— Deborah L. Cohen covers small business for Reuters.com. She can be reached at email@example.com —
By Deborah L. Cohen
CHICAGO (Reuters.com) - The deeper the recession, the more consumers stay home, hunkered down in domestic cocoons. And accordingly, their desire for convenient meals that simulate an away-from-home dining experience on the cheap is picking up.
High-end restaurants, hurt by a fall-off in sit-down patrons, are responding to the call for increased take out and delivery; supermarkets, meanwhile, are offering more sophisticated ready-to-eat meals at reasonable prices. To remain competitive, these businesses are looking for makers of specialized packaging to step up their game.
Clumsy Styrofoam clamshells - increasingly legislated against in many communities - don’t really do the trick for filet mignon brought home from the fancy steakhouse. And grocery store customers want attractive containers that showcase the freshness of pre-made entrées at the deli counter while also holding up for reheating at home.
“Home meal replacement packaging - it’s required to do a bit more,” says John Burke, president of the Foodservice Packaging Institute, which represents makers of single-use packaging for restaurants and supermarkets. “It’s got to have better seals, it might have to have venting. The packaging typically has to be microwavable or ovenable.”
Last year U.S. foodservice packagers had estimated overall sales of $12 to $15 billion, says Burke, believed to have been roughly flat from the year earlier. A survey released in March by FPI showed that packagers were “cautiously optimistic” about 2009. Burke says the size of the home meal replacement market is difficult to pinpoint, but it currently represents only a fraction of the overall industry.
“It’s been a consistent area of growth over the past five years,” he says. In addition to recession-fueled at-homing dining, sales of fancy containers are getting a lift from aging baby boomers weary of cooking their own meals, as well as the younger, so-called “millennial” crowd obsessed with convenience.
“We have definitely, from our customers, experienced growing interest in providing solutions for this particular market segment,” says Emily Ewing, marketing manager for Kalamazoo, Michigan-based Fabri-Kal, the nation’s sixth-largest maker of thermo-form plastic containers and one of a multitude privately held companies in the industry.
Fabri-Kal, whose products include portion cups for salsas, dressings and other sides included in freshly prepared meals to go, does not disclose yearly sales figures. “It is absolutely a growing segment,” Ewing says.
Recession or not, the industry known primarily for disposable cups, plates and utensils will likely remain tuned in to the trend for more single-serve solutions that can go the distance, and increasingly, do so in a sustainable manner.
“People are putting a lot more thought into how they package things. It used to be a very commodity driven industry,” says Richard Feldman, founder of Los Angeles-based-G4 Packaging, an upstart producer of eco-friendly containers made primarily from sugar cane pulp. “It’s basically a show and tell venue - how pretty it looks, that’s very important.”
Feldman, a packaging industry veteran who worked to bring sustainable products to customers such as Whole Foods, says his latest venture - founded last January - has annual sales tracking at roughly $3 million and is showing strong growth, with end users that include the value-oriented but trendy Trader Joe’s chain.
“Our biggest issues are sourcing and making sure we have capacity to fill demand from customers,” he says.
Food suppliers that cater to the prepared food segment have high expectations for their packaging. Frankly Fresh, a large Carson, California-based producer of fresh and frozen foods, is banking on the reliability of sophisticated packaging to help launch a line of 32 freshly prepared entrees available in grocery stores.
Jambalaya, lasagna and other choices are designed to last 14 to 21 days with no preservatives, says company founder Robert Atallah, whose new meals are now being tested in three chains.
“We had lots of failures, a rough time figuring it out,” he says, noting the difficulties in maintaining proper temperatures for the meals.
Jeffrey Wolff, president of St. Louis-based Anchor Packaging, a large privately held food service packager, says the trend is likely to hold up.
“The prepared food side has been experiencing very good growth for us as well as the takeout. People have wanted to ensure that their customer has a package consistent with the quality of the food,” says Wolff. “It’s a constant challenge to innovate, to create new looks, new products that attract consumer interest and at the same time appeal to those price points that are desired.”