Product Mix & Profit Drives
The HMR unit within a retail store provides many opportunities for profit growth, especially considering the lifestyles many people are having to juggle. There are numerous factors which play roles in the profitability of such operations, but the ingredient mix is arguably one of the most crucial in maintaining the consistency and value of the final products.
The use of these products is especially helpful in those foods which cater to the lower LSM markets. Foods such as tripe, large intestines, hooves and chicken feet are often considered off-cuts in higher LSM establishments, where prime, low-fat meat cuts are preferable. Due to the increasingly high costs involved in the latter, however, these are largely unaffordable to the majority of people living in South Africa.
The success of your HMR department depends on your ability to identify your market and provide what they need and when, at the right price of course. Once this is established, it becomes easier to utilise the right products and ingredients to ensure that the final product satisfies the need.
Retail Chef spoke to Sue Von Hirschberg – the Executive Chef from ingredient manufacturing company, Freddy Hirsch
– about the use of such products to increase HMR profits.
Q: Is there a large demand for products that higher LSM groups consider “offcuts” (such as chicken feet, tripe and gizzards) in the lower LSM markets?
A: Yes. It is very popular with the lower LSM groups as it is a form of cheap protein and is traditionally considered a staple diet.
Q: How can these ingredients be used to drive profits in an HMR department?
A: These lines are potentially good margin generators within the HMR department because they tend to be the cheaper meat cuts and are sought after by the lower LSM as a meal solution. For example, for many it’s about having the food already cooked, as they don’t have time to cook or don’t have freezer/fridges to keep food in. So for them it’s more about buying food on a daily basis. On the other hand, it’s only considered a delicacy by some in upmarket groups, especially foods such as pig/ox cheeks, trotters (hooves) and tripe.
Q: How can using products such as Freddy Hirsch promote the sale of these items?
A: Our “What’s Cooking” HMR range has been designed to ensure consistency for the consumer and operational convenience for the retailer. In this way the consumer gets to know what they are getting in terms of quality and standard.
Q: How important is it to make sure that your HMR units cater to the correct target market?
A: It’s crucial to understand who your market is, what they are looking for and when they are looking for it. Given the nature of the HMR product offering (shorter shelf life, high food safety considerations, etc) it is important to closely monitor trends, fulfil local demand and tastes, all whilst innovating with special dishes in a controlled manner so as to manage any waste effectively. There is really no point in making exotic dishes such as Thai chicken curry in an emerging market store where the local preference is for fried chicken.
Q: What are some of the things that need to be kept in mind when making HMR meals for lower LSM groups, bearing in mind that these dishes will need to be priced accordingly and still make a profit?
A: Don’t price yourself out of the market – make sure that you have a realistic selling price comparable with what is being offered in the local market. Prices need to be kept fairly low, as most of our HMR is supported by lower LSM groups. As always, pay great attention to hygiene – offal type foods tend to go off faster than normal proteins. Also, pay attention to presentation and portion sizes.
For more information on Freddy Hirsch products and the HMR “What’s Cooking” range, visit www.freddyhirsch.co.za