Home-meal Replacement Is on the Rise

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Volume 48, Number 4

Written By: Carol Neshevich

Imagine this increasingly common scenario: Sally is on her way home from work; she stops at the grocery store to do her weekly shop, but as she strolls the aisles, she can’t imagine cooking a full meal from scratch at home tonight after the tiring day she’s had. Besides, it’s already 6 p.m., and the kids will be starving. Then she spots the grocery store home-meal replacement (HMR) section: a full selection of ready-to-eat meals, from chicken pot pies to nutritious salads to hearty pasta dishes and much more — all at fairly reasonable prices. All of a sudden, the menu for tonight’s dinner becomes clear.

“From our latest figures at NPD, there are about 243-million visits [per year] into grocers that have an HMR program,” explains Mark Dempsey, director of Client Development, Foodservice at the NPD Group Canada in Toronto. “What we’ve seen over the last six or seven years is about a 17-per-cent increase of visits into HMR, which is well ahead of the marketplace. If you consider that quick-service restaurants (QSRs) and full-service restaurants (FSRs) have been pretty much flat and are expected to remain flat over the next couple of years, then, as a general segment, HMR is expected to be a shining star. Canadians currently spend about $2.5 billion [per year] on HMR … this is a market segment that’s increased dramatically and is showing no signs of slowing.”

While HMR has been on the foodservice industry’s radar for more than a decade, the difference today is in the number of grocery stores now offering HMR options as well as the increasing quality and range of items. It’s no longer the standard rotisserie chicken, potato wedges and coleslaw; at popular grocery chains, including Ontario- and Nova Scotia-based Sobey’s, Montreal-based Metro, Vaughan, Ont.-based Longo’s and Toronto-based Loblaws, there are now various innovative dishes.

Loblaws, for instance, launched its From-Our-Chefs program in select stores in 2012 to bring restaurant-quality meals to the HMR counter. “We pride ourselves on innovation,” says Jim Saufl, VP, Fresh, Operations Standards, Market Stores at Loblaw Companies Ltd. “Every spring and fall we add new items to the From-Our-Chefs program to ensure our assortment remains seasonally relevant and regularly provides new items for our customers to enjoy.”

Some of the popular HMR options on Loblaws’ menu include Panko Chicken with Sweet Chili Sauce ($5 each), Turkey Spinach Meatballs ($5 each), Broccoli Cashew Crunch ($1.99 per 100 grams) and Turkish Pearl Couscous ($1.99 per 100 grams). While Loblaws won’t share sales numbers, Saufl will say customers have responded well to the From-Our-Chefs program. “Since the launch in 2012, we have expanded the program to more than 280 stores across the country,” he says.

But should traditional foodservice operators be worried about this new face of grocery HMR? Perhaps, but not necessarily. Although Loblaws and its counterparts are striving to provide higher quality and greater menu innovation, NPD’s Dempsey says the overall consumer perception is that they haven’t quite hit the mark yet. “At NPD, we study customer-satisfaction scores, and one of the areas HMR is the most challenged is satisfaction with the menu. So, while consumers are seeing good value in terms of time savings and money savings, only 27 per cent of consumers tell us they are satisfied with the menu in their chosen HMR outlet,” says Dempsey.
“So, FSR or QSR operators should be backing themselves to win with the strength of their menu options,” he explains. “Consumers still want to go to QSR or FSR and get a wider breadth of their favourite products.”

Michael Steh, executive chef at Toronto’s Colette Grand Café, agrees. The French restaurant offers innovative take-home/take-out options, such as kale caesar salad with marinated grilled chicken, grilled shrimp on a chopped salad, grilled big-eye tuna on a traditional Niçoise or roasted lamb on a Thai-style noodle (all in the $15 range) that customers can grab to eat at lunch (there’s a lovely park across the street where many diners enjoy Colette’s take-out fare) or take it home to eat at night. That said, Steh doesn’t view grocery HMR as competition; he thinks his café offers something completely different. “People come to our restaurant, because they want the entire package,” he says. “People who are purchasing something to take home or supplement their own cooking, and people who are looking to go out for a dining experience … those are completely different [customers]. I don’t think [the rise of grocery HMR] is going to affect the numbers at restaurants in general, because if you create a captivating enough experience that’s got a lot of great qualities to it — whether it’s the service, the atmosphere, the food or the beverage program — you don’t need to worry.”

NPD’s Dempsey concurs: “When it comes down to it, even the nicest HMR areas are still a supermarket; so when people want to go out for that family meal occasion, they’re still going to favour FSR over HMR.”

Kelly Mansell, owner of Rocket Bakery & Fresh Food in St. John’s, N.L., runs five businesses in one: a coffee shop, bakery, fresh-food outlet with soups and sandwiches as well as a catering and events space. When she first opened a few years ago, her focus was on bakery items, but it didn’t take long to realize the “fresh food” business was more popular. Quality, tasty homemade items such as soups ($6.95 per serving), salads ($4.50 to $6.95), sandwiches made on fresh bread ($6.95 to $8.50), quiche ($5.95 per slice) and pulled-pork turnovers ($8.50) are extremely popular, and Rocket’s baked fish cakes ($3.75 each) are legendary in town. These items are available in the café, or they can be purchased to take home, HMR-style. “We’re finding people are wanting more and more of that take-home, ready-to-eat meal,” she says, “and what we offer here has got a healthier spin than what people usually have access to for take-home.” They make everything from scratch at Rocket and try to source the highest-quality ingredients, which Mansell believes differentiates them from many grocery HMR options.

The Rocket operator is confident demand for quality HMR-style offerings will continue to grow. “The time has passed for just grabbing fast-food, because you’ve got to get to soccer practice and the kids need to eat something,” she says. “If you’re going to spend your money on something convenient, people want it to be high quality and nutritious.”

Overall, HMR is one more market restaurateurs should monitor, while keeping customers engaged with meals-to-go and unique restaurant experiences — particularly in the full-service market. “Full-service operators should know that the money they’re investing into a great atmosphere, a great environment, is going to reap dividends,” assures Dempsey.

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