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QSR Feature
Beating the Supermarket Shuffle

“We’re all part of the same playing field [with quick-service],” says Dan Donovan, a Giant Eagle spokesman. “If you’re going to a quick-serve restaurant now that’s an opportunity where you’re not utilizing a supermarket per se. We’re trying to appeal to a broader majority of people by giving them as many options as possible.”

Analysts who follow one or both industries agree that the development is opening up an interesting new theater in the continuing, multi-front war between food stores and foodservice. But they disagree about its ultimate impact.

“This is potentially huge for the consumer packaged goods industry,” says Ken Harris, a principal in the Evanston, Illinois, office of Cannondale Associates, a consulting firm for many big food and beverage companies. “The easier these things are to get used to, they could potentially take a small portion of the quick-service business.”

But Ron Paul, president of restaurant-consulting firm Technomic, believes that consumer packaged goods companies’ customized products represent “only a minor item” for quick-serves’ consideration, although supermarket-prepared foods are “a more serious threat.” The problem with many customized products, he says, is that they’re still frozen foods, “and they’re still not up to quality standards. They’ll find some success because they represent an improvement in the quality that they have now, but they’re substitutes perhaps for other frozen meals—not necessarily for a restaurant meal or even a fully prepared meal.”

Besides, quick-serves can out-distance any new meal-replacement product that a supermarket, or a consumer packaged goods manufacturer, can deliver—as long as they keep their own innovation pipelines hot with intriguing new offerings, says Harvey Hoffenburg, president of Propulsion, a marketing consulting firm in New Canaan, Connecticut, and a veteran of both supermarket and quick-service marketing. “They can always stay ahead of the game,” he says.

Papa Murphy’s Vice President Evan Evans agrees that his chain of “take-and-bake” pizzerias has to keep an eye on customized supermarket products “because it’s a share of stomach discussion.”

“But we offer so much more control to consumers in terms of what toppings end up on their pizza, and our freshness proposition can’t be beat,” he says.

Consumer packaged goods companies and supermarkets now are playing a tougher game against quick-service with customized products than they did before them. In their tireless search for foods that are just as good and tasty as they are quick and convenient, consumers were telling food-industry researchers that they would be eager to try customized products in which the components are packaged separately.

“Consumers wanted an easy way to pick up one container with everything included: the components of the salad, lettuce and dressing, even the fork,” says Ali Leon, a fruit and vegetable marketing executive for Ready Pac, an Irwindale, California, consumer packaged goods manufacturer that recently introduced customizable, fresh packages of Santa Fe Chicken and Asian salads in addition to its pre-assembled Cobb and Caesars salads. “And they wanted variety.”

At the same time, consumers continue to be daunted by the idea of doing too much preparation from scratch at home. “It’s a matter of understanding that consumers are a bit frightened by the idea of recipes,” says Harris, a consultant. “So if you’re just putting together four or five items, you’ve just ‘assembled’ a meal, and that sounds a bit less threatening.”

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