February
20, 2008
By
IN 2005, meal assembly shops were the hottest trend in small
business, a concept taken on with gusto by mom-and-pop entrepreneurs. In
storefront and shopping-center kitchens nationwide, they sold millions of
uncooked entrees in freezer-ready Ziplocs and to-go tins, with stick-on
instructions for boiling, simmering, baking or stir-frying the contents into
quick dinners at home.
The concept boomed, as the number of stores mushroomed from four
in 2002 to 1,400 in 2007, almost exclusively by catering to women who wanted to
provide home-cooked meals for their families, according to the Easy Meal
Preparation Association.
The customers placed their orders online days ahead, paid about
$200 for 12 meals and donned store-supplied aprons to personally assemble each
dish at the site one or two times a month. They adjusted the recipes to their
families’ tastes, maybe leaving the chopped onions out of the enchiladas. They
often came with friends, sipped glasses of wine as they worked and treated the
two-hour assembly sessions as guilt-free nights out.
The loyalty of these wives and mothers landed meal assembly
companies on various lists of top franchises and hot new businesses throughout
2005 and 2006.
But growth in the industry has slowed sharply, long before
reaching expectations. Industry revenue, which two years ago was forecast to
reach $1 billion annually by 2010, is now projected around $650 million by
then, said Bert Vermeulen, an industry consultant and founder of the easy meal
association.
Some 264 meal preparation stores closed during 2007, Mr. Vermeulen
said, more than three times as many as in the previous year. He forecasts fewer
than 50 openings in the
It turns out that lots of people are simply not motivated to plan
so many meals in advance. The desire for last-minute convenience remains
powerful in
Finding themselves ill prepared to offer such convenience in the
context of a business model built on prescheduled two-hour sessions, meal
assembly owners are trying to find new ways to bring ready-to-cook meals to the
masses.
The typical customers “were women who enjoyed the time away from
the kids — getting out, having a glass of wine — because they felt good about
taking care of their families’ meals,” said Bill Byrd, chief executive of Super
Suppers, the second-largest franchiser in the business. “What we found is that
the market wasn’t as big as we thought it was.”
Super Suppers, which is based in
The majority of owners bring in less than $25,000 a month, or
$300,000 a year, in revenue, according to Mr. Vermeulen’s data. He figures that
is about $5,000 a month short of what they need to stay out of financial
trouble.
Book It N Cook It, an independent store in the
The Warners, retired insurance adjusters who spent two years
studying the industry before jumping in, say they underestimated the public’s
aversion to meal planning.
“People here have a grab-and-go mentality,” Mrs. Warner said of
Book It N Cook It did keep preassembled meals ready for walk-in
customers, but Mrs. Warner said that attracting foot traffic was difficult.
The industry is selling more preassembled uncooked meals. In 2008,
Mr. Vermeulen forecasts, store employees will assemble more meals than
customers will for the first time. In 2004, customers in prebooked sessions
assembled about 90 percent of all meals sold.
Dinner by Design, the third-largest franchiser, expects to get out
of the session business completely, said John Matthews, chief executive of the
company, which is based in Grayslake, Ill.
Dinner by Design renovated a store in
Mr. Matthews, who came to meal assembly after building sandwich
and pizza franchise companies, hopes to copy the model throughout the chain.
“There’s a huge market that is not going to book a session,” he
said, including his wife. “She wanted to know why we don’t have drive-through
windows.”
Deeelish (yes, three e’s), based in
The FedEx program is a small part of Deeelish’s more than $1
million in annual revenue, said Jeff Stevens, a co-owner. But he expects
corporate deliveries, in which office workers preorder meals to take home, will
account for half of sales by the end of the year. Deeelish trucks fresh (not
frozen) meals to commercial refrigerators it has installed in three office
buildings so far.
Not everyone thinks that preassembled meals will be the salvation.
“We think a lot of the rush to change has been from lack of success with the
core business,” said Erik Ginsberg, referring to the sessions. Mr. Ginsberg is
president of a
Average annual sales for all his nine stores — called Let’s Dish,
although independent of that franchise — is about $1.3 million, Mr. Ginsberg
said. About 85 percent of sales come from traditional session customers, a
percentage he expects will shrink but remain the majority of business.
Dream Dinners’ stores rely solely on preordered meals, mainly
assembled by session customers. Darin Leonard, the chief executive, argued that
his competitors blundered in chasing the grab-and-go business, which he says
turned their $200-a-month session customers into $50-a-month pickup customers.
Despite moving toward pickup sales, the industry strives to set
itself apart from fast food. Mr. Byrd of Super Suppers pointed out that his
meals were healthier than most takeout fare and cheaper than those in casual
restaurants. That’s true even if Mom had nothing to do with making them.
END