An endless pantry of fresh food and exotic spices every day of the week would be any chef’s dream. Couple that with a chance to repurpose meals and create multiple serving sizes in advance—and you’d have most resterauterus intrigued, too.
Cue to the grocery store or, more specifically, the grocerant: a new breed of supermarket offering restaurant-inspired food with a whole new spin on home meal replacement. This is not your standard rotisserie chicken and salad bar.
“Consumers just aren’t cooking at home like they were five years ago,” says Robert Carter, executive director of foodservices at NPD Group in Toronto. The latest market data shows Canadians go to foodservice environments (including grocery stores) for 6.6 billion meals annually, he says, and they spent $1.2 billion on HMR in 2015 alone.
“Now that HMR is evolving into true restaurant-style meals, consumers are responding and we’re seeing growth in spending year over year,” says Carter. The most recent data from Nielsen shows HMR is one of the Top 5 grocery categories in growth, and rose a whopping 7% over the past year.
As grocers expand their “ready to eat” and “ready to heat” offerings, the convenience of picking up quality, reasonably priced lunch and dinner at the grocery store is giving restaurants a run for their money. And it’s not just fast-food chains facing competition, either.
“I see some urban grocerants taking on elements of a neighbourhood pub, especially where [condo] units are so small there just isn’t the room to have people over for a home-cooked meal,” says Jordan Levitin, senior vice-president at Ipsos Reid.
￼There’s also a casual homeyness that give grocery stores latitude over the typical restaurant, he adds. “There’s no server and no need for someone to explain the menu as you can see exactly what you’re going to get.”
Tom Barlow, president and CEO of the Canadian Federation of Independent Grocers (CFIG), says HMR is a natural evolution for grocery stores, but the move has to be done right. “Grocers have already invested in the bricks and mortar and have the materials on hand to provide high-quality meals,” he says. “But grocers who are doing it well are the ones who have made a commitment to offering good meals beyond traditional chicken and pizza.”
To help out, Canadian Grocer spoke to experts, including store managers that have successfully moved into the grocerant business. Here’s their advice.
CATER TO THE CUSTOMER
Before deciding on specific food items, know your shoppers, says CFIG’s Barlow. “There’s no point in offering smoked salmon with dill sauce in a market that doesn’t have a consumer looking for that,” he says. Understand your store’s demographic and match your menu items accordingly.
STICK TO A THEME
Having a central theme and choosing menu items around it has been key to success for Freson Bros., where HMR makes up 14% of overall revenue. For instance, the Alberta chain’s butchers focus on slow-cooked, locally sourced, meat-heavy entrees. “You can’t be everything to everyone. The best restaurants I know have a solid concept of what they want to be,” says deli director, Henry Song. “You don’t see good ones offering Italian one day, then switching to Cuban.”
MAKE IT MOUTH-WATERING
“If you’re going to make it, do it well,” advises Frank De Rose, co-owner of Toronto’s Lady York Foods, which sells out its HMR menu most days. “You have to be on top of quality because if something doesn’t taste good, your customer won’t be back. And repeat business is everything.” Once customers trust the food quality and your level of execution, they’ll be willing to try just about anything you serve.
GIVE THEM WHAT THEY WON’T MAKE AT HOME
What foods should you put on the menu? NPD’s Carter points to the untapped potential of fish. “People don’t like to prepare fish at home, but perceive it as part of health and wellness,” he says. Or try ethnic fare. “We also haven’t seen a lot of good ethnic [prepared] foods coming out of the grocery store yet.”
CONVENIENCE IS KEY
At Lady York Foods, which has tripled the size of its HMR section in recent years, De Rose says the location of the prepared food in a store is crucial. “You want [your HMR] in a high-traffic area so people will easily see it when they walk in. But you don’t want it clogging up other passages throughout the store,” he says.
ENTERTAIN THE CUSTOMERS
“Our kitchens are like open-air bistros,” says Gary Wildman, di-ector of food services for Longo’s in Toronto. “Our pizza artists stretch the dough in front of the customer so there is theatre involved.” And don’t forget about ambiance and comfortable seating. “Take pride in picking the right decor,” Wildman adds.
PUT SOME SKILL IN THE COOKING
Having the same person who slices deli meat all day manage the HMR program is not a recipe for success. “We’re providing the convenience of restaurant-style food [that must be of a] consistent high quality,” says Michael Pugliese, owner of Michael-Angelo’s in Mississauga and Markham, Ont. At both store locations, a roster of Red Seal chefs and line-cooks prepare fresh food daily.
Similarly, Concord Foot Centre, in Thornhill, Ont., invested in a back-end kitchen and dedicated staff to run it as part of a recent renovation. “We put in the kitchen so we could prepare meals on-site and our HMR is now up 150% and growing,” says store manager, Rina Virgillio. If you can’t afford a super chef, consider drawing new grads from local colleges who studied foodservice and can provide some good perspective on menu planning.
CHOOSE YOUR EQUIPMENT WISELY
Providing restaurant-quality meals will likely require new equipment, so be sure to invest wisely, says Henry Pellerin, vice-president of marketing at Hillphoenix, a U.S.-based supplier of commercial display cases and application systems for the food retail industry. “You don’t need a lot of equipment if you pick the right stuff,” he says. “Think about versatility and adaptability so you can use the same equipment for several programs.” For instance, refrigerated drawers that carry fruit and veggies for juicing in the morning can also be used for meal prep in the afternoon.
HOW DO I PROMOTE IT?
Cater to the time-strapped shopper by putting displays of bread or salad near entrees for easy access to complete meals. Or consider pairing meals to occasions. For this past Valentine’s Day, Michael-Angelo’s offered a meal kit with heart- shaped pasta and chocolate-dipped strawberries that shoppers could order ahead and heat up at home. Offering discounts is another good way to draw customers. After 4 p.m., Longo’s offers a discount on a different HMR item every day, complete with sides. At Farm Boy in Ottawa, a salad-bar loyalty card gives customers their 11th salad for free. Farm Boy also promotes meals on its website, complete with nutritional info and ingredients.
WHAT ABOUT WASTE?
Food waste can be a profit killer for grocerants. But the good news is that an effectively managed HMR program actually has a better chance of curbing food waste than a restaurant.
“Unlike a restaurant, grocery stores have flexibility in serving sizes and can utilize foods from different departments,” says Pellerin.
At Freson Bros., for example, serving leftover pizza cold the next day has been hugely successful. “We try to give everything one more life,” says Song. “But not everything lasts under a heat lamp as it would in a restaurant setting, so you have to test things out.” Longo’s Wildman suggests grocers take a page from the fast-food chains. “Places like McDonald’s have limited offerings so they’re in and out,” he says. “You have your core menu but then you augment it with what’s seasonal and see what sticks.”