Prepared Foods Category Report: Fresh & Easy Introduces New Line of Mix & Match Prepared Foods; We Report, Offer Some Analysis and A Marketing Thought

A Fresh & Easy Neighborhood Market store employee checks the ingredients and code date on a package of fresh & easy brand fresh, prepared foods at the Los Angeles, California Eagle Rock neighborhood Fresh & Easy market. [Photo Credit: Los Angeles Times.]

Tesco's Fresh & Easy Neighborhood Market USA is introducing a new line of ready-to-eat and ready-to-heat fresh, prepared foods products designed to be mixed and matched in order to create what the food retailer says can be over 200 quick meal ideas for consumers.

The new prepared foods line features 30 different varieties of fresh pastas, sauces, meat entrees, vegetarian dishes and various kinds of side dishes which pair to create meals for two for about $10, says Mike Ainslie, Fresh & Easy Neighborhood Market's in-house company chef and the man who lead the team that created the new prepared foods items.

Fresh & Easy makes all of its fresh, prepared foods products at the company's central kitchen facility in Riverside County, (Southern) California. It then ships the ready-to-eat and ready-to-heat items to its stores in Southern California, Metropolitan Las Vegas, Nevada and in the Phoenix, Arizona Metro market region multiple times per week.

The $10 mix and match meals for two concept appears to be in part Fresh & Easy's attempt to target the young singles and couples market, which based on our observations and analysis makes up the majority of the fresh food and grocery chain's current customer base.

The mix and match meals for two concept also should appeal to empty nest retirees and seniors, since the foods are ready-to-eat or heat and are affordably priced.

However, based on our observations seniors don't currently comprise a significant percentage of Fresh & Easy's customer base.

We think this is largely because the stores have self-service checkout and don't take paper personal checks. A significant number of adults over 62 prefer full-service checkout, based on industry research. Additionally, according to studies done by the American Association of Retired Persons (AARP), adults over 62 use (and prefer to use) the highest percentage of paper personal checks, rather than debit or credit cards, for purchases at retail stores.

Of course the mix and match nature of the new preapred foods line also has utility for families of any size. In fact, because the meals are designed for two, a family of say four can buy two different combinations, say a pasta and side dish combo and a meat and veggie combo, and then share it all family style. Twenty dollars for four is still a reasonable meal deal. Plus there likely will be leftovers.

In fact, it would be a good idea for Fresh & Easy to do some marketing around the new line in that regard. Say offering a mix and match meal deal for a family of four using the 30 items, positioning it around a theme such as: "Family Style Eating at an Affordable Price -- Mix and Match Dinners for Four With Leftovers to Boot"

Doing so would be a good way to appeal to larger families (can do a version for six as well), along with encouraging larger single purchases (and a bigger market basket or total ring), in addition to using the "dinner for two theme." We call it "mix and match" merchandising and marketing.

Commenting on the new line of mix and match fresh, prepared foods, Fresh & Easy Neighborhood Market chef Mike Ainsle says: "We believe no one needs to sacrifice quality to save money and time," said Ainslie. "The new Mix-and-Match range (line in American supermarket speak) provides customers with countless restaurant-quality meals at incredible prices. With over 200 different pairings, customers can always find something new."

Below are a few examples of meals (including the prices) mixing and matching the 30 new ready-to-eat and ready-to-heat items offered by chef Anisle:

>Asparagus Parm Ravioli or Mushroom Tortellini & Mushroom Stroganoff Sauce - $5.98
> Sweet Chili Chicken with Chow Mein Noodles - $8.98
> Chicken Enchilada Casserole with Spanish Rice - $9.98
> Beef Bourguignon with Mashed Potatoes - $11.98
> Chicken Alfredo with Garlic Herb Fettuccine - $8.98
> Sweet and Sour Vegetables with Egg Fried Rice - $7.98
> Chicken Vindaloo with Yellow Basmati Rice - $9.98

In terms of the pricing of the seven new fresh & easy prepared foods items above, they are affordable but not any cheaper than similar fresh, prepared foods items at competing supermarkets such as Safeway, Vons, Ralphs, Stater Bros., Bashas, Wal-Mart's Marketside (Arizona), Raleys and others in the California, Nevada and Arizona markets, based on our pricing analysis.

All of these retailers and others in those respective markets are getting deeper and deeper into the fresh, prepared foods category. These retailers and others also have been offering regular deals on ready-to-eat and ready-to-heat products in their weekly advertising circulars, particularly Safeway, Vons and Ralphs.

Supermarkets like Fresh & Easy and the others are benefiting in the fresh, prepared foods category during the current economic recessionary period because consumers have cut back on the number of trips they make to restaurants and instead when they do buy prepared foods are doing it more so at the supermarket. [Read a just-released report from the National Restaurant Association on the decrease in consumers dining out at restaurants by clicking on the links in green: Full Release • Full Report]

The last month though has seen consumers cut back even on prepared foods purchases at supermarkets, instead buying more basic items and cooking more at home. Therefore, offering value-priced ready-to-eat and ready-to-heat prepared foods products is a good idea for supermarkets since it can allow them to capitalize more on the current trend in which consumers are eating out far less in restaurants of all formats.

In fact, recent data suggests in the third quarter of this year just ended, American consumers cut period on the quantity of food of any kind they purchases at retail. [For detailed information click on the links in green: Full Story • GDP Release.]

A restaurant-quality dinner for two or three purchased at the supermarket for about $10 is at least 50% cheaper than a similar dinner out at a restaurant, although at home you have to wait on yourself and don't get to enjoy the "dining out" experience. However, tough economic times call for such realities for most consumers.

We think it would be a good idea for Fresh & Easy and other food retailers to take their prepared foods merchandising and marketing a bit farther because of this "eating out less" consumer phenomenon, creating themes around the food items that allow consumers to have a restaurant dinner "out" at home, for example. Perhaps offer a free bottle of wine with a minimum $20 prepared foods purchase. Toss in four free plastic stemmed wine glasses with it as well and some nice white paper napkins.

Additionally, we suggest selling some "dining out at home" related items (and cross merchandising the items together in-store) with the prepared foods items. The related items could include desert items at an affordable price, various beverage tie-ins, an inexpensive white table cloth, a couple compact music discs and other items related to the eating out experience.

Its all about creating that "dining out at home" experience for the consumer, as well as creating add-on sales for the retailer.