Private Label Buyer
Category Insights: Refrigerated

Hot Trends from the Cold Case

Prepared entrées, soups and sandwiches help retailers compete with restaurants, while refrigerated sides, sauces and more offer points of differentiation from their shelf-stable counterparts.

January 2, 2014
Category insights: refrigerated foods

The prepared foods segment promises great things for retail in the coming years. The overall pattern has seen more shoppers opting for retail prepared foods vs. visiting restaurants—a trend that should continue for the foreseeable future.

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Category insights: refrigerated foods


Top-line takeaways: A few private label refrigerated side dishes saw positive results over the past year, with potato products and sauerkraut leading the pack. Refrigerated spreads and horseradish have also seen nice gains of late.

In July 2013, as part of its “A Look Into the Future of Foodservice” report, The NPD Group projected that prepared food purchased at retailers for at-home consumption will increase by 10 percent over the next decade compared to a 4 percent increase forecast for restaurant traffic. NPD’s research found that:

• Adults 35 years and older are more likely than those 18 to 34 years old to use prepared foods from retail to meet their in-home supper needs

• Prepared foods especially meet the lunch-at-home interests of seniors (those 65+)

• Shoppers ages 18 to 24 are more inclined than others to make purchases from retailers to satisfy their interest in afternoon or evening snacks

NPD also categorized some types of common prepared foods purchased at retail by age:

• Younger adults are more likely to purchase pizza, hot dogs and burgers to eat at home—and when they buy chicken, they are more inclined to go with non-fried options

• Consumers 50+ years are interested in purchasing chicken, both fried and non-fried

Per NPD, the most-common entrées purchased at retail include chicken, pizza and macaroni and cheese. NPD also noted that sandwiches are popular take-home items—and the recent data from SymphonyIRI backs that up. Private label non-breakfast handheld items were up 9.22 percent for the 52 weeks ending November 3, 2013.

Then in September 2013, NPD unveiled a new report, “The Retail Prepared Foods Market: Assessing the Competition,” which outlines how retail has increasingly captured more share of lunch daypart away-from-home food dollars. NPD found that successful strategies by retailers accounted for a 29 percent increase in lunchtime visits from 2008–2013; during that same time period, restaurants saw a decline of 1 percent.

Another lunchtime category with significant growth is refrigerated all-in-one meals, typically containing crackers, cheese, lunchmeat and a dessert—a product format popularized by Kraft Foods and its Oscar Mayer Lunchables line. Private label versions of these were up 48.68 percent in dollar sales for the 52 weeks ending November 3, 2013.

Also in September 2013, as part of its new “Consumer Brand Metrics—Retail Meal Solutions” online data hub, Technomic made the following discoveries:

• 58 percent of shoppers report that they decided to purchase prepared foods before they arrived at a retailer

• At least half of the shoppers at Sam’s Club (58 percent), Target (56 percent), Costco (55 percent) and Walmart (50 percent) report that they decided to purchase prepared foods while already in the store

• More than half (57 percent) of shoppers report that their last prepared-foods purchase was for dinner

• 7 out of 10 shoppers at Kroger (69 percent) and Stop & Shop (68 percent) report that their last prepared-foods purchase was for dinner—more than any other chain

• At least a quarter of shoppers at Target (28 percent), Costco (27 percent), Whole Foods Market (25 percent) and Hy-Vee (25 percent) report that they consumed their last prepared-foods purchase while still inside the store, compared to just 14 percent of all other shoppers

Prepared foods at retail continue to gather momentum, but the breakfast daypart—the segment poised for the most growth—has proven a notoriously difficult nut to crack. Private label refrigerated breakfast entrées are down significantly over the past year.

Two key factors will drive growth for retailers taking a gambit at breakfast prepared foods: convenience and coffee. Retailers with stores that experience strong foot traffic will do better than others in this regard—and they need to differentiate themselves with their coffee service via specialty store brand roasts, varieties, etc. According to the most-recent Technomic “Breakfast Consumer Trend Report,” 64 percent of consumers drink coffee at breakfast, and 54 percent prefer restaurants that offer free refills. In order to capitalize on that latter facet, creating or making use of in-store dining capabilities at breakfast makes sense.


Soup’s On

Soup activity has seen a bit of a relocation from the center of the store to its perimeter. While shelf-stable soup isn’t going anywhere (although expect to see innovation in terms of packaging for that category), dollar sales of shelf-stable condensed soup were down 6.61 percent and ready-to-serve soup were down 4.48 percent for the 52 weeks ending November 3, 2013, per SymphonyIRI. During that same time frame, fresh soup dollar sales were up 4.21 percent.

Fresh soup gains added clout from the fact that most of these products play within an “all natural,” preservative-free set of processing parameters.

Fresh soup, as a category, has a rather enviable position in retail. Retailers can experiment with the myriad flavor profiles available from suppliers in the deli department before deciding which types to package under their own brand and offer in the refrigerated section. Ethnic influences run far and wide in soup these days, touching on the Mediterranean, Latin America, the Caribbean and beyond.

Retailers looking to bolster their morning daypart offerings should consider carrying oatmeal—a product that doesn’t require additional service technology if soup is already on the menu. Offering single-serve, premium, heat-and-eat oatmeal in the refrigerated section could also prove a solid draw.


Sweet on Sour

The last several years have seen a pair of oft-interlocked trends coalesce into one of the next potentially big things: sauerkraut. Fermented foods—going well beyond yogurt, the major player in the fermented game—have been building steam in culinary circles for a few years now (think hard cider, kombucha, kimchi, etc.). The second piece of this puzzle, probiotics, connects to the first, as the fermentation process yields probiotic bacteria, the same beneficial bugs in yogurt and many other fermented foods. The salty-sour taste of sauerkraut makes it a classic foil for fatty, savory meats. And lately it’s been seeing more attention than its typical biannual appearances at Oktoberfest and St. Patrick’s Day.

Refrigerated sauerkraut—sometimes carrying a premium price on products crafted by “artisan” producers—has seen an upswing in sales of late, up 10.60 percent for the 52 weeks ending November 3, 2013, per SymphonyIRI data. And private label sauerkraut has considerable room to grow into a more-competitive edge vs. its nationally branded rivals. While most analysts agree that sauerkraut will likely remain a fringe product, the right approach to an artisan line of fermented, refrigerated condiments and sides could prove profitable within the right retailer demographics.



Another retro condiment that’s gained foodie favor of late is horseradish—but, again, not in the center of the store. These are freshly made, non-homogenized horseradish preparations, sold in the refrigerated section, and seeing creative use in a wider range of foods. Horseradish also brings inherent nutritional benefits, which fuels interest.

This burgeoning horseradish revival bodes well for fresh, refrigerated sauces and condiments featuring the pungent root—more-upscale alternatives to types typically found in the center of the store. This includes the obligatory cocktail and cream sauces, but also married with mustard or mayonnaise—even puréed with beets as seen in Central and Eastern Europe, or apples like in Austrian Apfelkren—and accenting beef, salmon, latkes and potato pancakes, oysters and shrimp. Fresh, refrigerated, non-pasteurized Bloody Mary mix could also prove a viable option in some markets, particularly where raw, non-HTST, cold-pressed, refrigerated premium juices sell well.

Eye on the National Brands

 Kimberly-Clark said in October it plans to reduce the number of Huggies diapers in most packages in North America by about 7 percent starting in the first quarter of 2014 without changing the price, a move that will lead customers to pay more per diaper. The change comes as Kimberly-Clark tries to get its Huggies package sizes more in line with competitors, CEO Thomas Falk said on a conference call.