DALLAS -- The founder of Boston Chicken said the quintessential home-meal replacement format could be an "absolute winner" inside a supermarket, but only if consumers could get to it easily -- and that condition is far from a given in most grocers' stores.
"If you're not convenient, then you're not in HMR, no matter what kind of food you serve," said George A. Naddaff, former chairman and chief executive of Boston Chicken, the man who says he coined the term "home-meal replacement," and who many consider HMR's most prominent pioneer.
Naddaff offered slices of his food-service marketing wisdom, with telling anecdotes from his own varied and successful career, to a diverse audience that included supermarket and food-service operators and their suppliers who attended the HMR Summit here last week. No longer affiliated with the giant HMR chain, and now chairman of another headline-making chicken format, New York City's Ranch 1, Naddaff said he'd once politely turned down an offer to incorporate Boston Chicken into the natural supermarket chain, Fresh Fields. His stated reason for demurring: Fresh Fields founder Leo Kahn wanted him to use free-range birds -- but he still believed that the concept of a Boston Chicken inside a supermarket "is an absolute winner, providing there's access from outside."
Naddaff's point? For supermarkets or anyone else chasing HMR sales, the key is convenience, and by his measure, that means completing the transaction in about a minute and a half -- or don't bother.
"You supermarket people," he asked rhetorically, "why don't people find going to supermarkets as easy as going to Boston Market?" It's because, he said, many of the stores are in locations that take them out of their way, to or from work; because they have to park in a big parking lot and walk a distance just to get to the door; because they have to find the HMR items, go to the cash register, and wait. "It's not simple, and it's not taking a minute and a half," he said of the supermarket HMR experience.
He suggested designing a supermarket like a circle, with a perimeter made up of storefronts that represent different HMR programs, that HMR customers could park within 30 feet of and enter from the outside.
That's a theoretical model born of decades of trying to find and expand food-service formats offering such convenience, and were simple enough to duplicate many times. Naddaff recounted the milestones of his professional journey as a way to illustrate his philosophy, starting from his youth as a peddler of baby carriages, sneaking behind row houses to find the diapers on the clotheslines, thus efficiently targeting the right doorbells to push.
Naddaff said he'd been in the take-home food business since 1967, when he got involved in the growth of the Kentucky Fried Chicken chain. HMR, he said, is "a system, a procedure," and not just a product. "KFC taught me how to do it," he said. "When I put up the first unit in 1967, it was a 1,500-square-foot building, with no seats. All the business was take-home. Is that HMR? We've been living with these things a long time."
The driver, then and now, is working women, he noted. It was a phenomenon brought home to him when he was active in the development and expansion of a chain of child-care centers in Massachusetts. Each afternoon, he'd see a swift parade of mothers in a mad rush to scoop up their children, and then dash home to make dinner. "They would have been happy if I could have set up a system where they could drive up and I could throw the kid [through] the car window so that they wouldn't have to stop," he said.
Instead of trying that, Naddaff used cooks on staff at the day-care centers to prepare full meals. He passed out weekly menus and had the meals made and chilled in a big refrigerator bin at the entrance -- and could barely keep up with demand. "I was serving something they needed, right then and there," he said.
"Given a good product, you have to have the convenience," he repeated, and he refined the definition of convenience to include being on the right side of the street -- on the way home from work if you're selling meals, or on the way to work if you're selling coffee and breakfast items.
Naddaff also recounted his serendipitous discovery of the format that he blew up into the quintessential HMR success story. One night, his wife told him she wanted him to bring home chicken, but not fried; rather, a rotisserie chicken from an outlet near his office that he wasn't even aware of. When he found it, on a side street, customers were lined up outside the door. "It was a huge line," he remembered. "It had great smells, great theater, loads of people taking home the entire meal in a bag."
He pursued the owners for nine months before they agreed to sell him the worldwide rights and, as founding chairman, he led the company from one unit to 43 stores."It was a very simple concept," he said. "It had no seats, it was all take-out, the customers were served in a minute and a half." The store, he said, was doing "a million-four" in sales, tucked away on a side street, and thus the opportunity was ripe for additional units in convenient locations. "Before I built more, I decided to find out who all these customers were," he said. Focus-group research revealed that Boston Chicken's customers felt they were buying meals they otherwise would be cooking at home -- thus his coinage, "home-meal replacement." He expanded into more units with a focus on providing whole meals, adding pot pies to the menu.
"The last one we opened had 17 seats," Naddaff recalled. "It was still take-out. It was a concept that was simple, and it was easy to train the managers."
However, things changed when the company was acquired by a group of ex-Blockbuster Video executives, and Naddaff said the changes diluted the format's power, and ultimately hurt the company. The start was the name change to Boston Market; he would have chosen Boston Kitchen, he said. They then began building more expensive stores to provide greater variety and house more complex operations, but, he said, sales didn't grow enough to support the greater expense and complexity. He added that he "would like to see them go back to smaller stores that are easy for managers to run. I'm confident they'll get back on course."
Meanwhile, Naddaff is at the head of a venture-capital firm, Business Capital Expansion Corporation, Newton, Mass., that searches out other food formats that are ripe for expansion. He said he currently has "about 12 projects going, including Ranch 1, of which he is chairman and CEO. It's a chain of about 20 units in Manhattan, specializing in gourmet-style grilled-chicken sandwiches and fast service. He's also involved in the expansion of the Silver Diner format, a retro-diner that's now exploring the take-out market. "The world is flipping over HMR," said Naddaff. "It all happened because women went to work. People don't have time to do the shopping."