Today’s grocery stores are different from those of the past, and home meal replacement (HMR) is at the heart of this evolution. New research from Mintel reveals that 85 percent of Canadians have purchased prepared/made-to-order foods from a retailer that sells groceries in the last three months*, with younger Canadians aged 18-34 most likely (92 percent) to do so.
For many, HMR products are a viable alternative to dining in at or takeout from restaurants as one third (36 percent) of Canadian HMR consumers agree that prepared/made-to-order foods from retailers are as good as those from restaurants. Furthermore, HMR programs meet the needs of cash-strapped consumers with over one quarter (27 percent) of HMR consumers saying that HMR is a cheaper option compared to restaurants.
While stopping by the store to pick up a prepared meal is most common (87 percent), half (51 percent) of HMR consumers say they purchase prepared and made-to-order foods to eat in, rising to nearly seven in 10 (67 percent) HMR consumers aged 18-24. Grocery stores are the most popular (72 percent) HMR eat-in destination, followed by mass merchants (32 percent) and club stores (31 percent).
“It is no longer enough for home meal replacement to be just an extension of the deli counter. There is opportunity for grocery retailers to engage consumers as the foodservice industry does, with coffee shops serving as an example of a segment that has revolutionized itself and changed its value proposition to become a ‘third-space’ for people to meet, work, or just decompress. Home meal replacement is undergoing a similar revolution as it becomes more important for grocery stores to provide eat-in experiences that rival those of the foodservice industry. ‘Grocerants,’ the marriage of home meal replacement and restaurant, have become a point of differentiation for Canada’s grocers, providing a means to support more frequent traffic and greater margins in an industry where profits are notoriously tight,” says Joel Gregoire, senior food and drink analyst at Mintel.
Consumers are on the hunt for convenient mealtime solutions as two in five (42 percent) HMR consumers say they purchase these foods because they’re already shopping at the store, while one third (34 percent) say that they use HMR because they are hungry while out. What’s more, as consumers are most likely to say they purchase prepared and made-to-order foods because they don’t want to cook (44 percent), and 36 percent purchase them because they have no time to cook, it seems HMR is becoming a go-to option to take the stress out of preparing dinner. In fact, prepared and made-to-order dinners (82 percent) are the most common meal purchased by HMR consumers at retail, while 68 percent eat these items for lunch.
Snacking also represents a key eating occasion for the HMR category as Mintel research shows more than half (51 percent) of HMR consumers purchase prepared meals to eat as a snack.
“As consumers continue to look for ways to save time, foodservice satisfies an evolving need for convenience and grocers have taken notice. With convenience being the cost of entry for HMR, grocers need to take the importance of ‘quick and easy’ to heart. Grocers will need to increasingly invest in ways to make getting the foods they offer onto the plates of Canadians with the least amount of hassle,” continues Gregoire.
The increasingly popular meal kit trend could present unique opportunities for prepared and made-to-order foods, as one quarter (24 percent) of HMR consumers say they are interested in a meal delivery service from HMR retailers. Canadian parents in particular are a prime target for delivered HMR, as 31 percent of parents with children aged 6-11 say they are interested in HMR delivery service.
Finally, ordering prepared foods online from the local grocery store may soon become the norm for many Canadians, as one quarter (24 percent) of HMR consumers are interested in online ordering options, increasing to one third (33 percent) of consumers aged 18-34.
“Our research indicates that there are two big areas of opportunity for the HMR category, the first being meal kits. HMR kits can spotlight an assortment of ingredients offered in the rest of the store and potentially encourage shoppers to explore beyond their usual aisles. The second major opportunity is delivery. While historically delivery has proven to be a challenge for Canadian grocers from an operational perspective, the landscape is changing and more and more consumers, especially younger generations, have come to expect delivery options. This indicates the importance of integrating online ordering and delivery capabilities with grocers’ home meal replacement programs, thereby providing ‘store-to-door’ solutions for shoppers,” concluded Gregoire.
*Canadian consumers who purchased prepared/made-to-order foods at a store where groceries can be purchased in the three months ending August 2017.