Working Paper 98-01 Advancing Knowledge About Processing, Distribution, The Retail Food Industry Center Sales, and Food Service University of Minnesota Printed Copy $22.50 The Home Meal Replacement Opportunity: A Marketing Perspective Ronald B. Larson The Retail Food Industry Center Applied Economics Department University of Minnesota
[email protected] (612) 624-4746 January 1998 Dr. Ronald Larson is the Associate Director of The Retail Food Industry Center, University of Minnesota, 317 Classroom Office Building, 1994 Buford Ave., St. Paul, MN 55108-6040, USA. An earlier version of this paper was presented at the Minnesota Food Expo in Minneapolis, MN. The Retail Food Industry Center is an Alfred P. Sloan Foundation Industry Study Center. The Home Meal Replacement Opportunity: A Marketing Perspective By Ronald B. Larson Abstract Many food retailers perceive home meal replacements (HMR) or meal solutions as major opportunities for sales growth. These fully- or partially-prepared foods appear to solve growing consumer needs: lack of time, lack of skill, and lack of desire to prepare food. However, a recent financial review of the foodservice operations at 10 large supermarket chains found that the average store’s prepared food operation was losing money. The study identified three important areas that supermarkets need to improve: product shrink, employee training, and promotion. These three areas are closely linked with the design and marketing of the HMR concept. To increase the profitability of their HMR programs, supermarkets and restaurants need to address the seven key “Ps” of HMR marketing: positioning, product, package, place, price, promotion, and people. This paper reviews these seven marketing issues and summarizes the lessons learned by early HMR providers.