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FE&SEditorial Archives2006June — es — E&S Segment: Spotlight

Super Foodservice at the Supermarket

As supermarkets have evolved into convenient destinations for time-strapped customers to grab high-quality prepared foods to enjoy at home, store operations have increasingly required a variety of versatile equipment pieces to support their expanded service and menu offerings, and to market their products successfully.

The grocery store/supermarket concept has been around since its 1930s debut in the United States, providing neighborhood residents with a one-stop location to purchase food and other types of household staples. By the 1980s, though, the supermarket exhibited close to zero revenue growth, and was somewhat stagnating as a concept. At the same time, rising household incomes fueled by a tendency for both spouses to work outside the home left many consumers with less time and energy to buy ingredients and prepare meals. Although their time was diminishing, and still is, consumers’ desire to enjoy high-quality, hot prepared meals at home remains steady. These factors served as the ingredients that led to the creation of the concept most people in the industry have come to know as Home Meal Replacement, or HMRs.

It made sense for supermarkets to become involved in providing HMR service for numerous reasons, the most obvious being “give the consumers what they want.” Supermarkets have the space and all the ingredients necessary to provide HMR service. In addition, they hold an advantage over restaurants and other take-away meal locations in that they carry the staples that shoppers might need at the same time they’re picking up a prepared meal to take home. Considering the bottom line, margins for supermarkets can be as low as 3 percent, and rarely rise above 15 percent, but HMR margins hover between 125 percent and 130 percent, according to one industry source, helping provide the growth that supermarkets need to survive.

Unlike other industry trends, HMR service is definitely not a fad. More and more types of markets offer HMRs as more and more customers choose to buy them. It is estimated that now prepared meal expenditures at supermarkets (not including convenience frozen foods) may be approaching $20 billion a year, based on a historic growth rate reported by the Census of Retail Trade that has been tracking the sales of prepared meals at grocery stores since 1992.

Bret Olson, general manager of the supermarket division at Tacoma, Wash.-based dealership Bargreen-Ellingson, works with both large, national supermarket chains and smaller, local stores to provide equipment solutions for various home-meal replacement programs. “Most stores involved in HMR service have hired their own experienced chefs who develop menus that will appeal to the particular demographics of their consumer base, and those professional chefs already know about equipment,” Olson says. “They come to us for advice and suggestions about the equipment that could be used for new menu programs. For example, when a chef wants to add a hot sandwich program in a store and wants to move beyond using a microwave, specialized compact ovens that provide rapid cook times, and utilize both infrared and microwave technologies to provide heating and browning capabilities, are a great solution for a supermarket location.”

Sous-vide rethermalizers, designed and custom-manufactured by Bargreen-Ellingson, were the solution for a large supermarket chain’s hot soup program. The rethermalizer heats and holds soups provided from a food distributor and delivered in plastic bags. Staff can easily restock out-front soup kettles using the bags that the rethermalizers hold in hot water baths.

Out-front gas-fired ovens have also become popular equipment additions for some supermarkets’ menu support, according to Olson. “Besides the eye-appealing focal point provided by these types of ovens, they are also more versatile than some operators know. The ovens can help produce high-quality sandwiches and menu items such as prime rib and pizza,” explains Olson.

The real-life facts behind the creation of New York City’s D’Agostino’s Supermarket chain sounds like a Hollywood script portraying the quintessential New York City hard-won success story. Two young immigrants, Nick and Patsy D’Agostino, came to New York from Italy in the 1920s seeking a better life, and worked for the next 10 years as pushcart peddlers, mill workers, and learning the butcher trade — whatever they could do to earn money. In 1932, the pair pooled their resources and opened their first small grocery store on the Upper East Side of Manhattan, offering groceries and baked goods under one roof, as well as home delivery of phoned-in orders for local residents, which were unusual features for a market at the time. In the ensuing decades, as D’Agostino’s expanded its market offerings and locations, it earned a reputation as one of New York’s most popular grocery stores.

Today, second- and third-generation D’Agostino family members own and operate the chain’s 23 New York locations.

In 2003, D’Agostino’s used its relocation to a ground-level commercial space within a new apartment building to open a prototype store that includes its “D’Ag Fresh Market.” With an eye to the demographics of the neighborhood, including Columbia University students and faculty and many professionals who live in the area, the D’Ag Fresh Market focuses on fresh foods, such as produce, fresh meats and seafood, baked goods, prepared foods and deli items. The store devotes half of its 7,000-square-feet to marketing these fresh offerings, which are generated by a new equipment battery. Overall, this location features a revamped footprint that groups the fresh market-style foods in the front of the store, with staple aisles found in the back section. “The store design layout makes it fast and convenient for customers to run in for fresh produce and home-meal replacement items without having to pass through long aisles of staple products, if they don’t need to do that type of shopping,” says Ali Khan, store manager.

Bountiful fresh produce displays greet customers upon entering the store, with upright air-curtain refrigerated display cases along one side holding pre-made salads, dressings that require refrigeration, wrapped packages of peeled and sliced vegetables, and plastic containers of ready-to-eat fruits.

Colorful marketing “danglers” designate some certified organic produce sold here.

Key E&S for Supermarkets

- Combi ovens
- Convection ovens
- Rapid-cook ovens
- Cook-and-hold ovens
- Microwave ovens
- Gas-fired hearth ovens
- Tabletop steamers
- Fryers
- Ranges
- Char-grills
- Tilting skillets
- Rotisserie ovens

- Reach-in refrigerators
- Walk-in refrigerators
- Walk-in freezers
- Refrigerated glass-front display cabinets
- Refrigerated self-serve reach-in display cabinets
- Refrigerated air-curtain displays
- Hot-holding self-serve displays
- Hot-holding cabinets with drop-in wells
- Custom refrigerated carts with drop-in wells

- Sandwich tables
- Slicers
- Mixers
- Scales
- Cellophane and butcher paper dispensers
- Tongs
- Knives
- Butchers’ band saws
- Rolling carts
- Ceramic platters
- Flat-screen display monitors

The gourmet deli service area on the other side of the store includes glass-fronted display cases to hold prepared salads and entrée items, usually about 36 different choices provided by a local gourmet kitchen, in ceramic platters. This area also features one reach-in refrigerated case that stocks pre-prepared sandwiches. A custom-built, electric heating unit holds four drop-in stainless wells for self-service of daily soup offerings. Three stations behind the counter, each equipped with high-end slicers, scales, knife holders and sandwich worktables, support the full-service deli area. Also in this area, staff can access a microwave and panini press to heat and grill menu items.

Simple, rotisserie-grilled chicken was the first home-meal replacement offering to appear in the supermarket, and has been a popular item for more than 15 years, according to industry expert Ed Monte, who as then-president of Queens, N.Y.-based Global Monte Equipment Distributors, provided equipment for D’Ag Fresh Market and helped with the store’s redesign issues. Monte, who began his career in the wholesale meat business, moved into equipment distribution with his company Global Monte. Although he sold the company, now called Global Food Equipment Solutions, he remained with the organization as a salesman and consultant, and continues to work advising and supplying many area supermarkets with necessary equipment for their store expansions and upgrades.

Just across from the deli area, a vented chicken rotisserie oven under a hood is stacked above a reach-in hot-holding cabinet for prepared chickens and side dishes. The hot-holding cabinet has three separate digitally controlled hot areas to accommodate holding temperatures needed for different food items. Just behind the rotisserie and hot-holding cabinet, a versatile, double-stacked convection oven supports the heating and preparation of entrées such as chicken or meatloaf and side dishes including pastas and rice. Staff also use the convection oven for baking of fresh bread dough and for some of the other bakery products offered at D’Ag Fresh Market.

“Creative use of floor space for stations, equipment and placement of a necessary venting hood was a challenge at this D’Ag location because of the limited parameters of the available square footage of the store,” Monte comments. “This tends to be true of many supermarkets located in an established urban neighborhood as opposed to suburban locations, where space build-outs may not be an issue. In smaller spaces, the use of versatile, compact equipment such as combi ovens, which are capable of preparing up to 85 percent of menu items offered for HMR customers, as well as the ability to provide customized equipment pieces, contributes to the efficiency and success of store home-meal replacement programs.”

Sushi rolls are also a trendy, ready-to-eat offering found in supermarkets in many locations today, and although proper service requires a knowledgeable on-site chef, the footprint and equipment needs for this popular revenue-builder are minimal. At D’Ag, a small worktable, rice cooker and sink behind a refrigerated reach-in display for prepared sushi rolls in clear plastic-topped containers support daily on-site preparation of ready-to-go meals. Other equipment found in this area includes a custom-built olive cart with drop-in stainless wells and tongs for self-service, and a small bakery counter with refrigerated self-serve cases for some cakes and pies as well as a slicer used for artesian breads.

Monte recently worked on a supermarket expansion project with Bart Castellano, owner of Meats Supreme, a small grocery chain with five locations in Brooklyn, N.Y., and one soon to open in Florida. Castellano was pleased with the growth in his business provided by the addition of prepared foods for his market’s customers, so he acquired the store next to his when he decided to expand his busy Bay Ridge location to better support HMR menus and provide space for expanded gourmet offerings.

With a $1 million renovation, the new Meats Supreme Gourmet Marketplace includes a 400-square-foot back-of-house kitchen adjacent to the pre-existing butcher room, equipped with a combi oven, two open fryers, char-grill and two six-burner ranges, and a through-the-wall rotisserie, custom-built with glass on the front and back walls to provide customers with a “peek” into the kitchen. The kitchen supports the preparation of all kinds of deli salads, antipasti and other menu items that can be purchased for meals at home, as well as daily hot entrée specials, held at one end of the new 30-foot deli showcase.

Meats Supreme Gourmet Marketplace now has the space to offer gourmet food items from around the world; more fresh produce displays; and tiered, refrigerated display for self-service meats as well as a full-service meat counter with a refrigerated, gravity air circulation display case to keep meats fresh and moist. In a trendy marketing move, flat-screen televisions installed in the store are tuned to cable television’s Food Network channel, inspiring customers as they shop.

The use of flat-screen displays for marketing purposes in supermarkets is a developing trend. Reportedly, manufacturers are developing supermarket scales, for example, that include a built-in front-panel flat screen to display product information, recipe ideas and cross-marketing with other store products.

Marketing techniques in general represent an evolving issue for grocery stores and supermarkets. Distinctive and informative graphics that emphasize a store’s unique brand, as well as aesthetic concerns in interior design finishes and displays that can work to create a unique identity for a store chain, have become increasingly important as the market moves away from the impersonal, factory-lit, warehouse-like atmosphere of past supermarkets.

Garden of Eden Gourmet Inc., a small, Manhattan, N.Y.-based chain of markets, uses wicker baskets and wooden barrels for displays extensively throughout their four — soon to be five — locations. “The wicker baskets that hold product displays and hang from our ceilings work to give our stores a distinct identity, as well as hiding ugly pipes and lighting fixtures in the ceiling,” comments Mike Mustaffa, owner of the markets, “plus, they’re all for sale to our customers.”

The motto at Garden of Eden is “temptation in every aisle,” which is certainly any customer’s experience at the store. Shopping begins outside, where colorful, plentiful produce displays draw the eye and are served by an old-fashioned hanging scale. Inside, more fresh produce displays lead to a stand-alone, custom wooden self-serve cart with refrigerated drop-in wells containing olives on one side and numerous prepared salads on the other with plastic containers and plastic utensils supplied for quick, grab ‘n go service. A full-service seafood station includes a fresh sushi prep and display area at one side, and the station manager will steam fresh lobsters for customers at no charge using a tabletop steamer.

The center of the store contains extensive bakery, fresh meat and cheese displays, with one 30-foot display containing an extensive variety of freshly prepared foods to take home. After opening two stores, Garden of Eden centralized its warehousing and food prep operations into one location in Brooklyn, N.Y. The warehouse features a 3,000-square-foot commissary kitchen, equipped with two double-stacked convection ovens, one roll-in rack convection oven, double fryer, two char-grills, pasta cooker, rotisserie, three six-burner ranges, slicers, mixers, multiple sinks, reach-in refrigerators and ample workspace thanks to stainless-steel islands. Freshly prepared foods and other supplies are delivered to store locations every day.

“It made sense for us to centralize food production in the commissary kitchen particularly as our off-site catering business grew, as well as to guarantee consistency in our prepared menus from store to store,” Mustaffa says. “In the city, our ground-level commercial locations have large, residential apartments located above them, and proper venting of any type of cooking equipment can become an issue for the building residents. With all hot-line cooking performed in our off-site commissary kitchen, we avoid any of those venting issues and simplify hot preparation of food items.”

Some new techniques in lighting for the supermarket, developed and used extensively in Europe and Canada for years, have only recently become available in the United States. One technique hinges on bumping up the vertical illumination levels in the store in unique, track-installed fixtures, making the appearance of fresh meats and vegetables “pop” with vibrant color, which the consumer may psychologically associate with enhanced quality and freshness. When installed throughout an entire store, products on all levels of shelving are equally illuminated, and labels are easy to read. “While installing these unique lighting systems may initially represent a high-dollar investment, their energy-saving attributes represent significant overhead savings in the long run, and overhead is always a big issue for supermarket operations,” says Monte, who has become involved in introducing the lighting systems in some grocery markets. “An added feature of these lights is their very low heat output, making them ideal in situations where the heat from lighting may be damaging to products.”

What E&S Should Bring to the Market:

“Most supermarket chains offering HMR programs have hired highly trained chefs to create and oversee menu production, and they know their equipment,” says Bret Olson, general manager of the supermarket division at Bargreen-Ellingson. “Quality and durability are the attributes those chefs look for. Also, equipment used on-site must be easy for staff to use and clean.”

“Equipment that has the versatility to prepare multiple menu items is a plus for supermarket operations that may want to add new menu concepts to their meal replacement programs,” adds Olson, “and similar to fast-food restaurants where customers want to be served quickly, equipment that can cook and heat rapidly may be necessary.”

“New display and lighting equipment that can enhance the marketing of supermarket HMR and product displays is of interest to operations today,” says Ed Monte, consultant and sales for Global Foodservice Equipment Solutions.

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