FMI KEYNOTER'S RECIPE FOR HMR SUCCESS: ALTER MINDSET

PHOENIX -- Retailers who gathered here in large numbers for the Washington-based Food Marketing Institute's MealSolutions show and conference were told to start thinking and acting more like restaurateurs if they want to succeed in the home meal replacement arena."Why can't a supermarket be more like a restaurant?" was the recurring theme that began with a kickoff session led by Ira Blumenthal, president

PHOENIX -- Retailers who gathered here in large numbers for the Washington-based Food Marketing Institute's MealSolutions show and conference were told to start thinking and acting more like restaurateurs if they want to succeed in the home meal replacement arena.

"Why can't a supermarket be more like a restaurant?" was the recurring theme that began with a kickoff session led by Ira Blumenthal, president of Co-Opportunities, Atlanta, a consulting and marketing firm that works primarily with the food-service industry.

Keynote speaker Blumenthal underscored the increasing competition posed by alternate formats -- such as restaurants and convenience stores and other alternate formats -- for the consumer's takeout food dollar and urged attendees to open their minds to seek ways to win over the consumer. He then moderated a panel that included representatives from each segment of the industry who offered tips drawn from their own experience.

Panel members included Phil Romano, consultant, who, along with Brinker International, Dallas, launched Eatzi's, the alternate-format combination of market and restaurant that has caught the consumer's fancy and the attention of the food industry.

Other panelists were Thomas Metzger, president of domestic operating company Roasters Corp., dba Kenny Rogers Roasters, Fort Lauderdale, Fla.; Mark Willes, vice president of retail sales for Tyson Foods, Springdale, Ark., and Peter "Greg" Gregerson Jr., president and chief executive officer of Gregerson's Food, Gadsden, Ala.

"The biggest challenge ahead for us is to change our mindset. We have to stop thinking like supermarketers. We have to pay more attention to consumers and who's currently supplying them with their meals," said Gregerson.

And Romano urged that retailers first do things to make themselves look different. He suggested that action and theater can go a long way toward inspiring the customer's confidence.

"Those 35 chefs we have are making a statement," Romano said, adding that their presence emphasizes to customers that most of the food at Eatzi's is made on the premises.

"I guarantee you that we wouldn't have the quarter million dollars a week in sales if we didn't have those chefs and have them so visible," Romano said.

"Grocery people think in terms of shelves and restaurant people think in terms of customers," Romano said. He emphasized that Eatzi's aim is to provide restaurant quality food to take home and that's what Blumenthal stressed several times that consumers are looking for.

"Our food costs the consumer less than it would in a restaurant, and a little more than it would in a supermarket. But with its quality and taste, they compare our prices to restaurant prices, not to those in supermarkets," Romano said.

Gregerson urged retailers to call upon the traditional food-service industry for help.

"If I put in a pharmacy, I wouldn't choose one of our grocery people to run it. Likewise, we can't expect traditional deli people to run a food-service program," Gregerson said. He added that the restaurant industry constantly keeps itself tuned into what the consumer wants.

Tyson's Willes emphasized the need for strategic alliances with suppliers in the quest to find the right way to give customers what they want.

"You have probably 140 suppliers. If you're using them just for product, you're missing the boat. You need to let them make solutions for you," Willes said. He added that one way to customize a retail food-service operation in order to distinguish itself from the competition is to work closely with suppliers.

In that regard, Blumenthal suggested that retailers get three or four key suppliers together for a mini roundtable discussion to work out what's needed to win over the consumer at each particular store site. Willes, like Blumenthal, also stressed that quality and taste and safely prepared foods are a given, but more is needed to win the consumer's confidence, such as investing in professional-looking signs and shedding such habits as reducing the price of a product when it's a day old rather than throwing it out.

"In supermarkets, day-old bread is reduced, other items are put on a bargain table. When was the last time you saw a day-old Big Mac offered at a reduced price?" Blumenthal asked.

Blumenthal also said that, from his observation, retailers are apt to stick a paper plate on the wall or the case that says "Pizza" rather than invest in attractive signs and other elements that would inspire confidence in the food offered.

"Think how many hamburgers McDonald's would not have sold if they had their menus on chalkboards and paper plates," he said.

On that note, Roaster's Metzger stressed that retailers need to commercialize their operations and suggested that a brand can help do that.

"Whether it's a restaurant brand or a proprietary brand, you have to establish credibility," Metzger said. He went on to suggest that retailers would do well to borrow some elements, like hospitality, from the restaurant business.

"If you walk into a restaurant five minutes before closing time, they feed you. They don't tell you they're closing," Metzger said. He compared that to a grocery store where customers are apt to find associates cleaning up ahead of time and making it obvious they're about to close up for the day.

On branding in the supermarket, Blumenthal, who was one of the founders of the Supreme Court, a pioneering effort to incorporate restaurant branded foods to eat on-site in supermarkets, was asked why the Supreme Court didn't work.

"That was when [six years ago] we all thought putting a restaurant in a supermarket would make it a destination," he said, pointing out that the industry has since found that what consumers want is restaurant-quality food to take home.

In his keynote address preceding the panel discussion, Blumenthal stressed that "it's a new battlefield today." The time-hungry consumers have changed and retailers need to figure out how they can help them put dinner on the table. He recounted the multitude of competitors who have the same goal.

Those competitors include restaurants that are recently focusing on takeout, convenience stores that are offering prepared foods, and even the business and industry segment.

"Are you aware, for example, that Ford Motor Co. in Detroit is offering its employees grab-and-go entrees to take home at the end of the day, or that Motorola in 27 of its plants has a department called Food Works that offers parbaked pizza and other grab-and-go items?" he asked.

Blumenthal also pointed to the statistic that 33% of convenience store traffic is during evening drive time, between four o'clock and six o'clock.

To get into the home meal replacement game or stay in it in the midst of formidable competition, Blumenthal suggested that retailers need to educate themselves, commercialize their operations, form strategic alliances with suppliers, build a business plan, and take the ideas they've gathered and figure out how to execute them.

On education, he said, "Just visits to other supermarket sites won't cut it. Maybe visits to back-of-the-house restaurant operations would, but do everything you can. Read magazines, go to conferences."

But most important for retailers is that they start "thinking out of the box." He added that, in order to think more like restaurateurs in their quest for solutions, retailers should think of the three Cs: the particular consumers in your area, the categories of food they'll need and the credibility needed to win them over."

From the retail side, Gregerson said he would add a fourth C: competition.

"I think it's crucial to differentiate yourself from the competition down the street," Gregerson said.

"But the point is that one solution doesn't work for everybody. You've got to find what's good for you. Take the puzzle pieces and put them together in a picture that's right for your hometown," he added.

In closing the opening session, Blumenthal stressed that retailers will probably leave the conference confused and with their heads full of questions.

"But that's a beginning. This is all new ground," he said.

In closing comments, FMI President Tim Hammonds emphasized the "new ground" when he pointed out that half of the exhibitors at the show had never exhibited before at an FMI show.