UPFRONT 1997: Food

Targeting time-starved consumers, marketers stuff retail shelves with tasty pre-made mealsIn the coming year, food marketers are going to focus their marketing efforts and new-product innovations around the concept of home-meal replacement (HMR). This strategy of providing restaurant-quality prepared meals at retail outlets is aimed at combatting the rise of quick-service restaurants such as Boston Market. In its relative infancy now, the $35.1 billion HMR segment is expected to grow to $42.8 billion by the year 2001, far outpacing growth in the packaged-food segment. How that all translates into TV spending remains a big question mark. However, it wouldn't be surprising to see big budgets for appetizing entries that win market acceptance and are ready to roll out nationally.In the past year, everyone from megaplayers like Kraft Foods to niche players like Tyson have focused on providing consumers with convenient meal solutions. "HMR is a threat to manufacturers-if we don't address the changing consumer need," says Dave Johnson, vice president-category sales at Kraft.Kraft responded to the threat by acquiring the Taco Bell name for branded meal kits, which are now available in stores in 60 percent of the country. Kraft broke a TV spot called "Dinnertime" to build consumer awareness. In addition, Kraft has focused its large-scale, multi-brand promotions, such as this summer's "No Oven Summer," around offering quick-and-easy recipes that require use of Kraft brands and drive sales of other high-margin products such as meat and produce.Product innovation is the key ingredient to staying competitive. Many companies are developing new offerings to compete directly against restaurants. Tyson, for example, has created Gourmet Selections, a line of chef-developed refrigerated chicken meals that can be heated in under four minutes. The new line is being marketed under the theme, "Fine dining without reservations." Tyson has also introduced Tyson Restaurant Favorites, a line of frozen meals they hope will gain back share from take-out establishments. Borden, whose new mission is to focus on "grain-based meal solutions," cooked up new flavors for its Classico pasta sauce based on restaurant trends. It also implemented a new retail concept called The Italian Corner, which offers a variety of made-to-order Italian meals, including Borden's Classico sauce over its Novita pasta.Due to the growing popularity of ethnic cuisine in restaurants, ethnic foods are also growing at retail. Hormel Foods has made a concerted effort toward offering consumers everything from Mexican food, with its Chi-Chi's Restaurant Style Mexican Products, to Asian cuisine, with its House of Tsang line. This year, Hormel has begun to grow its Marrakesh Express line by bringing its Po River Valley risotto line under the Marrakesh banner and increasing promotions and advertising around the line to take advantage of the growth in Mediterranean foods. Quaker Oats, too, has placed increased emphasis on its Near East line of Mediterranean side dishes. Food marketers are also focusing their advertising around core brands. For example, Campbell Soup Co. in September announced a restructuring initiative designed to free up funds to support their top brands, such as Campbell Soup and Pepperidge Farm. Similarly, H.J. Heinz chairman and ceo Anthony O'Reilly in March announced a reorganization plan designed to strengthen the company's core businesses: Heinz ketchup and baby foods, Ore-Ida, Weight Watchers, StarKist, Farley's and 9-Lives. The plan includes increasing media spending by 30 percent over the next two years. -Stephanie ThompsonHOT BUTTONS* Home meal-replacement continues to drive products* Food marketers to put more muscle behind ethnic cuisine* Campbell will market core brands aggressivelyOVERALL: Spending up moderatelyDARK HORSE: Borden Foods' new consumer-focused branding strategy in meal solutions could force competitors to cook up new productsCopyright ASM Communications, Inc. (1997) ALL RIGHTS RESERVED National

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UPFRONT 1997: Food

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