Takeaway challenge
Home meal replacement (HMR) is described as "the provision of meals or meal components, freshly prepared away from the home for same-day consumption at home".
In other words, it's an enhancement of the takeaway sector, although the majority of HMRs are bought fresh, but chilled, from the supermarket for final assembly at home.
Originating in the US, where it is mainly an alternative to eating out, HMR responds to an increasing desire from consumers for something more wholesome than fast food.
The UK market, worth £193m in sales per year, is expected to soar 260% to £690m by 2002, after which "growth will accelerate", says the Institute of Grocery Distribution (IGD), which has published research document HMR and Beyond - the Retailer's Assault on the Foodservice Market.
The IGD predicts that within 20 years, spending on meals outside the home will exceed that spent on food wholly prepared and cooked at home.
In the UK, HMR is seen as an alternative to buying in ingredients and preparing food at home. The UK market to date has been developed by the major grocery retailers. Most supermarkets now offer rotisserie chicken, ethnic foods and pizza. "Rotisserie chicken is the most prevalent home meal replacement range," says the IGD. "However, ethnic food, such as Indian and Chinese cuisine, will exceed it in the near future."
Impacts of the expanding HMR market will include:
l A blurring boundary between grocery stores and restaurants with more head-to-head competition between the sectors.
l Pubs offering curries to take home at the end of evening.
l A fall in demand for unprocessed ingredients. Suppliers of meat, dairy, fish, eggs and many other products will need to meet the exacting technical standards of HMR manufacturers.
l Meal Solution Centres in superstores based around solving a particular consumer problem.
l New high street and local Meal Solution Centres.
l Staff restaurants offering an HMR service.
l Take-home-and-heat options on restaurant menus.
l Healthy HMRs, a range of low-fat, high nutrition takeaway foods.
HMRand Beyond is available from the Institute of Grocery Distribution, priced £400. Call 01923 857141.
Rose Cunningham saw food sales soar by 220% and wet sales increase by 30% in just one night by offering a curry takeaway for her drinking clientele. Cunningham, the licensee of the Old Crown in Fleckney, Leicestershire, is just one of the publicans catching on to the idea of home meal replacement.
There has long been a tradition of people buying food on the way home from the pub in the form of takeaways, so it makes sense for individual publicans to meet this demand themselves. Pub chains have not announced formal plans for entering the home meal replacement market - but they are working on it.
The idea carries with it a number of business certainties: takeaways are a profit centre with added potential for increasing wet trade; curry is an obvious cuisine; and takeaways could offer customers something they can't already obtain locally.
Cunningham heard of the success of another publican offering pre-prepared Indian cuisine to customers. Rick Robinson of the Willoughby Arms, Kingston-upon-Thames, had not previously used his kitchen but, for an outlay of £35 for cutlery and plates, he made a net profit from food of £3,744 in the final three months of 1998.
"I read about Rick keeping the kitchen open until 10pm, which deterred customers drifting away to nearby takeaways and restaurants," says Cunningham. "Up here in Fleckney, we normally close the kitchen at 9pm but decided to stay open until closing time as a one-off. Curry was an obvious choice, as the village already has a Chinese and a chippie."
Nearby Leicester has a large ethnic community and it was easy to find a specialist supermarket for spices and authentic ingredients. Takeaway cartons were already on site as the pub offers a takeaway service with its normal menu for tourists using the nearby Grand Union Canal.
Cunningham charged £7.95 for curry, rice, an onion bhaji, naan bread and a poppadom. Customers could choose from four curries produced by the pub's team: beef vindaloo, lamb biryani, chicken madras and balti.
More than 80 meals were sold, with customers still waiting at closing time to be served. "On a normal Saturday night, the pub serves just 20-25 covers. Our food gross profits are normally 80%; for the curry night I reckon we were working on just over 60%, which I'm still happy with. Wastage was zero, as we sold out. We can adjust prices in the future depending on demand."
Customers have asked for more curry takeaways, but Cunningham is unsure of the optimum offering. Should she stick to once a month or make it a regular Saturday night event and risk "curry fatigue"?
"It's quite a nice dilemma to have," says Cunningham. Considering other factors, overheads were the same, as no extra staff were needed. There was the added bonus of increased drink sales of 30%, primarily lager.
In addition, the evening brought in new customers, most of whom said they would return, according to Cunningham. "It's nice to have found the elusive gap in the market; we're going to make the most of it," she says.
Making headlines in the West Midlands recently is Perminder Bains, who runs the Pele Balti Pub in Coventry, a Punch Taverns leasehold. Bains has built up home meal replacement sales of around 100 meals a week. Average dish price is £3.50, at 60% gross profit. All 100 dishes on the pub's menu are available to take home, with chicken tikka masala and balti dishes the most popular.
"Customers are turning away from the heavy, hotter dishes such as madras," he says. "They want lightness and taste, but above all, they want authenticity."
Bains believes any pub with a food offering can do takeaways, but there is one caveat: "You've get to get the formula right. That means high-quality food and quick service."
Bains' increasing sales are built on two distinct customer types: those visiting the pub socially who decide they can't be bothered to cook, and those who visit specifically for the food because they prefer Bains' offering to the local takeaway. After all, they can always have a pint or two while waiting. n
