Although there are glimmers of hope on the horizon, we’re not out of the woods yet, economically speaking. Even more important than what’s actually occurring is consumers’ perception of it – and as far as many are concerned, times are still tight.
Findings from a recent survey from Boston-based L.E.K. Consulting underscore the prevailing outlook when comparing affluent consumers’ optimism about achieving full economic recovery vs. the general population’s considerably more cautious view. In fact, of the general population polled, just 12 percent expect their personal finances to improve by fall 2010, while an overwhelming 65 percent anticipate no significant rebound of their finances for the next 12 to 24 months, a vivid illustration that the majority of shoppers remain in cutback mode.
An abundance of other industry research suggests that budgetstretching behaviours such as dining in more frequently, packing lunches for work and school, and more aggressive bargain hunting are likely to remain in place long after the economy finally rebounds across all demographics – a scenario that sets the stage perfectly for continued growth of shelf-stable heat-and-eat meals that marry convenience, value, taste and, of late, new better-for-you Attributes.
“Heat-and-eat meals are a way to take care of providing a nutritious meal in minutes,” notes Tim Campbell, grocery supervisor at Onalaska, Wis.-based Skogen’s Festival Foods, which operates 13 stores throughout the state. “There is a better variety than the canned pasta category – let’s face it, most of them are the same except for the shape of the pasta. The heat-and-eat meals can be consumed from the package it comes in, so the cleanup is quick and easy as well.”
These advantages haven’t been lost on shoppers in other parts of the country, either. “These are products of convenience,” affirms Santina Stankevich, media relations specialist at Keasbey, N.J.-based Wakefern Food Corp., the cooperative whose 46 members operate over 200 stores under the ShopRite banner in the Northeast. “We typically see that the easier a product like this is to travel with, heat and eat, the more successful [it is] in terms of sales. Additional factors such as price and the option of a ‘healthier’ choice (i.e., less sodium, low fat) also seem to resonate with consumers in this category of product.”
Festival Foods has seen a discernable uptick in sales of such products since the recession hit, according to Campbell. “In a comparison from Jan. 1 to June 1, 2009, vs. 2010, Hormel Compleats are up 19 percent in sales in our stores,” which he says is in part attributable “to in-store promotions and displays. I think the household food budgets having to stretch because of the economy have a lot to do with the increase. These meals are less expensive and more nutritious than going through the drive-through.”
Stankevich acknowledges “more and more new items over the past two years” in shelf-stable heat-andeat meals, but rather than the resultant double-digit surge experienced by Festival Foods, “sales have remained steady on these products” at ShopRite stores, perhaps reflecting the comparative severity of economic distress in the Midwest vs. the East Coast. To help drive sales, “we have promoted the Hormel Compleats in our in store ads and done pallet drop displays to support those ads,” observes Campbell. “These have been received very well by our guests. The pre-built pallets with the top-selling varieties work the best; the regular cases don’t stack the best for a large display.” Over at ShopRite, meanwhile, “[w]e run frequent promotions in our weekly circular to drive sales of these items, particularly when there is a new item or flavour to offer to our customers,” according to Stankevich.
Even a casual perusal of the neighborhood grocery store reveals that food retailers have begun to grasp the promotional potential of shelfstable heat-and-eat meals. On a Saturday in mid-June, the Waldbaum’s in Rockaway Park, N.Y., featured a display offering two Hormel Compleats for $4 when purchased with a shopper card, under Montvale, N.J.- based parent company A&P’s ongoing “Lower Price Project” program, which slashes prices throughout the Store.
The category is even playing a role in disaster preparedness: Jacksonville, Fla.-based Winn-Dixie’s stock-up list for consumers in anticipation of the 2010 hurricane season includes a 10-ounce package of Hormel Compleats.
This growing awareness on the part of grocers is in line with recent statistics on the rising popularity of the offerings. “According to Nielsen data over the past year, volume has increased for the Hormel Compleats brand,” notes Brett Asay, senior product manager at Austin, Minn.- based Hormel Foods. “Overall, the microwave category is vibrant and growing, and Hormel Compleats continues to expand in the space.”
Continues Asay: “Past and current economic conditions have caused consumers to re-evaluate… convenient meals. Hormel Compleats products continue to meet this need while providing a value for the consumer in offering a variety of convenient, shelf-stable, complete meal options.”
The same is true for other products in the category. “The micro meals category continues to climb, and a major segment of [it] is the adult segment (41 percent), and Healthy Choice Fresh Mixers and Marie Callender’s Home-Style Creations make up 38 percent of the adult micro meals dollar share,” says Paula Ford, brand director at Omaha, Neb.-based ConAgra Foods, which manufactures the product lines, citing IRI InfoScan figures. While the Healthy Choice line appeals to those who want better-for-you items, the Marie Callender’s brand taps into the desire for premium comfort food options with homemade flavour.
“Both Healthy Choice and Marie Callender’s … offer a one-ofa- kind shelf-stable packaging that enables consumers to see meal ingredients prior to cooking,” explains Ford. “The unique yet simple cooking process enables the consumer to conveniently transform ingredients into a freshly prepared meal in minutes. The specially designed cooking device (packaging) acts as a pasta cooker/rice steamer, separating the starch from the sauce.”
Additions to both product lines rolled out at the end of May, “to help continue to bring ‘new news’ and excitement to the category,” says Ford, noting two new meatless options added to the Healthy Choice portfolio – Creamy Tomato Basil Penne and Penne & Roasted Red Pepper Alfredo – and Marie Callender’s two new macaroni-and-cheese varieties: Smoked Bacon Mac & Cheese and Creamy Four Cheese Mac.
To drive trial and awareness, ConAgra is supporting the new items, whose suggested retail price is $3.49 each, with new TV spots, FSIs, shipper displays, and franchise cross-purchase Tactics.
Hormel has introduced new flavours as well. Since, as Asay points out, “[c]onsumer demand for healthy convenience is a major driver when developing new products in the food industry,” within the past year, Compleats’ better-for-you line, which debuted in 2008 and meets USDA guidelines for a “healthy lifestyle,” has expanded to includesuch varieties as Cheese & Spinach Ravioli, Pasta Primavera with Chicken, and Spaghetti with Turkey Meatballs, all retailing at a suggested $2.59 each. Additionally, “[t] o meet consumer demand, our core Hormel Compleats line is continually refreshed with new and exciting flavours,” notes Assay.
Compleats are currently being supported by an integrated brand campaign highlighting the breadth and depth of Hormel products. The campaign features a unified look and message across all advertising, public relations, digital and in-store/ promotional elements under a single brand platform: “Life Better Served.”
Specific shopper marketing activities include on-pack cross-couponing at shelf, and in-store marketing vehicles that include floor signage, shelf talkers, digital couponing andredesigned display shippers. According to Asay, “We have made a strong effort to extend the campaign into … traditional consumer media vehicles,as well as those shopper marketing vehicles that align with that in-store or near-store ‘moment of truth.’”
In regard to what the near future will bring in terms of new developments in the category, further advances across the board are in the offing. “Healthy Choice Fresh Mixers and Marie Callender’s Home- Style Creations are already poised for growth, with new products and unique, innovative packaging that allows for a ‘fresh-tasting’ lunch that’s easy to prepare,” says Ford. “The category will grow even more when the products are delivered in an ultra-convenient meal shelf set that defines the best-selling location for microwave meals – to help consumers find our products.”
For Hormel’s part, the company “continues to innovate and address insights gleaned from internal research, striving to be part of the leading edge in technology and consumer trends,” notes Asay. Festival Foods will also keep working to maintain consumer interest in the convenient meals category, says Campbell. “We will continue to show value through our EDLP programs on these items and run instore promotions to continue building this category. I feel this is the future for quick meals, and the sales in the canned pasta category will slowly shift to these self-contained, quick and easy-to-prepare items.”