« December 2007 Table of Contents Pin It

Trend Watch: Meals made easy

Meal-preparation industry prime for explosive growth

Seafood can be a popular choice at meal-prep centers
    across the country. - Photo courtesy of Dinner Me Quickly
By Lauren Kramer
December 01, 2007

The "What's for dinner?" question has been the bane of many a working parent. As the stressors of dual-income families continue to mount and their free time diminishes, many are welcoming the 1,450 meal-preparation stores that have opened across the country.

Typically, customers select meals from a list of dishes that rotates on a monthly basis. They make an appointment for a cooking session, and follow a recipe with the convenience of ingredients that have already been chopped, diced, cut and peeled. The customer brings the meals home to refrigerate or freeze for later use. The meal-center formula appeals to busy families by eliminating the need for menu planning, grocery shopping, food preparation and cleanup.

The industry has grown dramatically since the first business opened in 1999.

"In 2003 the industry took off, with the most dramatic growth occurring between 2003 and 2007," says Bert Vermeulen, founder of the Easy Meal Prep Co. in Cheyenne, Wyo.

There were approximately 1,200 meal-prep stores in the United States as of January, and the industry is anticipated to grow at a steady pace, according to the International Association of Meal Prep Businesses (IAMPB) in Oak Creek, Wis. The industry is growing so fast those numbers have been bested by one company. There were only four Easy Meal stores in 2003, with annual revenues of $7.2 million. Today, total revenue is at $370 million with 1,450 stores, and by 2010 it is expected to jump to $629 million and 2,400 stores, according to company figures.

According to Easy Meal, seafood is the fourth-most popular protein in the meal-preparation industry, after chicken, pork and beef (the IAMPB doesn't collect statistics).

"The meal preparation businesses have a tendency toward healthy eating, and seafood is an important part of that," Vermeulen says.

At The Prep Kitchen in Freeport, Maine, two out of 14 monthly menu options include seafood, with dishes such as Quick Tilapia Parmesan, Shrimp Scampi and Salmon with Orange Glaze. Seafood recipes are becoming more popular, says Wendy Wren, company owner.

"I usually have one tilapia fillet recipe and one other seafood - salmon, tuna or shrimp - each month, and my customers are becoming more comfortable with it, especially cooking tilapia because that's not a local fish. Familiarity brings confidence," she says.

The seafood dishes serve a segment of Wren's customers who don't eat chicken, beef or pork, "mainly non-vegan vegetarians," she says.

Nadine Johnson, owner of Sous Kitchen in San Carlos, Calif., agrees, though at her store seafood is as popular as other proteins. Two of the top 10 most popular dishes at the Sous Kitchen are seafood, says Johnson.

However, the cost of seafood sometimes limits Johnson's offerings. "It could be [our location] that things are more expensive," she admits. "We try to price by entrée, and if the seafood costs more than $7 per pound, I just can't offer it on my menu. We would love to offer ahi tuna steak, for example, but we can't. We haven't been able to find a local source that can give us the quality we need for the price we need to pay. So instead, we offer shrimp, tilapia, salmon, lobster, sole and cod. Most of our fish is frozen, but the salmon is fresh."

At Victoria's Kitchen in Wheaton, Ill., owner Vickie Hankes encounters the same challenge. "As much as I love fresh fish, I find it cost-prohibitive to work with, and issues with deterioration, leading to waste, leads me to use other proteins," says Hankes.

"Yes, I can purchase frozen fish fillets, but none are up to my taste and texture standards. My business is all about organic and natural products, so it can be difficult to source fresh fish with no added preservatives at an affordable price."

Marcia Hales, CEO of My Girlfriend's Kitchen, a national chain based in Salt Lake City with 43 franchises, sources most of her products through Sysco, though some of her locations use local seafood purveyors.

"We calculate food cost based on our costs in Salt Lake City," she explains. "We make a suggestion as to retail price, but each franchise location has the ability to set their own prices. Typically, our food cost runs anywhere from 35 to 40 percent, depending on the dish."

The average meal-preparation store has an ingredient cost between 40 and 45 percent of revenues, says Vermeulen. "Thus, the markup is between 2.2 and 2.5 times the wholesale food cost from the foodservice supplier. For a restaurant, the equivalent ratios are 30 to 35 percent food cost, which equals a 3 to 3.3 multiplier."

The availability of seafood in Hales' stores depends on location. "We have 14 menu items a month, and usually at least one contains shrimp or seafood," says Hales. "But based on the region and eating habits in that area, we make available a number of items for particular stores."

However, the cost of seafood makes it a challenging protein to work with, says Hales.

"We used to run a lot more salmon than we do now, but in some parts of the country it's incredibly expensive. Still, some of our stores will put it back on the menu, despite the price, because if it's really appealing, it brings customers in. So it's a double-edged sword."

My Girlfriend's Kitchen offers menu items with catchy names, such as the Savory Fisherman's Horseradish Crusted Salmon, Parmesan Tilapia On My Mind and Shrimp Alfredo on the Bayou. For cost-effectiveness, the company purchases flash-frozen seafood products like tilapia "because we've got customers asking for it. The popularity of our seafood varies by store and region, depending on the customer base they cultivate at a particular store," Hales says.

Unlike the restaurant industry, which can have substantial shrink, in the meal-preparation business there is virtually none, she says.

"Anything not purchased by the end of the week is assembled and available for people to purchase out of the freezer," Hales explains. Her company offers Web tools that allow storeowners to manage their food inventory.

The meal-preparation industry is growing, but it's barely scratched the surface, Hales insists. "There are still so many people who haven't heard of meal assembly. We're still in the infancy stage of educating the general population of what we do and how it can make their lives easier and better."

 

Contributing Editor Lauren Kra m er lives in British Columbia

 

Featured Supplier

Company Category