Today's dinner customers are making a special request, and whoever can fulfill it — be it restaurateur or grocer — will be rewarded handsomely. Time-pressed and cooking-shy consumers (many of whom have discretionary income to burn) crave freshly prepared take-home meals that are a step up from traditional fast food. They want the fruits of a chef's labor, but they want it without a wait. And they want to enjoy it in their own home — hence the coining of the term "home meal replacement" (HMR).

A slew of recent studies confirms that the HMR trend is no fad. Consumers opt for a takeout dinner at home a whopping 61 percent more often than they did 10 years ago, whereas they choose to eat dinner in a restaurant 4 percent less often, according to a 1995 NPD Group survey. "Time poverty" is the catalyst, and the underpinnings of the take-home trend aren't likely to change soon. In two-earner families, neither worker has the time, energy or desire to cook (or clean up after a meal). And while burger and pizza chains once satisfied Americans' need for carryout, fast-food ennui has set in. Customers now seek ever-changing variety and freshness for dinner.

From the restaurateur's perspective, supplying such fresh food on demand isn't easy. Despite oodles of hype about the size of the HMR market, so far the trend has bred few company success stories in terms of execution and profits. "Selling takeout food, especially if it's not for immediate consumption, is one of the hardest things to do in the food business," says Marcia Schurer, consultant and president of Culinary Connections in Boulder, Colorado. She outlines a number of challenges, such as how to ensure the fresh taste and attractive appearance of high-quality foods that may be purchased for consumption later that day, or kept in the refrigerator and reheated several days later.

So far, the HMR gold rush is a two-buggy race between some specialized restaurants and some select supermarkets, but other players could be sleepers for success. It's too early to pick winners and losers, but it is possible to track the HMR troop movements.

HMR front-runners

Boston Market is the restaurant brand name most closely identified with HMR. The Golden, Colorado-based purveyor of quick homestyle meals to go is certainly the only national player so far. Responding to strong demand and using a regional-developer system that opens stores quickly, the chain has launched nearly 1,000 units in the last six years.

In August, Boston Market announced it will accelerate its expansion pace with plans to open a whopping 2,700 more stores over the next five to seven years. Achieving that lofty goal would give Boston Market a coast-to-coast presence that would allow it to leverage national television advertising.

Although Boston Market's hasty expansion has been a remarkable story, there are some chapters left to be written. For one, the chain is so young that it has never had to weather an economic downturn. Would consumers consider HMR an unaffordable luxury during an economic recession, or would it instead represent an economical alternative to casual dining? Second, because the company has been strategically focused on unit expansion, it has entered into complex financing arrangements with its developers that make both its corporate and unit-level performance somewhat hard to judge.

Another issue: the menu. Because many consumers want foods that they would cook themselves if they had the time, Boston Market's menu leans heavily toward American comfort foods. But the HMR market is likely to take a turn for the ethnic and adventurous soon. "We've only scratched the surface in terms of HMR variety," says Schurer. "There are endless combinations of foods that can be developed and offered for sale—an entire world of exciting flavors, grains, vegetables and meats we can use."

New HMR players want to go beyond Boston Market-style carryout, in hopes of stealing more grocery sales from supermarkets. Open for less than a year in Dallas is Eatzi's Market and Bakery, an 8,000-square-foot cross between a gourmet grocery store and take-home deli/restaurant. The Eatzi's experiment has attracted plenty of customers and attention. "It's going terrific, but it's too early to tell," says Anthony Tedesco, former director of Eatzi's for Brinker International, which is behind the project, along with restaurant-developer Phil Romano.

In a daring thumbing of the nose at labor costs, Eatzi's prepares everything from scratch and has dozens of chefs on staff to prepare upscale takeout dishes, including swordfish, sushi and osso buco. "Given the choice, consumers will opt for fresh," says Tedesco, explaining the rationale for such labor-intensive food. While Brinker is known for its sit-down restaurants, Eatzi's is geared for take-home. "There's a new segment of customer who wants restaurant-quality meals at home," says Tedesco. "And this consumer is convenience-driven."

Not all restaurant HMR experiments have paid off. In the Nashville area, Cracker Barrel Old Country Store Inc., known for roadside family restaurants, experimented with three Corner Market units that focused on HMR — and was humbled by the complexity of the venture. Cracker Barrel recently closed the units. Meat loaf, chicken and dumplings, and other homestyle favorites for take-home dining sold quite nicely. But because so much high-quality food had to be available for carryout at all times, corralling labor costs and food waste proved difficult. "We came to the realization that a brand-name personality like Cracker Barrel cannot necessarily translate to another environment without customer confusion," says Judy Donovan, vice president of new business development for the company. "There is great opportunity in HMR, but any future endeavor will not feature the Cracker Barrel name."

Supermarkets try to snag their share

A visit to Central Market, an upscale supermarket with adjoining cafe developed by regional grocer H-E-B in Austin, Texas, reveals a clientele that is every food retailer's dream. Shelves are stocked only with items needed by upmarket customers who value time and value-added gourmet foods more than money. There is a nod to special diets and environmentally conscious buyers as well. Above all, Central Market's vast assemblage of gourmet prepared foods speaks directly to the HMR trend. "Time is the commodity we're all working with, and we're taking convenience to the next level," says Central Market's Nona Evans.

Cooks at the adjoining Central Market Cafe use in-store ingredients to prepare meals that can be eaten on the premises or picked up for carryout at a separate window. On various days, the menu includes such adventurous items as grilled-shark tacos, pecan-crusted trout and vegetarian jambalaya. The cafe serves as both a neighborhood restaurant and a showcase for items customers can then pick up on the grocery side. Evans explains the two-tiered marketing approach: "Here it is if you want to make it yourself; here it is if you want it prepared."

Central Market executives describe the two-year-old store as mildly profitable, but they don't break out sales figures for the unit, which is still considered something of an experiment.

While supermarket HMR leaders such as Central Market test prototypes that set new records for freshness, the average grocer is still trying to retrofit a supermarket deli with a foodservice component.

A huge hurdle for most supermarkets is layout and design. Customers generally don't feel they can get in and out of a grocery store with prepared food half as fast as they can from a restaurant. Moving delis to the front of the store and employing separate checkouts have helped in some instances, but bolder moves may be afoot in supermarkets of the future.

Consultant Howard Solganik of Solganik & Associates in Dayton, Ohio, has designed a supermarket blueprint incorporating HMR that would feature separate doors and storefronts for several take-home concepts at the front of the supermarket — for example, a bakery, a pizza shop and a rotisserie operation. Customers could enter each concept from the parking lot, buy prepared food and run. Or they could continue walking through to a more traditional supermarket behind the eateries.

Development of such convenient supermarket facades could cure the "out of sight, out of mind" problem supermarkets face in competing with restaurants.

There is strong evidence that even mainstream supermarkets will be gunning for more foodservice dollars soon. In September, close to 1,200 grocers and wholesale retailers gathered at the first-ever "MealSolutions" conference in Phoenix (sponsored by the Food Marketing Institute, located in Washington DC) specifically to discuss HMR topics and to test new manufactured prepared foods. Workshops such as "Capitalizing on the Foodservice Consumer" and "Catering and Home Meal Delivery Options" were packed with grocery executives eager to learn about HMR's logistical issues.

HMR dark horses

In the near future, top spots in the battle for the HMR dollar may not be limited to supermarkets and HMR restaurants, as other players start to enter the field.

Convenience stores poised. Although prepared-food execution at convenience stores has traditionally been spotty, the name "convenience store" says it all. Those stores already have the suburban street-corner locations that new HMR players would kill for. It remains to be seen whether convenience-store giants such as Circle K, headquartered in Phoenix, which is test-firing an HMR concept in Phoenix called Emily's, can provide quality food to customers in their neighborhoods.

Commercial cafeterias could thrive or die. In the South and parts of the Midwest, a cafeteria is a favorite place to go for homestyle cooking at lunch, dinner or after church on Sunday. Because cafeterias feature freshly prepared homestyle food, their menus should theoretically dovetail nicely with the HMR trend.

Although cafeteria players such as Morrison's Restaurants Inc. (Atlanta) and Luby's Cafeterias, Inc. (San Antonio, Texas) are known for scratch cooking, customers don't necessarily perceive them as hip to the convenience trend. But those dinosaurs could spring to life and leverage their names into HMR sales. Morrison's has launched Morrison's Fresh Cooking, Inc., a speedier concept, and Luby's has expanded its "Good Food to Go" campaign with separate takeout windows at existing cafeterias.

If cafeterias don't get the hang of HMR, customers of baby-boom age and younger could one day pronounce cafeterias dead because of irrelevance. With their customer base aging and their point of difference — scratch homestyle foods — being copied by fresher HMR concepts, cafeterias' very reason for being could be eliminated.

Business and industry foodservice. Because HMR customers want to buy time more than anything, an on-site employee dining room that also offers take-home dinners to workers has one undeniable advantage: It represents zero-stop shopping to every employee.

Witness the upscale employee lunchroom on the campus of Oracle Corp. in Redwood Shores, California. The facility, called 300 Market, now goes beyond its original mission of providing employee lunches. It offers prepared entrees, bake-off pizzas and even some grocery staples available for delivery to employees' offices near the end of the day. Oracle employees can even place food or grocery orders by e-mail — doesn't get much more convenient than that.

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