Merchandising Features / Categories / Channels / Private Label vs. National Brands / Grocery / Tactics / Frozen Foods

Private Eye: Frozen Store Brand Competition Heats Up

Our investigations into private label vs. national brand ice cream and novelties show strong price sensitivity, while frozen breads/dough has room to grow.

August 1, 2014
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In order to provide a real-world look inside vital and emerging private label categories, every month we deploy secret shoppers across the country to compare

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Private Eye chart ice cream

prices and investigate the real-world promotional and merchandising tactics retailers are employing to drive shopper interest and sales.

This month, we look at three key areas of Frozen Foods: private label ice cream, frozen novelties and frozen bread products.

 

Market Strength—and Potential

Private label ice cream and frozen novelties are flat to slightly down for the 52 weeks ending May 18, 2014 per IRI, with ice cream down 1.84 in dollar sales and novelties down 1.82 percent. But these are strong, vital categories—particularly ice cream. Private label ice cream brought in over $1.10 billion in sales for the period, now with nearly 20 percent share of the market, and private label frozen novelties accounted for over $453 million. Store brand ice cream and frozen novelties is largely national-brand-equivalent (NBE) territory, with strong price competition between private label and national brands in top-selling, high-demand product areas.

Frozen bread is another product area where private label shows strength. For the 52 weeks ending May 18, frozen fresh baked bread, rolls and biscuits were up 2.45 percent in dollar sales, growing total sales to $184.6 million and accounting for 18 percent share of the market. Frozen private label dough for bread, rolls and pastry saw a bit of a dip with a drop of 3.34 percent in dollar sales for the period, with $20.5 million in sales. The category only accounts for 2 percent of dollar share though, indicating some significant room for better penetration through expansion into the product area for retailers who have not added them, and through better marketing and merchandising for those who have made the move but are still losing sales to national brands.

Growing frozen breads to include targeted specialty products that have been performing well in the fresh, in-store Baked Goods/Bakery department—packaged in easily portioned serving sizes for frozen—could also drive interest. Such a national-brand-better (NBB) tactic could prove particularly poignant for shoppers who seek the specialized, artisan aspects of breads typically only available as perishable products, but typically cannot finish them before they grow stale.

 

In-Store Experiences

This month, our secret shoppers unanimously found private label and national brand products shelved side-by-side. This is likely due to the strong price sensitivity of these products. Sales and competitive pricing overall can considerably sway shopper decisions as the summer heats up—particularly for those who only occasionally buy store brands in product areas like ice cream, novelties and frozen bread/dough.

Sarah C. noted that she “sometimes” opts for the store brand ice cream over her preferred national brand, “with price helping sway decision.” She noted that her family likes the national brand ice cream, but that “store brand is fine, too. Price usually determines what kind we buy.”

Christina R. said that she typically buys store brand ice cream and novelties—but her loyalty has a fairly specific price tag. She noted that “at least a $1 price difference” encourages her to purchase the store brand. She noted that the Great Value ice cream sandwiches she bought at Walmart “were not as sweet as their name-brand counterpart, and they were small.” However, she noted that the Great Value product had 12 sandwiches in box versus 8 for Blue Bunny—and offered $0.50 regular price savings.

Bill K.—who regularly buys store brand ice cream—suggested that Ingles Best ice cream tastes as good as Breyers. But price-focused shoppers might not prove as loyal to private label in light of a 4/$10 deal for Breyers like he found at Ingles during his visit, undercutting the 2/$6 sale for Ingles Best. As a regular store brand shopper, he also noticed that the packaging graphics of Ingles Market’s Laura Lynn brand were recently updated.

For Amy K., the regular-price savings private label often offers over national brands isn’t good enough when it comes to ice cream and frozen novelties. She noted that she “would usually buy the Giant Eagle brands if they were on sale.”

 In Amy’s case, sampling helped open the door to repeat purchase. “I have tough critics in the house, namely my 6- and 8-year-old daughters,” she said. “I received their seal of approval on the Giant Eagle Fudge Pops that I bought for them with this shopping trip. According to them, the ‘fudge-sicles’ tasted just as good as, if not better than, the Popsicle brand. With their rave reviews, I think we will be purchasing the private label brand instead of the national brand.”  

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