In the Past
People spent hours chopping, peeling, slicing, and preparing meals, appetizers, snacks, and desserts. When I was a kid, carrots grown from our own garden were a favorite snack. On occasion, a buttery chocolate scent would permeate the house – good old-fashioned chocolate chip cookies. Now THAT was really homemade (or even homegrown!) food.
Then manufacturers made products easier to make, with almost all the ingredients already set in a box. Cake mixes, Bisquick, Hamburger Helper, “Blue Box” mac and cheese, TV dinners, and frozen chicken nuggets. Fast food spread like hotcakes all over the US. People prepared these meals and still felt involved in the preparation process, adding their own touches to feel like they were feeding their families something good.
Convenience is now a key ingredient for premade meals. Burger King, for instance, reports seeing the highest sales in over a decade. Consumers want the convenience of fast food, eating out, or take out, but they also desire the quality of a “fresh-made” if not a “homemade” meal, particularly at supermarket prices.
Supermarkets are changing roles from providing foods or ingredients that consumers prepare to providing more types of meals that the retailer prepares. Supermarkets are going beyond deli sandwiches and pizzas into a wider variety of premade meals. Supermarkets are also finding similar expectations being placed on them as those being placed on fast food restaurants – consumers expect technological solutions so they don’t have to wait (in lines) in addition to high quality at low prices.
Also, waiting in lines is a pet peeve for many people, particularly at retailers, restaurants, and grocery stores. Burger King CEO Daniel Schwartz acknowledges that “There is an opportunity to improve speed and give customers a better drive-thru experience. There will be a whole lot to come for many years on that front.” Many also feel technology improvements are right around the corner. Even back in 2013, stores like Giant and Stop & Shop came out with SCAN-IT, a tool you use to scan items to do a self-checkout as you shop. Brian Fung of The Washington Post writes, “…while that certainly saves the people behind you from a long checkout experience, it still requires waiting behind all the other cretins who didn’t use the handheld scanners.” He goes on to say that technology should circumvent the lines and set up auto-pay solutions.
Finally, high quality at low prices is now a cost of entry. Gradually trends towards higher quality, better-for-you products came about with packaged foods giants turning towards more natural ingredients. Trends indicate consumers want healthier, better-for-you, higher quality products as well. Steve Hargreaves of CNN Money writes, “A number of major fast-food chains and food companies have recently announced healthier practices, moving to all-natural ingredients.” To capture their fair share, supermarkets will need to need to be perceived as having added convenience, variety, and healthier options. Low prices have resonated with consumers for years; much of Wal-Mart’s growth and success is driven by price.
The fresh prepared meals sector is expected to outpace restaurant growth in the supermarket channel, with gains of 6-7 percent annually through 2017, according to a 2014 research report from A.T. Kearney and Technomic. Delivering on high quality, fresh meal solutions that can be ordered and paid for ahead of time on a smartphone, providing a variety of meal solutions and nutrition labels, while incorporating a smart store layout (i.e., providing a place to sit and enjoy the meal) for shoppers’ convenience (and to generate sales) are critical steps towards supermarkets capitalizing on this trend.
Perhaps packaged goods manufacturers should strike deals with supermarkets to cook their products as part of these meal solutions (i.e., Today’s Special: Annie’s Mac & Cheese with fresh lobster meat). Maybe cookbook recipes can be resurrected (i.e., Today’s Special: Weight Watchers’ recipe for Spaghetti Pie)? For convenience, perhaps Skinny Cow ice cream bars can be sold single-serve style in this Supermarket Buffet. There’s opportunity for all kinds of products and manufacturers to capitalize on – they just need a different lens.
And how will retailers differentiate? What advantages can supermarkets tout to generate their fair share? Similar to the “in-store bakery” idea, is it an association with picking out fresh fruits, vegetables, and meats that has consumers turning to the “fresh foods” grocery store? Is it variety that wins? According to the “How to Create a Destination For Meal Solutions” article from CokeSolutions.com, Sarah Tabb, Brand Manager at Coca-Cola North America reports, “The biggest opportunity supermarket operators have to continue to capture a greater share in this category is to drive incremental sales from shoppers with improved merchandising that makes bundled meal purchases more convenient.”
So can you imagine the opportunities for research, with conjoint/optimal number and types of offerings, optimal layouts, etc.? Just some food for thought.