Food Firms Being Forced to Cook Up New Notions

America’s appetite for a quick meal at home is forcing many food companies away from traditional staples and into highly processed foods that sometimes can be prepared in as much time as it takes to read the recipe for a normal home-cooked dish.

Faced with changing life styles and intensified competition from restaurants, food companies are seizing upon the willingness among consumers to pay premium prices for such foods if they are tasty and easy to prepare.

This change “ultimately is a matter of survival,” for most food companies, said Michael Mulligan, a vice president of Super Valu Stores Inc., a food distributor and grocery store operator.

To get crucial shelf space in grocery stores, food companies must constantly come up with new products that offer consumers something unique, Mulligan said. “If they don’t, they’re going to get squeezed off the shelf.”

Several companies appearing at a recent food conference sponsored by Piper, Jaffray & Hopwood Inc., a Minneapolis-based brokerage firm, are repositioning themselves as purveyors of these marketing-driven packaged foods rather than suppliers of commodities such as meats or vegetables.

For example, Geo. A. Hormel & Co., once primarily a meatpacker, is undergoing a metamorphosis. The company has for the most part abandoned the slaughtering business and is pinning its hopes on an array of new packaged food products.

Among them is a line of microwave entrees called Top Shelf that do not need to be refrigerated.

Another product Hormel hopes will produce sizzling profits is microwave bacon that will use special packaging to trap and absorb grease and cost 25% more than conventional bacon.

Similarly, Stokely USA Inc. added to its lineup of canned vegetables a microwave, single-serving, frozen vegetable product that went into national distribution in the last year.

The product, known as Stokely’s Singles, has been a hit with consumers, reaching an estimated $15 million in sales in a little over two years and sparking numerous imitators.

Universal Foods Corp., a manufacturer of specialized food service products that is now under threat of hostile takeover by High Voltage Engineering Corp., in 1985 set out to diversify beyond its traditional businesses of selling cheese and yeast.

Primarily through acquisitions, Universal entered the specialty frozen food and flavorings and colorings businesses. Cheese and yeast now account for only about 43% of the company’s revenues, down from 64% in 1984, and operating margins have increased 2.5% with such products as spiral and coated French fries.

The battle to develop and launch new products is fiercely competitive and very costly.