SOURCING KEY TO FRESH FOOD, ECR SEMINAR SPEAKER SAYS

DALLAS -- The key to successfully offering fresh, prepared foods in a supermarket is efficient sourcing, a challenge that can best be met by bringing in food that has been prepared off-site.That preparation can be done either by the retailer, in a central kitchen, or by outside suppliers, according to a seminar speaker at the recent Joint-Industry Conference on Efficient Consumer Response here."The

DALLAS -- The key to successfully offering fresh, prepared foods in a supermarket is efficient sourcing, a challenge that can best be met by bringing in food that has been prepared off-site.

That preparation can be done either by the retailer, in a central kitchen, or by outside suppliers, according to a seminar speaker at the recent Joint-Industry Conference on Efficient Consumer Response here.

"The growing demand for fresh prepared foods has largely been met, in general, by an expansion of in-store preparation, but managing that can be very difficult," said food consultant Howard Solganik, president of Solganik & Associates, Dayton, Ohio.

Solganik suggested blending some in-store preparation with sourcing outside the store in order to provide both "theater" and cost-effectiveness.

Food preparation outside the store can have many benefits, including improved sanitary control and increased productivity of labor, capital and floor space, he said.

"For instance, labor productivity outside the store can be three times higher on such operations as sandwich-making, and 10 times higher on mechanized procedures such as doughnut frying," Solganik said.

But national food companies have failed to take the lead in supplying fresh, prepared foods, possibly due to some of the challenges in distribution, he added. The small quantities, short shelf life and exacting specifications have kept manufacturers from concentrating on fresh prepared foods, he suggested.

He pointed, however, to two supermarket chains that have surmounted the difficulties of sourcing and have built their prepared foods programs successfully -- after years of commitment. The two chains, who asked not to be named, have many similarities, but they also differ.

Both are mid-sized, Mid-Atlantic region chains, that have been in the fresh prepared foods arena for about 15 years. Both have a "no preservatives" policy.

But Retailer A, in a more compact market, has its own central kitchen and bakery and its own transportation fleet. Retailer B has contracted with a number of manufacturers to supply fresh prepared foods, and uses third-party distribution.

Solganik said, "Without going into hard figures, both these retailers said they are pleased with the financial returns on their prepared foods programs. They are also happy with their ability to stand out from the competition."

Solganik found quality tops the priority list for both chains. Nothing gets in the way of delivering the best quality product to customers, he said, and it pays off.