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Walk Down the Aisle: Frozen Foods

September 19, 2011
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Getting the Cold Shoulder
 
Private label innovation is largely lacking in frozen foods, experts say. And PLBuyer’s secret shoppers found little price difference between PL and national brands, a potential turn-off to buying private label items here.
 
Retailers are pricing private label frozen foods closer to their national brand equivalents than has been seen in other stores aisles visited this year, report PLBuyer’s secret shoppers. Of the four stores surveyed by our shoppers, only one store showed a price gap of more than a dollar between a frozen food item and a national brand.

A Piggly Wiggly in Lafayette, La., showed the largest price gap in the frozen food section in all four products looked at by our shoppers – pizzas, appetizers, juice and pies. Of the four, pizza showed the largest gap in price amongst retailers with a nearly $4 difference between private label and national brands at the Piggly Wiggly.

Other products, such as frozen juice, saw virtually no price difference between private label and national brands. For example, the private label and national brand juice at an H-E-B in Corpus Christi, Texas, were both priced at $1.24. Other products, such as private label frozen pies, were priced higher than national brand competitors at a Walmart in Algonquin, Ill.

Other aisles PLBuyer shoppers have visited this year showed a much larger and more noticeable price gap between private label and branded products. For instance, the bakery aisle (see PLBuyer, March, 2011) had a difference of more than $3 between national brand and private label sandwich rolls. In the packaged meat section (see PLBuyer, January, 2011), a $4.50 price gap was seen between one private label and a national brand ham.

In addition to looking at price, shoppers also conducted their own taste tests of frozen items and looked at in-store merchandising. The goal of our walk down the aisle is to provide you, our readers, with market intelligence and insight you can use to increase your sales.
 
INCONSISTENT MARKETING

Private label marketing in the frozen food aisle was more prevalent than it has been in other aisles walked so far by our shoppers. In-store private label advertisements were visible at all but one store, a much higher percentage than in other aisles. Out of the five stores visited, only the H-E-B did not have any in-store ads for private label frozen foods.

However, it was the only store visited that used on-shelf price comparisons between private label and national brands in the category. A lack of on-shelf price comparisons seems common, not just in the frozen food aisle but across most stores our shoppers have visited. According to research done by our secret shoppers, on-shelf price tag comparisons were not seen or rarely seen in categories like packaged meat, deli, bakery and prepared foods. Such comparisons can be a powerful marketing tool aimed at shoppers conscious of price, marketing experts have said.

Private label and national brand side-by-side shelf positioning were more prominent in the stores surveyed by our secret shoppers. Only the Trader Joe’s in Kansas City, Mo., did not have side-by-side displays but our secret shopper notes that this is because Trader Joe’s often has only its private labels in a category with no national brand competitor.
 
TASTE TESTS

Shopper Paulina S. tried both national brand and private label cheesecakes and found that Walmart’s Great Value brand was the better tasting of the two. “I think it is because they [Great Value] used more authentic ingredients such as honey and brown sugar rather than the Sara Lee cheesecake that opted for high-fructose corn syrup,” she explains.

Mike G. tried a number of items at Trader Joe’s, including crab cakes which he describes as “tasty with both a splash of lemon and a splash of malt vinegar. Good, not great.” He was not impressed by the Four Formaggi pizza either. “I would comment that there was nothing terribly uniquely special about the pizza, which is to say that I doubt I would return to the store for this item, or go out of my way to pick it up if shopping there for other items,” he explains.

Dani E. tried the frozen juice and discovered that Piggly Wiggly’s Parade brand was “excellent. Even better than the Welch’s I usually buy.”

Synnora R. bought Safeway’s Claim Jumper peach pie, which she describes as “so very good.  The crust was flaky and the peaches were not mushy.  It was a little sweet for my taste but I am not a sweets person.”

Andi D. tried H-E-B’s cheese pizza and found that “it was good. I wish there would have been more cheese but still good! It was a good value.”
 
WHAT THE EXPERTS THINK

The frozen food aisle is stuck in a deep freeze, according to many industry experts. “There are a lot of mediocre products in the category right now,” explains Jim Wisner, president of Wisner Marketing Group, Libertyville, Ill. “We have come a long way from the days when there was only frozen pot pies to choose from, yet to some extent the category has not gotten all the attention that it wants and deserves.”
 “My general sense is that the frozen aisle is generally a bit behind other departments” in terms of private label product developments, agrees Paula Rosenblum, managing partner with Miami-based Retail Systems Research (RSR). “I see a lot more brands than I do private label products. But I do see the percentage of private label increasing,”

Brands have seized opportunities in the frozen food category that private labels have not, says Wisner. But he thinks private labels are catching up. For instance, there has been some upgrading of private label frozen pizzas and he expects to see that continue. Private label frozen fish is another category that seems to be blossoming in some retailers but not in others, he explains. “Go into any Loblaws in Canada and you will see four to eight feet of frozen fish that looks amazing; but a lot of retailers have been slow to develop that product,” he says.

Innovation is the key to winning over consumers in the aisle, experts agree. “While customers still appear biased toward familiar name brands for specialty items such as ice cream, they are beginning to take notice of private label options. Currently, frozen private label items tend to follow the trend created by the national brands when looking at innovation, with items such as steam cook ready packaging for vegetables,” says Katie Mathis, retail analyst at the Chicago offices of London-based research firm Planet Retail.

 “There are more opportunities to innovate packaging in the frozen food category than any other,” says Wisner. Finding new and creative ways to heat up packages in an eco-friendly manner opens up many doors for private label products in the category.
 

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