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'Breakfast of champions' in the USA is apt to be frozen or refrigerated.

Time was when breakfast in America likely meant hefty helpings of bacon, eggs, fried potatoes and toasted bread smothered with butter and/or jelly. The leisurely meal was usually eaten at home with family members, or perhaps at a nearby diner.

These days, however, time pressures of the modern workplace and the frenetic pace of dual-income parents rushing the kids off to school has radically reshaped the morning feeding ritual. And thanks to the microwave oven boom, makers of frozen breakfasts are cashing in bigger than ever.

USA retail sales of frozen and refrigerated breakfasts -- including waffles, speciality items, and french toast/pancakes -- grew 7.5% in 1992 to hit the $1 billion level, according to a study recently issued by Packaged Facts, a New York-based research house. This amounts to an impressive 63.1% increase since 1988, when the market posted sales of approximately $660 million.

Surprisingly, those huge gains have come despite a steady decline in the rate of annual growth. It has fallen from 24.6% in 1988 to 7.5% in 1992. And Packaged Facts is projecting another decline this year, albeit a slight one, with growth pegged to slip to 7.0%. After that, annual gains are expected to stabilize at a rate of 6% through 1997, when sales will reach almost $1.5 billion.

Over that period, the three different categories in the market should maintain annual growth of between 5% and 7%. And that will have the following effect on sales: the frozen and refrigerated waffles category will grow from $535 million in 1992, to $715 million in 1997; specialty breakfast foods sector sales will increase TABULAR DATA OMITTED from $417 million in 1992, to $585 million in 1997; and the french toast/pancakes category will rise from sales of $127 million in 1992, to $166 million in 1997.

Heavyweight marketers such as Campbell and ConAgra have targeted youngsters with their Breakfast Blast and Banquet Kid Cuisine lines, respectively. Kids are also given part of the credit for the increasing popularity of breakfast sandwiches accounting for 29% of the specialty breakfast food category's sales.

These convenient meals have become extremely popular items at home, much to the detriment of the fast food restauranteurs that had so successfully used Egg McMuffins, and the like, to expand their sales base into breakfast.

But convenience isn't the only factor that's driving the market. When microwaving at home, consumers have access to a wider variety of products than they do in restaurants. This allows for more choice and, perhaps more importantly, a greater degree of dietary control. And that has great appeal for those wishing to lower levels of fat and cholesterol.

Since up to one-third of cholesterol intake comes from eggs, it is probably no surprise that egg substitutes are the most popular of the healthy oriented products, accounting for over 18% of the specialty breakfast category's sales. But health pitches with whole grain and reduced calorie items are also being made in order to appeal to both senior citizens and aging baby boomers.

In the specialty breakfast category, Campbell (Swanson) leads with approximately one-quarter of all sales. Second is RJR Nabisco, based on the strength of its Egg Beaters brand of egg substitutes. Sara Lee is third, with strong showings in breakfast sandwiches and baked goods.

In both the waffles category and the french toast/pancakes sector, Kellogg's holds sway with its powerful Eggo brand, accounting for over 50% of combined sales. Pet (Downyflake) and Quaker Oats (Aunt Jemima) run second and third, respectively.

A plethora of other producers are involved in the market, ranging from tiny startup companies to major marketers such as Heinz and ConAgra. But, according to David Weiss, president of Packaged Facts, the days of the little guys are numbered, at least at the supermarket level. "The fight for shelf space has become really intense," he said, "and without marketing muscle, it's going to be very hard to find room in the freezer."

But Kid Foods Are Chumpions

It's like a kids' playground war, and it looks as if it could wipe out all three players in the once promising but now apparently stillborn category of children's frozen meals.

Tyson Foods, ConAgra and Campbell Soup Co. all jumped into the category with similar products -- Looney Tunes, Kid Cuisine and Fun Feast -- and were soon duking it out with coupons, sale prices and other promotions.

Industry analysts argue there wasn't room for three brands in the first place, and that Tyson, ConAgra and Campbell compounded the error by coming out with the same kind of products instead of trying to diversify the kiddie meal category. And even at $2, many parents didn't think the frozen meals were a bargain -- they'd rather stick with fare like canned pasta.
COPYRIGHT 1993 E.W. Williams Publications, Inc.
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Title Annotation:Frozen Foods in North America; trends in American breakfast habits
Publication:Quick Frozen Foods International
Date:Oct 1, 1993
Previous Article:$2.4-B microwavable food market in USA led by frozen breakfast, popcorn products.
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