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WHAT’S COOKING

New concepts add a tasty twist to ‘do it yourself’ retailing

By Maura K. Ammenheuser

Here is a revealing statistic: According to Tufts University research, about 80 percent of Americans say eating dinner with their children is very important, and yet, less than half of those who said so actually do so nightly.

Tufts’ research, a compendium of various earlier studies, reveals a hard reality: Work, school and other activities leave precious little time these days for the shopping, planning and preparation of home-cooked meals. And this has countless parents - working moms in particular - feeling guilty because they are not whipping up Martha Stewart-esque dinners on a daily basis.

“Food has become this big chore now,” said Faith Hope Consolo, chairwoman of the retail leasing and sales division of Prudential Douglas Elliman, a New York City-based real estate brokerage and services firm.

Enter the effortless entrée.

Two years ago working moms Ruth Lundquist and Darcy Olson launched Let’s Dish, a small but growing chain of meal-assembly kitchens that operate in neighborhood centers. Let’s Dish had three company-owned and five franchised units as of September, with plans at press time to open another this month. Lundquist and Olson are co-CEOs.

“We could have 14 open by the end of the year,” said Allan Hickok, president of the Eden Prairie, Minn.-based company.

Let’s Dish allows customers, mostly women, to assemble 12 meals with which to stock their home freezers. They choose the recipes in advance from the Let’s Dish Web site (September’s options included chicken parmigiana, Mediterranean shrimp with orzo and “taco guaco burgers”), then pay online - $180 for the 12 entrees, each of which feeds about six people. After that, they spend two hours at Let’s Dish putting together the food. The staff do all the peeling, slicing, dicing and cleaning.

It is a social occasion too, marketed as a time for busy women to hobnob with their friends while nibbling snacks and creating meals they can pull from the freezer at the end of a busy day, pop in the oven and enjoy. Voilà! No more rushing from office to supermarket to kitchen in a two-hour race to feed the family something healthier and cheaper than take-out.

The stress of getting meals on the table, healthy or otherwise, is what propels customers through Let’s Dish’s doors, says Hickok. “People tell us, ‘You have changed my life,’ ” he said. “It solves this fundamental need, and it’s good food, and it’s affordable.”

And it’s gaining popularity.

“Every time I’m there, they’re busy,” said Tom Palmquist, president of the Edina, Minn.-based Robert Muir Co., which manages the 140,000-square-foot, open-air Woodbury (Minn.) Commons, a former outlet mall that is under redevelopment. Let’s Dish opened there a year ago.

Most Let’s Dish units gross between $1.3 million and $1.8 million in revenues annually. “And some units are well north of that,” Hickok said, though he would not specify how far north.

In August Let’s Dish announced that it had obtained $4 million in private financing from “several handfuls” of individual investors from the food service, retail, marketing and banking industries, Hickok said, without naming them. The money will fund additional units. So far, Let’s Dish has no plans to go public.

Let’s Dish may sound like a novel concept, but it is far from being the only meal-assembly (or make-and-take) business out there. As of September, about 165 such companies were operating some 400 units across the country, says Bert Vermeulen, director of the Easy Meal Preparation Association, a Cheyenne, Wyo.-based information exchange group.

The industry is growing fast, Vermeulen says. At the beginning of the year, about 200 meal-prep sites were operating in the U.S., up from fewer than 100 a year earlier. He predicts that there will be about 200 companies operating a total of 550 meal-prep sites by year-end. The idea is spreading to Canada and Australia, he says.

It is all part of a 20-year-old trend that Vermeulen calls “home meal replacement.” Fast food and ready-to-eat items in the supermarket were earlier manifestations of this.

“All solved the same problem,” Vermeulen said, “which is that it takes a lot of time and creativity to have dinner in your home environment.” Anything that makes this easier is bound to be attractive, he says. But convenience foods and take-out get expensive, and they are often loaded with fat, preservatives and other nutritional evils.

And do not expect to find a healthful solution in the frozen-food aisles, either, says Hickok. “There’s an old saying: You’re not supposed to eat what you can’t pronounce,” he said, referring to the ingredients listed on many heavily processed foods. “Ours is real food.”

Costing about $2.50 per serving on average, meal-assembly food is available for what co-CEO Lundquist calls “Happy Meal prices.”

Neighborhood centers are ideal locations for make-and-take businesses, which capitalize on convenience, but because the concept is still new, entrepreneurs must sometimes educate landlords a bit. Technically, meal-assembly kitchens are not stores in the traditional sense, nor are they restaurants or cooking schools, so some property managers are unsure what to make of them.

Keri Willenborg, co-founder of a 14-franchise chain called Supper Thyme, says there were no phone directory listings for meal-assembly shops two years ago when her business launched in Omaha, Neb. That, she says, remains a hurdle for franchisees.

“I kept putting [the concept] into the restaurant bracket, and they’re really not,” said John Hayden, leasing director at the Vienna, Va.-based Rappaport Cos. Hayden says he knew nothing of the concept before Let’s Dish asked to lease space at Cameron Chase Village Center, an unanchored, 30,000-square-foot neighborhood center in Ashburn, Va. Let’s Dish opened there in late August.

The first Let’s Dish opened in October 2003, with 2,300 square feet (still the chain’s typical size) at Tower Square Mall, in Eden Prairie. A solid business plan impressed the landlord, Lundquist says. “It was very easy after we got the first one,” she said.

If consumers grasp the idea immediately, some landlords remain befuddled, says Hayden. A greater obstacle for make-and-takes, says Vermeulen, is that some supermarkets object to them.

Yet another challenge is finding locations that do not demand many expensive retrofits, according to Willenborg. “A lot of plumbing goes into this,” she said, referring to such features as multiple sinks. Some landlords have warmed to the concept, though. Scott Michaelis, general manager of the Shoppes at Arbor Lake, in Maple Grove., Minn., says Let’s Dish has been doing very well since it opened at the 370,000-square-foot lifestyle center in February. “It’s a concept that’s really caught on,” Michaelis said.

The number of people one of these units can accommodate at one time varies according to its size or hours of operation, says the meal-prep association’s Vermeulen. One place may serve only about 30 people per week, others could see as many as ten times that amount.

“I think this is going to work in any environment where both [household heads] are working,” Michaelis said. “It’s a great alternative to fast food and much cheaper than eating out.”

Of course, not every meal-assembly chain is doing the volume of Let’s Dish. On the low end, a business may gross only $50,000 per unit annually, says Vermeulen. But meal assembly follows a solid business model, he says. Chains buy ingredients in bulk and have little waste. In addition, “you’ve taken what was drudgery before and turned it into a social occasion.”

Vermeulen credits Dream Dinners, a 70-store chain based in Snohomish, Wash., with being the first to franchise and heavily promote the practice of once-a-month cooking. Dream Dinners, established in 2002, says it has an additional 45 units in the works.

Another chain, My Girlfriend’s Kitchen, was expecting to open its ninth store in October at press time. The Salt Lake City-based chain favors open-air community centers. And there are many other companies starting up or expanding.

Lundquist says one competitive advantage Let’s Dish enjoys is the quality of its food. “We put a ton of effort into our R&D,” she said.

Just how large Let’s Dish will grow is an open question. “We simply don’t know how deeply we can penetrate a market,” said Hickok, though he suspects that the U.S. could support 750 units or more.

Willenborg predicts that within 10 years, three or four major chains will dominate. Supper Thyme alone says it plans to open 20 units by the end of the year and double that number next year.

“We’ll have to wait and see what sales are after the first six months,” said Rappaport Cos.’ Hayden. At first he found the concept faddish, he says, but no more. “The more I start digging into it ... I think it’s going to be around for a while.”

Consolo expects so too. Says she: “I think it’s a brilliant idea.”

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