Broad Street Licensing Group Food News

Retailer Meal Solutions’ Outlook Cloudy

A new study by industry researchers Technomic indicates that RMS (retail meal solutions, a jargony version of heat n’ eat meals sold by grocerants) has an uncertain outlook. though there are indications it could do well.

The reasons are pretty logical and conform to informal input we’re getting from contacts in the fresh-prepared space:

  1. Retailers like store brands over branded
  2. Consumers like convenience, but are sensitive to price
  3. Frozens, declared dead at one point, remain highly-competitive because of price
  4. Restaurants face a real threat from retail meal solutions
  5. Consumers see fresh-prepared as a very viable alternative to home-made, take-out and frozen

Restaurants last year crowed that “catering” (their word for old-fashioned “take out”) would be the magic bullet that would slay the grocerants and return the foodservice sector to profitability. The many bankruptcies, consolidations and shutterings proved that was much hot air from those like Monkey Media peddling catering solutions.

  1. The RMS consumer tends to be a repeat customer, though is not loyal to a particular outlet or product
  2. 88% purchase a grocerant meal at least 2-3x monthly, though the drop-off is steep (45% buy 4-6x and only 17% 7-9x)
  3. Traditional grocery stores, club stores and mass merchandisers (Walmart) are the overwhelming destination for purchasing
  4. C-stores are making headway, with 55% of purchases
  5. But c-stores, while having the highest frequency of purchase, also lose the highest percentage of customers (2x that of upscale specialty stores and 8x that of traditional grocery stores)
  6. Dinner is the preferred daypart except for c-stores where it’s snacking that rules

Restaurants must understand that “Take Out” under any name is just one leg of the stool, with in-restaurant customers and retail customers as the other two.

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