Private Label Buyer
Category Insights: Frozen Foods - Meats

Frozen Food Heats Up

Retailers continue to raise the bar on frozen private label products and packaging.

June 4, 2013
Frozen foods and meats

When you think of frozen private label food, images of a rushed dinner for a busy family or a single woman working late nights on a pinched budget might spring

Eye on the National Brands

The pizza at retail market is controlled by four dominant companies, with Nestlé S.A. being the power player after buying the pizza division of Kraft Foods in 2010, according to Mintel. This acquisition included leading brand DiGiorno and No. 3 brand Tombstone. … DiGiorno introduced a new line of pizzeria-style frozen pizzas this year deemed Pizzeria! By DIGIORNO in four varieties: four-cheese, pepperoni and cheese, supreme and Italian meat trio. The pizza is “Love it or it’s free guaranteed.” … Schwan Food Co. owns the No. 2 brand, Red Baron, and growing upscale brand Freschetta, according to Mintel. The remaining two companies are General Mills and Pinnacle Foods.

to mind. But this perception no longer holds true, as today’s private label frozen foods offer not just inspired culinary convenience, but upscale ingredients and packaging.

In an effort to change the way consumers think and feel about frozen foods the American Frozen Food Institute, through its newly formed Frozen Food Roundtable, is launching a major new consumer campaign.

“We’ve done some consumer insight research that demonstrates consumers are, you know, at the moment a little confused on how frozen foods are made, what types of foods are available to them, what the nutritional quality of those foods are,” said Corey Henry, VP of communications, AFFI. “… and so we want to go about answering those questions for consumers so they can fully appreciate the benefit, and the value, and the range of products that are available to them in the frozen food aisle.”

The roundtable created to develop and launch the new consumer facing campaign includes eight companies: The Schwan Food Company, ConAgra Foods, Pinnacle Foods, General Mills, H.J. Heinz Company, Nestlé, Kellogg’s and Hillshire Brands.

Henry told PLBuyer the group hoped the multi-million dollar campaign in the process of development would launch in the third quarter this year. AFFI already brought New York ad agency McCANN and PR company GolinHarris on board to help with the campaign.

At the moment they have a “significant amount of support from the frozen food community” Henry said, and the next step would be looking to bring on frozen food retailers to get them involved as well.

Pizza

Mintel’s July 2012 report, “Pizza at Retail—U.S.,” forecasts that retail frozen-pizza sales would continue to slip through 2016. However private label pizza fared better recently then branded products, with IRI showing a 3.2 percent dollar sales decline in the overall category in 2012, but a 2.17 percent decline in private label frozen pizza and an increase in private label dough/crusts. 

Mike Pytlinski, brand director at Palermo’s Pizza in Milwaukee, Wis., agreed that the market will be flat or soft for the next year or so, but that private label benefited in the category from the improvement of product quality and presentation, such as cleaner packaging and higher quality photos. Pytlinski pointed to Safeway’s Safeway Select brand and Kroger’s Private Selection line as examples.

“Obviously they have a brand that isn’t just limited to this category, they have it across the store and there is a certain quality level and threshold that I think consumers know and can come to, and then they’ve brought that same level of diligence to this category,” Pytlinski said.

Mintel’s report said that private label continues to be seen as comparable by 41 percent of consumers, and has an opportunity – especially among consumers between the ages of 18 and 34 – because close to half of them feel that private label tastes the same as brands.

Pytlinski said frozen private label pizza customers mainly came from households with children or two-person households.

 “Increasingly, yeah, they’re looking for high quality, but at a reasonable price,” he said. “And increasingly they’re able to get those needs met with the product offerings from the number of retailers that are really [raising the bar] with the offerings that are out there.”

Pytlinski also noted that there’s an increased frequency in promotion, with retailers getting more aggressive in terms of frequency and price point.

“I’m seeing it as a marketer who’s been in the business for 20 years,” he said. “You know a lot of these companies are doing a very good job of marketing their product, and I mean that it’s not just communications, i.e. packaging for instance, it is the product, the product mix, the offering, the promotion level, the distribution, everything has been raised over the years and I think you’re seeing the effects of it. You’re getting some very savvy retailers helping drive the category.”

Basic flavors such as pepperoni, cheese and supreme drive a lot of the volume, according to Pytlinski. But newer and upscale flavors are there, too.

Pytlinski said Palermo’s Pizza, for example, is working to come up with flatbreads. Flatbreads look like pizza, but are more upscale and good for a one- or two-person household.

Shoppers will find premium pizza even in drugstore retailers today, such as Walgreens, which offers handmade Stromboli and pizza for one under its premium Good & Delish brand.

Supermarket retailer Whole Foods Market has stepped up its private brand assortment with options such as a vegan pizza, and by sourcing pizza from Italy such as its Whole Foods Market Wood-Fired Pizza Stracchino (cheese) and Arugula, made in Friuli, Italy in the authentic schiacciata style (a thin, crispy crust).

Pasta/Entrees/Snacks

On the other hand, private label frozen entrees are few and far between, according to Bobby Ray, vice president of retail at Select Store Brands in Ontario, Calif.

Enlarged Image

Frozen foods and meats

“Store brand entrees need a bigger selection and higher quality items that will fit the high end side of the entrées,” Ray said.

When it comes to the frozen pasta category, IRI data saw sales increase in private label ravioli, tortellini, A/O pasta/noodles, and pierogi.

“Very simply ‘quality sells,’” Ray said, “always has and always will – most of the gains is in the high end of pastas.  Retailers need to continue to ‘step-up’ when looking at quality frozen pastas.”

However, Ray explained, some are more difficult, though not impossible, to keep IQF (individual quick frozen).  Retailers must work with suppliers that have the know-how to get it to the shelves in the best delivery method to consumers.

In the future Ray expects “types” of vegetables to become more popular.  

“Consumers are embracing the fire roasted vegetables in steam ready packaging,” said Ray. “The roasting develops a special flavor profile that makes a frozen corn ‘special.’  When seasoning is added to the roasting process, again the product jumps up to even another level of excitement to the consumer.”

As for packaging techniques, Ray said it’s “steam, steam, and steam. When Birdseye introduced their steam fresh packaging, it gave the entire frozen vegetable area a shot in the arm. Great technology that has helped us all.”

Most retailers design their own brand packaging in this area, Ray said.

“It is sure a tough day when we see some of the packaging that is sent to our plants that may be inferior to the national brands,” he said.

However, Ray said some retailers were doing a great job here, citing Harris Teeters new high end brand HT Traders as “simply wonderful.”

Seafood

According to Mintel’s July 2012 report “Fish and Seafood - US,” the fish and seafood category is very fragmented, with private label representing 30.6 percent of fish and seafood FDMx dollar sales. The frozen fish and seafood segment has enjoyed a generally strong performance during the recession, likely driven by a more attractive price point than fresh fish and a wide range of offerings. Private label’s strong presence here also signifies lower prices that frugal consumers could enjoy.

Although private label’s new product development has slowed during the recession, it appears to be bouncing back, according to Mintel’s GNPD data through August 29, 2012.  The report suggests that by focusing on new product innovation, such as premium offerings, retailers do indeed continue to have an even stronger advantage relative to branded products.

Safeway’s Waterfront Bistro line, launched in 2009, for example, offers simple items such as frozen raw shrimp, which were up almost 10 percent according to IRI data, as well as seasoned and marinated options such as Garlic Lemon Pepper Sockeye Salmon and Tuscan Roasted Garlic Pacific Cod. Trader Joe’s has added a new Wild Caught North Atlantic Jumbo Sea Scallops, which are immediately shucked and individually quick frozen while at sea, and then dry-packed.

Meat/Chicken

Mintel’s 2012 “Red Meat – US” report showed that 10 companies accounted for 56.1 percent of FDMx sales of packaged beef and pork products in the 52 weeks ending July 8, 2012. During that period, FDMx sales among the top 10 leading companies increased 3 percent, while private label sales grew by 2.7 percent.

Chicken is expected to fare even better than meat, with Mintel’s 2012 “Poultry – US” report predicting the poultry market is set to grow steadily if not dramatically between 2012 and 2017, rising from $29.9 billion in total retail sales to $34.7 billion, and driven by an increase in per capita poultry consumption that the USDA reports will slightly outpace that of per capita red meat consumption.

IRI data shows processed FZ/RFG chicken/chicken sub was up 23 percent to more than $537 million.

William P. Roenigk, vice president, National Chicken Council, said it was expected the higher price of beef would cause consumers to shift to chicken, but it was beginning to look like that might not happen, until late last year and this year people have shifted their demand.

On the demand side there’s been a shift towards chicken, Roenigk explained, exports have remained the same, and on the supply side there’s a very stable situation. He said in May that prices already were at prices analysts targeted for the summer, with the exception of wings, as the wing market has softened since the Super Bowl.

Additionally, he’s seeing a slight shift towards greater acceptance of the dark meat, not just from the traditional ethnic groups, but across the board.

If you ask consumers today about their perception of frozen food, some consider it to be more of a processed food, Roenigk said. There’s a feeling that consumers want to know the story behind their food with simpler ingredients, but people still want convenience, even with the economy off.

“Consumers, as I understand it, are not really giving frozen food, including private label, store brands, a pass on things they want to see, so in addition to looking for value and taste and convenience and versatility, they certainly want to be reassured of food safety, the product is sustainable…that to the extent possible that there can be some measure of health or wellness,” Roenigk said. “I’ve seen some Omega-3, antioxidant statements on some of these packages now. So consumers are looking for value and alternatives to brand names, but they don’t seem to willing to give up on any of the virtues or characteristics they want on a product.”

And “protein” remains a popular buzz word.

 “Certainly chicken is a wonderful protein,” he said.

Roenigk also points retailers and suppliers needing to understand millennials, who are the “bus drivers” these days in terms of the food market. Additionally QR codes can provide shoppers with recipes and the background story a frozen chicken product, which could provide consumers with the transparency they are seeking.

“So there’re lots of challenges and opportunities out there for the chicken supplier, especially in the frozen case where you have to open the door and look at the product that way,” Roenigk said. “People are trying to capture attention in a very short time.”

Packaging with attention-grabbing graphics and colors are important for retailers to get that attention in the frozen aisle.

 In addition to chicken products, retailers also are rolling out more frozen chicken and meat substitutes as shoppers continue to search for protein alternatives. For example, Wegmans put out new Food You Feel Good about Hometown veggie burger, which the retailer says was created by the chefs for its Pub and Food Bar restaurants. The retailer also has a new Tomato & Garbanzo Bean Burger out.