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Frozen chicken and egg products among hot private label categories.

Frozen Chicken and Egg Products Among Hot Private Label Categories

Upscale pies beginning to appear in store brands, and even regional ethnic specialties. Market for commodities appears stable.

Which came first, the chicken or the egg? Whichever it was, they're both coming on strong in USA private label programs: breaded chicken products and cholesterol-free egg substitutes.

Weis Markets, Sunbury, Pa., always close-mouthed but always a pioneer in private label, is soon launching a char-broiled chicken sandwich, and was one of the first to market an egg substitute under a store name.

Egg Scramblers as well as Egg Beaters will soon be a target for private label; both are retail creations. But it was the fast food chains that popularized chicken nuggets, tenderloins and even (at Wendy's) char-broiled sandwiches now appearing at retail.

Although they started out as junk food, with Chicken McNuggets at McDonald's, breaded chicken products aren't necessarily lowend items in private label: Loblaw Companies, Toronto, Ontario, Canada, has launched such items as hot and spicy breast tenderloins in its upscale President's Choice label.

Another first for private label may be turkey burgers at Weis. A health consciousness-oriented alternative to hamburgers, they have been introduced on a branded basis by Wampler-Longacre, Inc., and Empire Kosher Foods, both in Pennsylvania. Weis carries both Wampler-Longacre and its own brand in three-pound boxes, with a price spread of $4.99 to $5.69.

Turkey burgers may seem like an odd category, but a spokesman for Wampler-Longacre says that chicken and turkey franks already account for 15-20% of the market in that category. With many consumers worried about the fat content in hamburgers, Weis may have gotten in on the ground floor of what could become a popular substitute.

Weis already carries Tyson charbroiled chicken sandwiches at 99 cents, so the upcoming private label version will have to come in under that. Sales of frozen chicken sandwiches generally, breaded or broiled, will overtake those for hamburgers and cheeseburgers this year, predicts Weis' supplier. Both health concerns and price will be factors; in fact, another supplier is concerned that chicken sandwiches will be positioned mainly as belly-stuffers for children, like pot pies.

Pot pies have long been a low-price, low-image category for private label and brands alike; even the people who make them for private label are embarrassed to admit it, and only the threat of parental discipline seems to induce some children to eat the things. Tyson, a brand leader in chicken products, came out with an upscale (no bottom crust, and more meat) chicken pie last year. Whether it will do well enough to create a market for upscale private label chicken pies remains to be seen.

Upscale dessert pies have already debuted at ShopRite (Wakefern Foods, Elizabeth, N.J.) under The Classic Collection (also used for super-premium ice cream) banner; and at Winn-Dixie, Jacksonville, Fla., under the Prestige label. Two or three other retailers are reportedly showing a strong interest in the category, which includes apple, cherry, pumpkin and other varieties -- but the recession could still put a kibosh on their plans.

ShopRite and Winn-Dixie's supplier hopes otherwise. "One of the things we've seen is that even when times are tough, people want to spend their discretionary income on something special," he said. "If you're going to have a slice of pie, spend another buck. Dessert pies are usually served at family dinners, the kind of meals people don't want to skimp on even if they cut back on casual snacks."

Most frozen private label volume is still in the commodities like vegetables and orange juice. Here, the weather has been more a concern recently than the economy. A severe freeze in California has been followed by a drought, and both inspired panicky headlines. But the impact on the private label market won't be that great, industry sources say. If there is a shortage of broccoli, especially, Mexican imports can always make it up until new domestic crops can be planted and harvested.

Barry Jaynes, frozen food buyer at Certified Grocers of California, Los Angeles, said in January that inventories of private label broccoli were running low, but not critically so, with new supplies promised for April. Meanwhile, Jaynes said, Certified is considering adding more items to its Special Value line of B-grade frozen vegetables, which now includes just peas, beans and corn in two-pound bags. That's a response to the economic weather, of course.

Special Value is a neogeneric brand that Certified also uses for low-end (99 cent) pizzas in cheese, pepperoni and combination varieties; and for equally low-end frozen dinners (five varieties). Chicken nuggets were first introduced under the Special Value banner, but design work is under way for a firstline Springfield version. Meanwhile, Jaynes added, private label frozen orange juice, which had been losing ground to the brands for several years, is recovering.

Certified went into microwave box vegetables last year, following the lead of Ralphs Grocery Co., Compton, Calif., which pioneered the concept five years ago. But it opted for a smaller size, matching that for traditional wax carton vegetables, instead of the larger one used by Ralphs and other chains. If innovation of packaging is still taking hold, however, innovation in the contents isn't: leading suppliers say interest is down in items like pasta-vegetable blends. "They created a niche, but it was a small one," one said. One technical innovation is frozen diced tomatoes, but these are being produced thus far only for the industrial market, and any retail private label market for frozen tomatoes seems years down the road: Restaurant salad bars would be the next step.

Sales of egg substitutes (made from egg whites, with additional ingredients to simulate the color and flavor of whole eggs) totaled about $130 million last year, up from $107.4 million in 1989, $71.3 million in 1988 and $45.7 million in 1987. Fleischmann's Egg Beaters remains the market leader, but Worthington's Egg Scramblers holds a strong regional franchise in the Southeast. Private label is now available from one source for both branded versions: two eight-ounce packs (the Egg Beaters version) and three four-ounce packs (the Egg Scramblers version). So far, all the private label entries have been in two eight-ounce packs, but the three-packs may have an advantage in terms of convenience for singles who don't want to use more than four ounces (two eggs' worth) at a time.

A number of retailers have adopted distinctive names for their private labels: Magic Egg at Weis, Egg Magic at A&P, Egg Options at Tops Friendly Markets, the Great Eggscape at ShopRite, Quick Egg at Stop & Shop. But they're all basically the same product, in the same kind of milk carton-in-sleeve packaging. By this summer, there should be more than three dozen accounts, including such giants as Kroger, Federated Foods, Topco, Wetterau, Thorofare and IGA, as well as regionals like Ingles, Giant, Pathmark, Shop 'n Save, Wegman's, HyVee and Tom Thumb.

Established accounts report market shares of 20% or more, and gross margins of 20-30%, said to be highest for any item in the frozen breakfast category. But one word of caution: stick to straight egg substitutes. Vegetable omelette mixes, although available for private label, don't seem to be a good bet, since Fleischmann's own version is reportedly bombing.

The market for private label frozen hamburgers, cheeseburgers and chicken sandwiches was largely a spin-off of the market for private label breakfast entrees and breakfast sandwiches, positioned against Swanson's Great Starts. Microwave sandwiches of all kinds are now showing faster growth in private label than chicken nuggets and fillets, reported a leading supplier of dozens of chains and wholesalers, and private label breakfast sandwiches are outselling Great Starts at a number of accounts.

Breakfast sandwiches are the cutting edge of private label in the whole breakfast category, he said; movement of breakfast entrees has "prety much stabilized," even in the brand. Entrees cost more, of course, and people who might buy them are sticking with frozen waffles, the supplier theorized. Another factor may be that breakfast sandwiches are perfect for eat-on-the-run commuters, who would have to sit down for entrees.

Even so, there are about twice as many chains and wholesalers in private label chicken nuggets, fillets, etc., as there are in private label breakfast sandwiches. Chicken sandwiches, even if they are aimed mainly at kids, like pot pies and fish sticks, should have a broader appeal for private label programs. Yet narrow appeal can sometimes have its advantages.

Affiliated Food Distributors, Scranton, Pa., is coming out with private label pierogies, a stuffed pasta specialty that originated in Poland and is popular in northeast Pennsylvania with its large immigrant population. It wouldn't play in Peoria, but the category is perfect for Wilkes Barre. Chances are other regional chains or wholesalers could make a go of other regional favorites.

PHOTO : Breaded chicken products don't have to be cheap, as witness President's Choice hot & spicy tenderloins.

PHOTO : "If you like Egg Beaters, try me!" invites starburst on Pathmark's newly-introduced private label egg substitute.

PHOTO : ShopRite goes for the high-end family trade with upscale private label dessert pies.
COPYRIGHT 1991 E.W. Williams Publications, Inc.
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Title Annotation:Frozen Foods in North America
Publication:Quick Frozen Foods International
Date:Apr 1, 1991
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