Supermarkets are hot for a bigger chunk of the fresh meals market -- and not surprisingly, food producers are quickly lining up for the chance to help them capture the prize.
At venues such as this week's MealSolutions conference in Phoenix, convened by the Food Marketing Institute, the supermarket's meals supply pool is starting to coalesce.
But it's a motley collection, diverse enough to include both local cottage industry caterers and huge national companies.
The diversity goes beyond what type of suppliers they are, to what they're offering, in what formats, and how they're getting it to their customers.
The type and format of product ranges from those that are distributed frozen, in bulk or in preportioned packages, and then thawed at store level, to frequently delivered fresh, never-frozen product minus preservatives.
SN offers a view of this mosaic in the SN Meals Supplier Directory, starting on page 34. But this directory is, doubtless like the industry it attempts to identify, only a work in progress, and an embryonic one at that.
At present most supermarket deli/food-service departments are either making their own meal components fresh at the store level or in central kitchens, or they are sourcing them frozen from the outside and then thawing them at the store, according to industry experts interviewed by SN.
The evolution beyond that state will be rapid, they said.
"Change will come about soon. Some visionary will take the lead," said James Riesenburger, who was until last month the director of deli operations for the retail innovator Wegmans Food Markets, Rochester, N.Y., and now considering plying his trade as a consultant.
Tom Pierson, professor of food marketing at Michigan State University, East Lansing, Mich., has already seen evidence of change. "Even some of the retailers that led the way by creating in-house programs have become open to looking at what outside processors can offer," he said.
"This year, there's been an absolute explosion, a tremendous infusion of food-service elements in supermarkets, and manufacturers are responding," said Brian Salus, president of Salus & Associates, a Midlothian, Va. consulting firm, and former prepared executive with Ukrop's Super Markets, Richmond, Va. "There are things happening. I know of large companies creating new programs with component products."
"There are a lot of companies with products in development that are near introduction stage," said Marcia Schurer, president of Culinary Connections, a consulting and marketing firm in Boulder, Colo. "These are very exciting times."
Riesenburger's bet is that it will be a large national or European company that grabs the reigns -- "one with the resources to build two or three regional producing sites. I could see a joint venture between a European company and a U.S. company. Some of the technology could be imported," he said.
"I also think more regional companies will come to the fore," Riesenburger added.
In fact, regional manufacturers and local caterers have taken an early lead in many cases, by supplying fresh, never-frozen entrees and other meal components to nearby retailers. Some have increased their capacity and are linking up with local distributors to attempt just-in-time delivery.
"In general, it's been the smaller regional manufacturers that have moved forward faster just as it's been the smaller retail chains that have been the leaders," said Howard Solganik, president of Solganik & Associates, a Dayton, Ohio, consulting firm that works with supermarkets.
But now, Solganik is seeing large national manufacturers, who have been supplying the traditional food-service industry with frozen meal components all along, target supermarket deli/food-service departments with portion-controlled and bulk items.
The industry observers said it's been slower going with big companies, because internal bureaucracy tends to smother their flexibility.
"Manufacturers want to get into the business, but it's difficult, because they have to put a whole set of disciplines in place," Riesenburger said. "One of the reasons manufacturers of fresh-prepared foods in Europe succeed is that they have a commitment to the cold chain. They make sure there is no fluctuation in the product's temperature [from manufacturing site to display case in the retail store]."
It's going to require close work between manufacturers and retailers in order to present consumers with products they want to put on their tables, the experts agreed.
Meanwhile, innovations such as modified atmosphere packaging will keep changing the dynamic. MAP is gaining importance as a way to lengthen shelf life and preserve the product's quality and taste profile.
"Just this year, I've seen a number of food-service manufacturers on the West Coast come out with products in consumer-sized modified atmosphere packages," Schurer noted. "They're prepared entrees with a higher profile, a step up, with interesting ingredients. With MAP, they have the shelf life that can get them through the distribution system."
Shurer added that some retailers are probably sourcing vacuum-packed or MAP products in bulk for use in their service cases.
Others foresee large national companies erecting satellite manufacturing facilities in order to provide fresh product with just-in-time delivery within a limited area. The individual sites would function as some regional manufacturers are now -- delivering products in modified atmosphere packaging of some type.
"I think the fresh [never frozen] prepared category will grow," predicted Pierson. "I base that on consumer reaction to fresh, fully prepared foods, and I think if retailers want to end the diminishing of their share of the consumer's stomach, they've got to get into fresh, prepared foods."
At least one medium-sized frozen foods manufacturer, Celentano Bros., Verona, N.J., has introduced fresh, never frozen meal components in modified atmosphere packages.
Schurer, meanwhile, said she has seen some start-up companies heading in the opposite direction in order to expand their distribution universe. "They began a couple of years ago with fresh, never frozen product, but the demand wasn't great enough yet. So they began freezing product so they could increase their sales volume," she said.
In any event, there appears to be tremendous opportunity right now for manufacturers to give supermarkets top quality, interesting foods in a large variety -- and most importantly for retailers' needs, in single- or two-serving containers that are dual-ovenable.
"What I've seen most of is large packages," Schurer said. "People often don't want to buy that much. And what I do see looks as if it's been frozen, but that may be because it's put out frozen and I see it half thawed. Not very appealing.
"I see very little packaged product that looks fresh. There's such a wide opportunity for manufacturers. I can't imagine that it wouldn't be their highest priority in the development playing field."
Just about anybody who is producing food has an opportunity to enter the game, the experts agreed.
"Suppliers with commissaries that supply fresh foods to the airlines, for instance, could adapt their operations to also supply supermarkets," said Stephan Kouzomis, president, Entrepreneurial Consulting, Louisville, Ky.
"There's also a sprinkling of food-service distributors that will get into business with supermarkets, and some of the well-known restaurants can help supermarkets provide products consumers would buy," Kouzomis said.
Restaurant quality products are what consumers want to put on their tables, said Riesenburger.
"To compete in the [meals] category you have to have restaurant-quality product, offered at a lower price than it would be in a restaurant," Riesenburger explained. "And I'm frankly disappointed by what I see in a lot of supermarkets.
"What I saw on a recent trip to the Midwest was a paltry variety of half-frozen items in the case, and that's typical. This country lags far behind when it comes to fresh, prepared foods."
There's a particular lack of variety available to supermarkets from outside sources, the experts agreed.
In Schurer's opinion, variety is necessary to let consumers know you're in the meals business, but she said retailers are often limiting the supply of prepared foods they can get, putting strictures on manufacturers by demanding a long shelf life or a particular price point.
"If they say they want at least 28 days shelf life and it can't cost more than 'X' amount, the manufacturer will either say they can't do it or they'll supply a product that won't sell because it isn't appealing to the consumer. So it ends there."
Solganik added that if supermarkets demand exclusivity from manufacturers, that inhibits manufacturers' ability to make a profit.
On the other hand, it is imperative that retailers and manufacturers work closely together, as never before, in order to make fresh-prepared foods -- or even restaurant-quality frozen items -- work in the supermarket.
"It's absolutely critical for manufacturers to examine the supermarket's environment to see what they need. Until manufacturers take the lead, it won't work," said Dan Giacoletto, national merchandising and promotions manager at Bongrain Cheese USA, New Holland, Pa.
"Manufacturers need to work closely with the supermarket on product mix, display and training," he said. "On product mix, they can work out together what products need to be freshly made, and what ones can come in frozen. I've seen some products that blast freeze very well, but mashed potatoes maybe need to be made fresh. It can be a blend of frozen, product sourced fresh, and some made in-store," he added.