Slowly but surely, some manufacturers with high brand visibility are intensifying their focus on the fresh meals market.
While some supermarket observers say that store-produced meal items allow retailers the advantage of freshness and quicker responsiveness to consumer trends, there's no denying the power that companies with superior national brand equity, notably Tyson, Sara Lee, Oscar Mayer and Perdue, wield to penetrate markets and command shelf space.
While some of their best known items are grab-and-go lunches and fully cooked center-of-the-plate offerings, rather than complete meals, the manufacturers are closing in on a meals strategy by diversifying their lines and creating cross-corporate alliances in co-branding promotions and merchandising efforts.
"We believe home-meal replacement is a process, not a product," said John Lee, vice president and general manager of retail sales and marketing, Tyson Foods, Springdale, Ark. "It's important to make that distinction if the category is going to get off the ground. Consumers want to have a choice, and just pulling together a bunch of products in a meals center won't do it."
Similarly, said Kathleen Horner, vice president of marketing for the Hillshire Farms Cincinnati-based division of Sara Lee Corp., Chicago, manufacturers need to lead consumers and retailers to a new way of shopping.
"[HMR] is a long process, not an event," she said. "Consumers need to be re-educated that a supermarket is not just a place where they can find 13 aisles of unrelated ingredients, but rather, a place where they can find the answers as to what to serve for dinner and get it on the table in 15 minutes."
While retailers have been leading manufacturers in the creation and marketing of HMR meals and components, their success has attracted corporate attention, said meals consultant Howard Solganik, president of Solganik & Associates, Dayton, Ohio.
"It's very early in the industry's creation of these items. You'll see more and more products coming on line by the national people, but it's still a niche market to some extent," he said.
Recently, the segment has seen an accelerated level of activity. Tyson purchased Mallard's, Modesto, Calif., a supplier to Tyson's Gourmet Selection line of chicken, pasta and sauces and creator of its own lines of pastas, sauces and meals.
It's the first in what Solganik and others think would be a logical step for some slow-moving companies looking to get into the meals arena.
"I don't think the big companies are going to do it on their own," said Solganik. With small regional companies, such as Celentano, Verona, N.J.; Deluca, Middlebury, Conn.; and others creating innovative meal programs, it's only a matter of time before the national companies swoop down, he said.
"The amount of original thought at large corporations is somewhat limited, and the amount of risk taking allowed is very little. That makes innovation very difficult."
But some of these companies are trying, using their brands as levers to get both consumers and retailers interested in their new products.
Tyson, for instance, in addition to acquiring Mallard's and its dual-serve meals, is about to roll out additional products in its own single-serve Gourmet Selections line -- center-of-the-plate items with sides of potatoes or rice developed in co-branding agreements with Uncle Ben's rice and Ore-Ida potatoes.
At the same time, Sara Lee has been expanding its own universe of center-of-the-plate items through its brand and that of such subsidiaries as Hillshire Farms.
Hillshire Farms has an existing co-branding agreement with Fresh Express for a line of packaged salads with meat that has returned to the drawing board, said Horner, but the category is still viewed as viable, especially as consumer studies were the source for the company's initial interest.
Hillshire Farms is currently running a limited market test of their Tender Smoked line of multiportion main course wood-smoked meats and chicken; and is readying a reconfiguration of its Savory Fare line of fully cooked, highly seasoned gourmet sausages. After less than a year, brand executives have found consumers heavily favoring low-fat sausages, and so the line of three poultry and three mixed poultry and meat sausages will be shifted to all poultry.
As with many issues surrounding the growing HMR industry, how and where these new center-of-the-plate products should be merchandised has been perplexing, said Horner. Research told Hillshire executives that a dedicated prepared-meat section made the most sense, but getting retailers to reconfigure deli and meat departments to focus more on meals is difficult. But the change is important to take advantage of trends. "When you look at the movement from fresh-cut meat to prepared, preseasoned, precooked, pre-anything meat items, clearly the dynamic has shifted over the years," Horner said.
Taking advantage of that shift means employing a powerful brand to get items into stores and consumers' carts before regional producers and small start-up HMR companies.
And Sara Lee continues a test started in February of its 16-item HMR Today's Selection line of fresh entrees, side dishes and sandwiches at as many as 55 Jewel Food Stores in the Chicago area. In introducing the items, Sara Lee's brand visibility and equity were considered an major advantage.
Another major poultry player, Perdue Farms, Salisbury, Md., just introduced the Cafe Perdue marinated and cooked line of eight chicken breast and three turkey breast items, designed to increase deli department entree sales.
But no where is the branded meals success story more telling than with Oscar Mayer's Lunchables. While some may not consider the lunch kits an HMR item at all, the parents who are freed from fixing lunches by the category probably do. And the power of the brand in such an uncomplicated category as lunch kits may be instructive. Lunchables stand astride the refrigerated lunches category like a behemoth. The latest data compiled by Information Resources Inc., Chicago, puts category sales at $527.4 million for the 52-week period ended June 22, up 18% over the previous year. Lunchables took more than 70%, or $370.4 million, of the category's business, with another 4.7%, or $24.6 million, for Lunchables Deli Carryouts, the adult version of the kid pleasers.
And the kid-focused lunch line is about to roll out four varieties of Mexican style nacho and taco Lunchables, co-branded with fast-feeder Taco Bell and spurred with a national ad campaign.
Tim Cofer, senior brand manager for Lunchables, is rightly positive about the strength of branded items to help carry forward the HMR business.
"We've found that the key to the success of Lunchables is that they're fun for kids. And they pull their strength from the strong brand equity, not only of Oscar Mayer meats, but from Kraft Cheese and Capri Sun juice drinks. These become real occasions for kids," he said.