By Tom Ryan
Are retail meals (ready-to-eat/ready-to-cook meal solutions) becoming an even bigger threat to restaurants and fast-food chains?
Technomic announced last week that it planned to launch a research study, Retail Meal Solutions: A New and Growing Opportunity for Foodservice Manufacturers, in order to help food manufacturers better understand the retail meal solutions market and tap into new opportunities.
The food industry research firm said food retailers--including supermarkets, convenience stores, warehouse/club stores, supercenters and various specialty retailers--"have all been intensifying their efforts to win back consumers' dining-out dollars" through new and appealing meal solutions.
"Whole Foods probably deserves most of the credit for spawning this new interest among retailers," said Ron Paul, president of Technomic. "They were the first to prove that consumers are drawn to ready-to-eat and ready-to-heat meal solutions, and will use them to replace home cooking or dining out, assuming that quality and variety aren't compromised."
Food retailers are pushing ready-to-eat/ready-to-cook meal solutions to differentiate themselves from their competition and drive traffic, but also to take back dollars from restaurants. The U.S. Department of Agriculture says Americans spend half of our food budgets on meals outside of home, double what was spent in 1970.
"One of the things [supermarkets] look for in additional sales is what's for dinner tonight," Bert Hambleton of Hambleton Resources, recently told The Seattle Times. "And they look enviously at the restaurant trade and say 'Hey, how do we get some of that back?' Because if you're eating food at restaurants, you're not eating it at home and you're not buying groceries."
The retail meal trend plays to the convenience required by today's harried homebody. While it's cheaper to buy groceries and cook at home, customers seem ready to pay more for food if they could use the time they would have spent preparing it to socialize with friends or play with the kids.
But Technomic said retail meals are also growing in popularity because food options are getting better. New and expanded meal offerings place a much stronger emphasis on quality and variety, integrating many of the trends shaping restaurant menus, such as ethnic foods, premium ingredients, customization and updated preparation techniques.
Mr. Paul noted that as more retailers upgrade their menu offerings for customers, manufacturers "need to step up their efforts to assist them by providing culinary expertise, new products, and assistance with training and merchandising." Further, restaurant operators, both chains and independents, "need to recognize these developments for what they are--a direct competitive threat targeting their customers."
Discussion Questions: What do you think Technomic will find out from its study into the retail meal trend? How big is the retail meals threat to the restaurant industry?
- Technomic Finds Supermarkets, Other Retailers, Intensifying Efforts to Compete with Restaurants - Technomic
- Convenience Tips the Scales - The Seattle Times