Wednesday, October 7, 2009

Merchandising Trends: Meal Solutions

By Peter Breen

Sidebar: Campbell Soup Gives Food Lion "Recipes for Less"

The following article is based on a research report released this fall by the Campbell Soup Company that calls on retailers to develop "meal solutions" programs for their shoppers.

There's a reason why pre-cooked rotisserie chicken has been among Costco's best-selling SKUs for several years.
And there's a reason why the "Apron's Simple Meals" program is one of Publix's most successful merchandising initiatives.

And there's a reason why, in the current economic crisis, Food Lion, H-E-B, Kroger and other chains are promoting dinner "solutions" that can feed a family of four at a price point under $10.

The reason is this: "More than ever, American consumers are looking to food manufacturers and retailers for home-prepared meal solutions that meet their needs for convenience, with a new emphasis on wellness and quality."
That statement is the pivotal conclusion reached by the Campbell Soup Company in "What Shoppers Really Want and What Food Retailers Can Do to Deliver," a study that culls data from custom research and a variety of industry sources to present merchandising strategies designed to help retailers "strengthen shopper loyalty" and become "valued destinations for lifestyle-inspired solutions in the areas of meal planning, preparation and provisioning."

Although the marketing and merchandising of "meal solutions" is already fairly commonplace among supermarkets and other food retailers (see Related Articles), the Campbell study implies that many existing programs may not be hitting the bull's eye because they don't address three integral -- and integrated -- needs of today's food shopper.

"Macro trends associated with changes in demographics and lifestyles have resulted in a new consumer emphasis on wellness, convenience and quality," according to the study. A number of food retailers have addressed this trend "by differentiating the store perimeter through lifestyle merchandising strategies that emphasize fresh and ready-to-eat meals." Current initiatives, however, often don't address the needs of shoppers who still want to do some of their cooking "from scratch," but feel they have neither the time nor the skill to do an adequate job, according to the report.

What's more, few retailers are addressing this new shopper emphasis within center store categories, which -- despite the relative lack of attention on packaged goods in recent years -- "still accounts for 72% of sales and 105% of net profit" in the supermarket channel, according to the study. (And which, it should be noted, is the place where Campbell's products reside.)

Moreover, some of the programs that do seek to create "meal solutions" out of center-store products don't fulfill all three needs, focusing more on the convenience aspect and much less on quality and/or wellness. The most basic examples are the ubiquitous "meal deal" promotions that offer little more than price discounts on such combined purchases as carbonated soft drinks and frozen pizza.

"Creating daily nourishing simple meals involves planning menus around trusted ingredients and brands: fresh or frozen meat or fish and vegetables, combined with pantry or frozen staples [that] can be conveniently stocked [at home]," Campbell's study suggests, offering "Seven Principles of Simple Meal Merchandising" that can turn a retailer into a valued resource for its customers.

An ideal program will deliver "solutions" rather than a list of ingredients, combine perimeter and center-store products to present a complete meal, offer ideas on how to customize the offerings, and routinely refresh the meals being presented. (A description of all seven principles can be found in the full report.)

It also will present the solutions in an informative, entertaining "Simple Meal" destination within the store, the report recommends. Based on "space availability, operational capabilities and desired shopping experience," these areas can range from a simple, stand-alone display to a complete department that unites fresh foods and packaged goods in one location.

Prime Examples
The retailer that most closely adheres to the guidelines recommended by Campbell is the aforementioned Publix, which launched Apron's Simple Meals chain-wide in 2005 and has built the program into an integral component of both its marketing and merchandising strategy.

The weekly program offers quality meal ideas ("Turkey Apple Panini with Watercress Salad") that can be prepared in 30 minutes or less. The recipes (through which national brands buy into the program) are distributed on cards available at special in-store displays (see Image Gallery at right), which include:
  • kiosks at which employees stage periodic cooking demonstrations and sampling opportunities.
  • a branded display to merchandise all the necessary ingredients. (Products are also tagged at their primary shelf locations.)
  • a floorstand carrying the branded cookbooks and cookware that the program has spawned.
Two Publix stores now even have kitchens in which shoppers can prepare multiple meals (with assistance) for future reheating at home. Customers who are even more time-starved (or less inclined to cook) can simply order meals for pick-up at the store.

Also exemplifying the guidelines is Western New York grocer Wegmans, which in fall 2007 launched "Take It or Make It," a program that provides the recipes for meals ("Bowtie Pasta with Vodka Blush Sauce & Chicken") that also are available in the prepared foods department. (See attached Image Gallery.) One recipe per week is cooked at in-store meal stations for sampling, and several are showcased in online videos. As at Publix, the ingredients are merchandised in dedicated displays.

In fact, the chain's very tagline seems to echo the findings of Campbell's report: "Think Healthy. Think Easy. Think Affordable. Think Wegmans."

Fall 2008 Imperative: Now, Make it Cheaper
The recent economic malaise also has consumers "re-evaluating purchasing decisions they can control" such as "staying home more," "eating out less" and "closely monitoring the products and brands they buy," according to the study (which was published before Wall Street's recent woes turned the ongoing economic downturn into a crisis).

That portion of the trend came to the forefront in late-summer 2008, as "meal solutions" programs began focusing heavily on the price message -- most commonly in the form of a "feed a family for under $10" offer.

Texas supermarket H-E-B this month began promoting seven dinner recipes that does exactly that. Each meal is built around an entree from the chain's own "Fully Cooked" line (such as "Mexican Style Lasagna") and enhanced with other private-label ingredients. The meals are presented as requiring "hardly any prep time" and "no skills."

Similarly, a new "Meals for Less" program at Delhaize America's Food Lion offers simple, affordable ideas for lunch and dinner. Dishes have included "Tenderloin Dinner" and "Chili & Cornbread." The effort differs from H-E-B's in the abundant listing of national brand products among the ingredients. At least one partner, Kraft Foods, even supplied a product display communicating the meal offer. (See Image at right.) The ingredients typically are merchandised together in permanent displays.

Through its Campbell's Kitchen initiative, Campbell has already provided Food Lion with 25 different "Meals for Less" recipes. See sidebar for details.

That difference between the programs at H-E-B and Food Lion exemplifies the implied message for consumer product manufacturers within Campbell's report: As retailers continue to move away from simple "product merchandising" in favor of solutions-based strategies that address the needs of 21st century shoppers, brand marketers will have to identify mutually beneficial partnership opportunities or risk being left out of the solution set.

Anyone up for a rotisserie chicken combo meal?

Campbell Soup Gives Food Lion "Recipes for Less"
Research indicates that meal preparers are faced with the question, "What will I serve for dinner?" nearly 10,000 times in their lives (source: "What Shoppers Really Want," Campbell Soup Company, 2008), and that the state of the economy has created a compelling need to help shoppers stretch their grocery dollars.
These two factors led Campbell to partner with Delhaize America's Food Lion in the development of a program dedicated to simple, affordable meal solutions. Using the slogan, "Dinner for Under $10," Food Lion is offering its customers "Recipes for Less," a series of meal ideas presented along with all the ingredients needed to make them for less than $10. Campbell provides many of the recipes featured in the program.

In developing the recipes, Campbell gathered data on the tastes and preferences of Food Lion's shoppers, and Campbell's Kitchen developed a series of recipes targeted at those consumer groups. Recipes involve Campbell's products, items from Food Lion's private-label portfolio and, in some instances, other manufacturers' products as well.

Each week, stores throughout the Food Lion chain display a new "Dinner for Under $10" recipe idea in a single location. For example, stores recently merchandised all the ingredients for a spaghetti dinner for four; the next featured meal was a chicken biscuit dinner.

Campbell's Kitchen developed 25 recipes that will be rolling out to customers at Food Lion throughout the coming months. The effort is being communicated via store circulars and P-O-P materials including header cards, recipe cards and endcap displays. (See Images at right.)

"We are pleased with the results of the program so far," said Kristy Vigil, senior customer business manager at Campbell. "This has been a tremendous collaboration between Campbell and Food Lion, and we look forward to continuing the effort."

Published: October 2008