FreshRealm – which has just raised $32m to expand its nationwide fresh prepared meals operation – is bullish about the potential for ‘high quality, low effort’ ready to heat and ready to cook fresh prepared meals in the US market, but acknowledges the US market presents logistical challenges (the US has five times the population of the UK market but is 38 times bigger in terms of land mass).
“In the UK, which has one fifth of the US population, the fresh meal category is worth $6bn, so there is huge potential here, even though the markets are different,” CEO Michael Lippold told FoodNavigator-USA.
“You can build an operation close to London and ship the entire country, whereas in the US, you can’t supply the whole country from New York or Florida [with short-shelf life products]. So we’ve really looked at how the fresh supply chain can work in the United States, and we have figured this out, so we are building a national solution that has consistent capabilities across all four of our regional facilities [in California, Indiana, Florida, and New Jersey].”
‘Horizontally integrated supply chain’
He added: “Over the last 18 months, we've done a really good job of building a team of not just fresh food experts but fresh meal experts, a lot of them coming from the UK market where fresh meals are a huge category.
“We’ve also built what I call a horizontally integrated supply chain, so we have close partnerships with a lot of ingredient experts instead of making every ingredient ourselves.”
Ready to heat, ready to cook, and meal kits
The FreshRealm portfolio is split into three buckets, said Lippold: “We can offer our grocery retail partners ready to cook prepared meals [oven + stovetop ready in 20 mins], ready to eat prepared meals [microwave in 3mins], and meal kits [oven + stovetop ready in 20 mins], and we're the only company that's set up to do that nationally.”
Popular dishes include Teriyaki Glazed Salmon (ready to cook) and Chicken Pad Tai (ready to heat), which cater to consumers that don’t want to expend too much time or energy on cooking, but want something a little more elevated than a frozen meal, and a little less expensive than takeout.
Popular meal kits in FreshRealm’s lineup include Parmesan Bow Tie Chicken Pasta, Crispy Honey Dijon Pork, Garlic Butter Skirt Steak, and BBQ Grilled Steak with Creamy Cesar Vegetable (meal kits), which are great for days when you have more time, but don’t want to commit to an online meal kit subscription, said Lippold.
“I'd say meal kits are going to probably be 10-15% of this category, something you might have on a Saturday when you want to spend a little bit of time at the kitchen.”
Price points vary from around $6-9/serving – which is more than you’d typically pay for a frozen ready meal, but less than you’d pay for takeout or a sit-down meal at a restaurant, he said. “Plus there’s no clean up afterwards.”
Building a destination area at the front of the store for fresh meals
Retailers, claimed Lippold, are increasingly looking to differentiate themselves through their private label offerings, and having fresh prepared meals in a destination area near the front of the store is a great way to do that.
When it comes to shelf-life, he said, most retailers want eight to 10 days of shelf life, he said; anything longer and consumers start wondering – rightly - just how ‘fresh’ it is.
“I think COVID has accelerated interest in the fresh meals category. A lot of people in the US felt that at some point we would move towards more of a UK grocery shopping experience, where you walk into a Tesco and you’re kind of shopping by meal, whereas in the US you're still shopping by ingredients.
“Having this destination area at the front of the store allows retailers to offer their consumers an elevated daily meal experience where you can go in and grab something on your way home – and everyone can still pick their own meals and flavors - instead of going to a QSR or ordering food.”