Innovations in Home Meal Replacement and Deli combine with South African favourites and global influences to provide a blend of the new and the traditional

By Ann Baker-Keulemans and assisted by Linda Wilkins

Today’s consumer has many reasons why the Home Meal Replacement (HMR) and Deli counters are their best friend. Saving time, a welcome respite from meal preparation, and simply having someone else do the hard work are still primary drivers of HMR and deli sales. There are new requirements, however, and consumers are increasingly less willing to compromise on these. Free-range, ethical sourcing, ingredient listings, food safety, and recyclable or recycled packaging have become part and parcel of HMR. This doesn’t mean to say comforting but perhaps not so healthy options aren’t still part of HMR – the selection has expanded, rather than replaced. That being said, consumers are increasingly knowledgeable about nutrition, want to know exactly what they are consuming, and expect an offering that is healthy, nutritious, tasty, and appealing to the senses.

The global HMR market is expected to rise at a considerable rate between 2023 and 2028, driven by the Covid-19 pandemic, online sales, the development of new innovations in ready-to-eat and ready-to-cook, and rising prices (https://www.marketwatch.com/press-release/home-meal-replacement-hmr-market-2023-industry-analysis-opportunities-technology-top-players-and-growth-forecast-2028-2023-01-14).  

Retailers and supermarkets are indicated as key factors in this growth, most notably due to the availability of multiple brands, menu options, and pack sizes (finance.yahoo.com/)

A challenging local landscape

A highly competitive market makes it challenging to find an advantage and a competitive edge. Quality and value for money are essential, and so is catering to one’s target market. Loadshedding is one of the biggest challenges in South Africa right now, although it also brings in customers who aren’t able to or don’t want to prepare meals while the power is off.

In the broader picture, there are many challenges in South Africa for retailers to navigate. Rising raw material costs, packaging costs, and fuel and energy costs, as well as supply chain/cold chain issues due to loadshedding and road quality all impact on the running of a store. The extra costs can’t all be passed onto the consumer, so stores have to absorb some of it. HMR and Deli has some high margin offerings that help to make these departments profitable, but competition is fierce, and if prices rise too far beyond the market average, you’ll lose customers.

Flexible and agile operations solutions paired with innovative technology and developments in production, packaging, and delivery processes can help mitigate these difficulties to a certain extent, but they also require a financial and R&D investment.

HMR and deli drivers

Convenience remains one of the most significant drivers of HMR and deli sales. Time is at a premium and this is unlikely to change – working parents need to feed themselves and their families, young entrepreneurs with side hustles and an active social life still want to eat well, professionals and labourers alike gravitate to the deli come lunchtime, and the SAHM (stay at home mom) needs all the extra time in the day she can claw back by farming out mundane tasks like cooking and food prep.

Online shopping has had a meaningful impact on this market as it removes the need to physically go shopping. Time-constrained consumers can browse during their lunchbreak, make purchases online, and set a delivery date and time that works for them. In this instance, communication with your consumers is crucial – they can only shop for what they know about. Sharing news of promotions and new product launches with the relevant market is fundamental to your online success. Online shoppers can be reached through a combination of traditional and digital marketing methods – consumers still look at leaflets, especially when they are themed, with attention-grabbing visuals of HMR and deli products, and recipe and serving ideas.

Product innovations and international trends change the face of HMR and deli, and consequently the drivers become more complex. Many consumers are looking to recreate international dishes or try new cuisines. HMR and deli offerings provide an easy and hassle-free alternative to spending hours in the kitchen perfecting new skills. Interesting flavour combinations, a good balance of the traditional and the exotic, and new offerings complimenting old favourites are necessary additions to your product range to cater to these demands.

Vegetarian, free-from, plant based. Speciality diets including vegetarian, gluten-, dairy- egg, and sugar-free to name a few are on the rise. The cost of animal-based protein is becoming more prohibitive, resulting in some consumers looking for plant-based alternatives. According to NGO ProVeg South Africa, local support for ‘Veganuary’ shows the plant-based sector is continuing to grow. More and more restaurants, food manufacturers and grocery stores are offering a bigger range of plant-based alternatives. According to ProVeg, which is the local NGO partner for Veganuary in South Africa, approximately 38 new plant-based products were released in the country this January, just slightly less than in 2022. Woolworths recently launched its new PlantLove range, which is a range of vegan products that include an HMR offer. Senior marketing manager at Woolworths South Africa, Daisy Masiangoako, says their partnership with ProVeg creates ongoing support for customers who want to continue their plant-based journey. Kauai also took part once again in Veganuary this year, offering several in-store and app specials, encouraging sign-ups through their newsletter, and promoting their 100% plant-based Smart Meals Plant Powered Plan. Manufacturers like Güdness Plant Based Deli, Infinite Foods, Outcast Foods, Simply Delish, Urban Vegan, OKJA, Red Espresso, Pesto Princess, and On The Green Side launched new and improved products or specials to invite South Africans to expand their thinking around food. Some of the new product launches around Veganuary 2023 included a range of plant-based ready-meal products from Pick n Pay.

Convenience, health and nutrition

As health consciousness rises, so too does the number of consumers who want convenience foods that are healthy and nutritious. Value meals are a big business, particularly in the deli. Meals that pack a punch in terms of satiety, nutrition, and taste are a go-to for many consumers. In this case, traditional, local, or comfort foods are best. Take seasonality into account too in order to lower costs and get creative with vegetables. As the cost of meat rises, consider reducing the amount of meat in your deli dishes, while adding protein-rich meat alternatives to bulk up meals. Remember that meat and bone broths are an excellent way to use up leftovers and food prep by-products, they’re also tasty and packed with nutrients. Just remember to go easy on the salt and fat and boost flavour using herbs and spices instead.

Eating as an experience

Experiential purchasing is a growing trend, and HMR and the deli lend themselves perfectly to an all-round sensory experience. Creating a memorable brand experience is key to retaining customers as HMR and deli continue to grow, and this means inspiring, delicious displays and quality, freshness, and satisfaction every time. This highly competitive space demands innovation, a fresh approach, and a keen understanding of consumer behaviour.

Merchandising and displays build HMR appeal

Story selling, creating, and meeting demand, and building a brand name are easy to achieve with the right packaging and labels, but this can be enhanced, or occasionally even created using innovative displays and clever merchandising. Consumers know what they want, but they can also be encouraged to try new products and make impulse purchases. Understanding your target market is key for the success of these strategies, which may include ‘market-style’ displays, customer seating or dining areas within the store, creative cross-promotions, and strategic product placement. In-store demonstrations and tasting tables have returned post-Covid, although with stricter health and hygiene protocols for the most part. This remains a popular way to encourage consumers to consider new products and drive impulse sales by adding smell and taste to the visual, or even including an interactive aspect of the buying experience. From new recipes and cooking tips to informational talks and tastings, food pairings, and competitions, the way consumers interact with food and engage in in shopper behaviour is evolving.

Innovations and trends in HMR

From extending the shelf-life of food offerings to product development, new flavours, and tempting displays, HMR and deli offerings are fertile ground for innovation, experimentation, and new product launches. While consumers demand convenience and expect quality, they also crave a strange mix of the comforting and familiar, but also the new and exotic. They also want easier to use products with a longer shelf-life, better bake stability, faster cook times, and more flavour. Exciting taste experiences and dishes showcasing international cuisines, such as Dr. Oetker’s Nice’nEasy Indian, are in as much demand as the Classic and Italian ranges from the same brand. Classic pizzas with traditional toppings remain unassailable, with Dr.Oetker’s Ital Pizza range including classic, minis, pizzinis, snack slices, pizetta, and family offerings. However more adventurous toppings, such as spareribs, peppers, and aubergine with hummus boast an equally loyal customer base.

Sustainable packaging

Safe, sustainable packaging is a serious consideration for a growing number of consumers. With the rise of online shopping, packaging that meets those criteria and which is also easy to transport is a must. Consumers also want to feel confident that the food they are about to heat and eat, or defrost and cook, won’t be contaminated by packaging that is not fit for purpose. Packaging that is better for the environment, leak-proof, maintains the integrity of the food contents and is aesthetically pleasing is the gold standard here.

At-home entertaining

HMR for upscaled dining experiences offers ease and convenience paired with sophisticated flavours and quality dishes. Consumers who have the budget and the desire for top-tier at-home dining, but don’t have the time to do it all themselves and, for whatever reason, won’t consider hiring a private chef or caterer, require an HMR solution that is elegant, tasty, and of the highest quality. It may be a niche market, but it is one that is important to cater for correctly in certain stores. This is also an option for regular HMR consumers looking for something special or celebratory.

Global influences on the local HMR and deli market

Food for health and wellness. Weight loss, fitness, and special diets are big factors in many HMR subscription services. Shakes are also popular, primarily amongst gym-going consumers and weightwatchers, but increasingly for the sick, elderly, and those unable to stomach solid food for whatever reason, too. These influences have filtered through to HMR.

Clean deli. Consumers are beginning to scrutinise their food purchases more closely. They want to know where it came from, how it was produced, what was added to it, and what it contains. Deli meats in particular are expected to be ‘clean’; no dangerous preservatives, no unethical processes, and no routine antibiotics.

Seaweed. While it’s unlikely this international trend will make its way ashore in SA too quickly, seaweed is a sustainable source of protein that’s packed with nutrients and is surprisingly versatile.

Spices. There’s a global rise in spicy foods, with consumers interested in both heat and flavour.

Climatarian diet. Much like the flexitarian diet, this way of eating is better for the planet. In this instance, the focus is on seasonal, local produce that is grown in locations that suit that particular foodstuff and which don’t put undue strain on the environment.

HMR and deli: a positive future outlook

Today’s consumer is more health conscious, environmentally aware, and knowledgeable than ever before. They want organic, plant-based, vegan, vegetarian, locally produced, or nutritious food with added health benefits. They want their HMR products to be tasty, but not too high in fat or salt or sugar, and they want their deli foods to be top quality but also cost-efficient. While many consumers are willing to pay for what they want, even more are struggling to make ends meet and will base their buying decisions on cost above anything else. This makes finding a good balance somewhat challenging, and requires agility, creativity, and a good understanding of their consumer profiles.