Stores still have an opportunity
Meal business, not the grocery business
8
HRM IS IT TIME FOR A REALITY CHECK?

• The supermarket industry is eager to serve the
  HMR segment for at least 4 reasons
• Consumers lifestyles are (majority of women
  work outside the home)
• Total share of income spent on food AT HOME has
  from 10.7 in 1984 to 5.8 in 2005 (USDA
  ERS)
• 30 year spending on food away from home
• Need to compensate for sales and margin loss in
  consumables and non-foods due to
• (Source USDA)

Changing rapidly
declined
Growth
Mass merchandisers
9
SUPERMARKET ACTION PLANS REGARDING HMR
Small part

• Recognize that HMR is only a of the meals
  solution puzzle
• For example., case-ready chilled and frozen meals
  like the British have done
• Consider whether or not the store has the
  needed to effectively implement HMR (e.g.,
  Wegmans Harris Teeter and Ukrops)
• When implemented, HRM programs should be
  (e.g., Publix)
• Store design and operations must

Image
Selective geographically targeted
Complement HMR
10
SUPERMARKET ACTION PLANS REGARDING HMR (contd)

• Supermarket foodservice sales could grow from 8
  billion to 28 billion by the beginning of 2006
• new signs over the same departments
  featuring the same dried out rotisserie chicken
  wont work
• Retailers must constantly figure out how to
  for fresh-food quality, while building
  awareness and interest with abundant displays,
  achieving both the first and repeat sales
• Source 2004 FIR

Slapping
Exceed customer expectations
11
THE BEST DRIVE-THRUs in THE USA

• Chain
• Wendys
• Taco Bell
• Taco Johns
• When ranked by speed, order accuracy, menuboard
  appearance, and speaker clarity

Chic-fil-A
Krystal Burger
Source 2005 FIR