-By Meg Major

As competition and consumer expectations continue to intensify, supermarkets' allied deli, bakery and prepared foods departments require practical, cost-effective strategies and solutions to keep pace during a period when the lingering fragile economy still finds many consumers retreating from restaurants in favor of eating more meals at home. How can supermarkets maximize the at-home eating trend while simultaneously adding value to their restaurant replacement solutions?

To help address this and many other timely related issues, Progressive Grocer recently assembled a group of leading industry executives for a lively and insightful roundtable discussion involving equipment, menu selection, ideal departmental formats, successful promotional strategies, staffing, service, products, and foremost challenges and opportunities.
Moderated by PG Executive Editor Meg Major and sponsored by Cambridge City, Ind.-based The Really Cool Foods Co., roundtable participants included Tom Clark and Brian Morrison, president and director of perishables and foodservice, respectively, for Basalt, Colo.-based Clark's Market; John Highbaugh, VP of merchandising, Associated Wholesale Grocers, Fort Worth Division; Mike Kemp, director of deli/foodservice, Ball's/Hen House Markets, Kansas City, Mo.; Beth McDonald, co-president, The Really Cool Foods Co.; and Linda Wiggins, VP/director of bakery/deli operations, Brookshire Grocery Co., Tyler, Texas.

Progressive Grocer: Generally speaking, what's been the most telling aspect of supermarket prepared foods programs in this challenging economic cycle?

Beth McDonald: Having spent most of my career in merchandising and buying, I lived through the first wave of HMR. But the industry has learned so much since that time — especially about what didn't work, be it fixtures [or] the viability of products. This time, the combination of issues is very different, though. We not only have the learning under our belts, but the economy has [also] shifted. The other thing that's happened in that gap between then vs. now that's been really valuable is that food became cool, thanks to the Food Network and people traveling more, which has made them far more comfortable trying new things.
In addition to all that's been learned, from an economic standpoint, time is money, and most people now have to work harder and longer to make ends meet, so we've been given a chance to deliver on the price/value equation with prepared foods that we didn't have the luxury of having in the first wave.

John Highbaugh: Speed is the base and time is the currency, more so now than ever. In studies years ago, we found that household income levels don't matter as much as we originally thought — most kids still play soccer and have cell phones — and all spectrums have a need for prepared foods. So, the need doesn't change, but the menu does.

PG: Great point, John, and I'd like to hear what you and the others around the table have to say on the subject of menu planning and other challenges that might be nipping at the heels of the deli/bakery service equation.
 
Highbaugh: We are inventing all these new products and concepts for the consumer while aiming to create a whole new concept of merchandising to better meet this value proposition, but the missing link is that we're trying to do these new things out of the same box. In addition to new merchandising concepts, I'm also looking for ideas about better ways to sell — not just products, but also with equipment and fixtures.

Take cleaning deli cases, for example, which, for the most part, are not ergonomically friendly at all. But because 50 percent of foodservice is sanitation, let's design equipment that's easy to utilize and that makes our kitchens friendlier to clean — cases that the average person can easily access.

I've struggled with change, and know it's not easy. But for all the talking I've done with suppliers, in the grand scheme of things, I've seen very little change in this area. For instance, chicken wings are one of the hottest items going, but we're sticking them in the deli case. Where's the wing bar concept?

McDonald: Having been a merchandiser for years, we're not going to be able to reconfigure every case in America. I would become completely frustrated by the exact thing you're talking about, John. So, we designed our own packaging in 4-feet sections to present the food in a way that works best with shoppers. It's an issue of real estate, which needs to be portioned appropriately, along with logic in the equation.

Highbaugh: How do we take a specific vendor or brand name, and play it up with consumers with a feasible, effective concept? That's another big thing that I'd still like to see us get a better handle on.

Linda Wiggins: Our biggest concern is trying to deal with today while working with tools from 20 years ago. There is no quick fix, because in both deli and bakery, equipment is a huge expense, and it's quite a tall order to consider buying new equipment to replace existing equipment in so many stores. But as we move forward, we're doing a lot of things different[ly], including actually having a team that is evaluating every store — be it a remodel or a new, ground-up unit —  to determine what we want in that store before we design it.

In the past, we kind of "squeezed in" certain departments because they "fit" the old grocery-driven models of yesterday. We've now begun approaching our store design different[ly], based on how we want it. With a multitude of different formats, we've got to find a way to get all stores' implementation all the way through the pipeline to ensure that every store functions the way we want it [to] in terms of programs, menus and so on.

Highbaugh: It is challenging, yes, and you've got to have standards that don't stray from the margin, but I feel the key is having creativity in individual markets, so it can be somewhat different in each, but still efficient and profitable.

Mike Kemp: Another big key is people. Running bakery and deli operations inside of supermarkets requires us to maintain the mentality that we're a foodservice operation, yet we often concentrate too heavily on the center store. The competency factor's got to be there. Associates must know about the products, and have passion to be able to really sell them. They also need to know about food safety, which, as everybody knows, is a real challenge. Training and education is the ultimate point of difference.

Tom Clark: To that point, our customers are looking for fresh, fully prepared meal solutions, and we're looking to "buy" that expertise with quality products that are consistent in all of our stores, regardless of the level of expertise. We are aiming to grow our company to the point where we can shift production in-house, but right now, we need the help.

Kemp: Our prepared foods program has been 20 years in the making. When we opened our first Hen House Market in 1989, I had to lay out a deli department with no past knowledge of hot foods programs. Initially, we had a full-fledged food court in one of our stores, for which we partnered with seven different franchises. We were just way ahead of the curve and subsequently determined that it wasn't financially sound. Ironically, that same store is one of our highest-volume prepared foods units to this day, and what we learned was that the menu builds the kitchen, and not the other way around.
 
Editor's Note: Stay tuned for Part II of PG's Annual Deli/Bakery/Prepared Foods Roundtable: Bringing Value to the Table, which will continue in the November/December issue with discussions focusing on planning, sampling, demo programs and more.