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Frozens become fashionable.

High profit frozen foods were easy enough for grocers to warm up to, but the category left some shoppers cold--until fairly recently. With appealing dishes like Beef Burgundy and Scallops in Wine Sauce now found at both chic dining spots and the supermarket freezer case, the stigma attached to serving frozens is fast disappearing. What's more, as the hot new entree and dinner lines continue to surface, and as the quality and variety of existing lines improves, the "sizzle" is back in frozens selling.

The news on the frozens front is indeed encouraging. The recent blizzard of new product activity, coupled with the economic recovery has helped frozen food sales bounce back. According to a Frozen Food Age year-end report, 1983 was winding up as "frozens' best year in was winding up as "frozens' best year in half a decade." The projection at press-time was that frozen food sales at retail for 1983 would amount to $13.1 billion, up from $12.3 billion in 1982.

Last fall, SAMI reported that frozen food tonnage sales scored a 4.6% increase in the four-week period ending Aug. 19, for the sharpest gain in two and a half years. The following month, tonnage sales rose 3.5% over the year before in the four weeks ending Sept. 16. (See accompanying table.) According to SAMI Vice President Alan Miller, "The rate of growth is slightly off. We're approaching the anniversary of the rollout of the new products--those premium-quality lines which pulled up the frozen food category with their tremendous new volume, focusing a lot of attention on opportunities in frozen foods. Stouffer's Lean Cuisine came out about two years ago, when there was still a high rate of inflation. The attitude is that new entries should do even better now."

Besides the calorie-control Lean Cuisine en tree line, the list of other premium-quality dinner and entree products in both diet and non-diet categories continues to grow. It includes Stouffer's regular entree line, Armour's Dinner Classics, Campbell's Le Menu Dinners, ConAgra's Light & Elegant entrees, Pillsbury's Green Giant Stir-Fry Entrees, Foodways National's Weight Watchers line and Van de Kamp's Mexican, Italian and Chinese Classics, to name just a few. Then there are the existing product reformulations and line extensions such as Gorton's new Light Recipe fish products, and the new items on tap for this year including Famous Restaurant Classics from Benihana of Tokyo, Great American Combinations from Green Giant, and a Del Monte introduction in the frozen main meal category, which will probably fit into the premium- quality slot.

How do retailers and wholesalers feel about all this new product activity with a clear emphasis on quality?

"We move a good 750 cases of Le Menu a week," reports Jim Hargrelious, frozen food and diary merchandiser of J.M. Jones Company, a Super Value subsidiary in the Champagne-Urbana Division. "We're surprised at this and don't know if it will hold." He adds that the division, which supplies stores ranging from $15,000 a week units to high-volume Cub stores, increased its frozens sales by 29% last year over the year before.

At New York's Sloan's Supermarkets, Chairman Jules Rose says prepared foods--especially entrees--are the chain's top movers. "We don't do as much with the upscale complete dinners as we do with entree items like Stouffer's Lean Cuisine and Weight Watchers entrees. No matter how you slice them, the complete dinners are still TV dinners--glorified airplane food--which don't allow for creativity. Entrees allow shoppers to create their own meal centered around the entree--and to feel no guilt."

Publix's Monte Thornton, director of frozen foods for the Lakeland, Fla.-based chain, ays gourmet-type entrees lead the category at his stores "by far." "The key to success in the frozen food category is quality," he says. "The premium lines we have put in are all of good quality. Manufacturers keep improving them and we're always wanting to upgrade."

Danny Boone, assistant sales promoter for the Kroger Sav-On Division in Charlotte, N.C., says his division's frozen food sales increased 32% last year over 1982. "Some of it had to do with the better quality trend," he points out. "Customers are going after better quality items. It's not only the new entree items, it's across the board with better quality vegetables and products like natural juice fruit pies selling well, while, at one time, the less expensive lines used to move faster. And as more women work, and more and more items become microwaveable, sales will increase. We are seeing what a success microwaveable, upscale entrees are. They're top of the line, but simple to fix."

At Safeway's Midwest Division, Larry Majore, grocery merchandising manager, says the demographics of the Denver area seem just right for the new upscale introductions. "We see a trend going to these items. This is a demographic area of highly educated singles and couples. And there are also a lot of microwaves in use here. Premium dinners' movement is still not great. They don't set the world on fire compared with movement on pizzas, juices or vegetables here, but I do see growth in these areas. Stouffer's had a problem supplying stores with Lean Cuisine when it first came out, and so did Campbell's with Le Menu." Classy New Customers

Touted to be a far cry in taste and texture from the original TV dinner created 30 years ago, the new products, retailing for approximately $2.50 to $3, also differ greatly in price. Are established TV dinner users trading up in hopes of going from dull to delectible, or has a new frozen food consumer emerged with the advent of the pricey premium products? It's a combination of both, say retailers and manufacturers.

"Sales from premium dinners haven't greatly affected sales of the old TV dinners," says Gary Edwards, frozen foods merchandiser and buyer at Los Angeles-based Vons. "But some customers who didn't look to TV dinners before are now buying the premium dinners. We're also getting some of the entree customers to buy the complete premium dinners."

"In many cases we have a different consumer that that of the traditional frozen food dinners," says Armour Foods' Nick Rago, vice president and general manager of the frozen food and foodservice division. "We have also upgraded some of the 'tin-plate' dinner users. There was a stigma attached to frozen foods for many years and some people didn't want to use them. The changes in lifestyle and in the quality of products brought more people into the fold and this was good for the total frozen food industry. However," he continues, "the quality of the products in the total industry has to be consistently good because if the consumer tries one product and isn't satisfied, we'll all lose a customer. The key is to take the $500 million prepared foods dinner business and bring it up to $800 million."

Pillsbury's George McCarthy feels that traditional TV dinner products had a high child usage. "The old TV dinners were used almost as baby sitters. Today, we major trend is what I like to call 'the disordered meal occasion.' This means that traditional family meals don't happen very often anymore. After all, the single biggest trend to boost frozen entrees was the increase in women working outside the home."

Variety is indeed the spice of life--especially where dieters are concerned--and manufacturers such as Stouffer and Foodways National are carving their niche in the marketplace by luring weight-conscious consumers with out-of-the-ordinary, premium-priced, calorie-control items such as Lean Cuisine's Zuchini Lasagna and Weight Watchers Chicken Oriental with Ginger Sauce and Oriental Vegetables, respectively.

"There's definitely growth in the low-calorie meals-for-one that are of top quality," says the grocery merchandising manager of a top chain. "Manufacturers are trying to get a buck for them, and they're succeeding."

"We brought items into the line that were new to the marketplace," says Jerry DeCroce, Stouffer's vice president of marketing. "We're pleased with the image Lean Cuisine has--we're a line of calorie-control food that tastes good."

"The number of people who are interested in diet and health has been mushrooming," says Gerald Herrick, president of Foodways National, explaining that the Weight Watchers line has two segments of customers: those who participate in the organized Weight Watchers classes and those who are simply counting calories on their own. He considers the line to be in the same "class" as LEan Cuisine, and says, "Stouffer's reputation for quality has helped bring credibility to calorie-reduced products."

Other areas of new product activity are in non-gourmet-type ethnic lines which are often Mexican, Oriental or Italian in flavor. For example, Del Monte has just upgraded its Chun King Dinner line and has added some exotic new items such as Crunchy Walnut Chicken, according to Charles Weiss, vice president of marketing for Del Monte Frozen Foods Inc. Weiss says the company is also capitalizing on the growth of ethnic foods with its Patio-brand burrito items.

He describes the frozen foods market as a giant puzzle. "If you step back 50 steps, it all looks like one picture. But as you get closer, you see that many pieces make up the total picture. While I think premium-priced items are what's sexy now, an awful lot of items which have nothing to do with premium--such as snack and mini-meal items--are growing in tonnage. There are also lots of things in regular frozen main meals which are growing rapidly--but sometimes they get lost since they don't have as much sex appeal as the premium lines."

Most retailers would agree since they are still citing the old faithful frozens staples, such as orange juice concentrate and blanched vegetables, as their top sellers. (It should be noted, however, that at many chains, items such as ice cream and frozen meat products are not considered to be part of the grocery frozen food department and are rung up on the dairy and meat department keys respectively.) Oldies Still Goodies

"Premium dinners are doing well," says Frozen Foods Buyer Alfred Leffel of New York's Waldbaum's chain, "but certain blanched vegetables--like broccoli and string beans--still outsell them. In fact, private label broccoli is our number one category."

It's not surprising that at New York's Sloan's Supermarkets, where upscale entrees do so well, the vegetable items that rank as the number two category are not the plain, blanched type, but the higher-priced prepared vegetable varieties. "Our stores are in upscale areas, so high-end products do better," says Chairman Rose, who emphasizes that the chain still does well with blanched vegetable items. The third best selling category at Sloan's is juice, says Rose, adding that "pizza never did well in our stores since there's a pizza parlor on any block in a metropolitan area."

At Corpus Christi, Texas-based H.E. Butt Grocery Co., which received the Frozen Food Industry's Supermarket Merchandiser Award at last year's NFFA convention, frozen concentrate is the number one selling frozen category, according to Perishables Buyer Rick Benner. He says this is followed by pizza, which the chain promotes heavily.

Frozen Food Buyer Tom Cascanet of Price Chopper Supermarket/Golub Corporation in Schenectady, N.Y., also cites juices as number one "by far" at his stores, followed by blanched vegetables. Here, however, pizza is on the decline.

And at Dallas-based Tom Thumb, Frozen Foods Buyer Joe Carrabba says, "Juice is still our number one item, and pizza is number two. With pizza, it depends on what locale you're in. We carry from 60 to 75 brands, flavors and sizes and do well with it." Although "vegetables are still very big," he says the sales are going to the new prepared varieties and the blended vegetable items.

Super Valu's Hargrelious feels that part of the reason for orange juice's continued tonnage success stems from the fact that competition is keen and manufacturers have been stepping up advertising. "Everyone's fighting over it," he says, adding that many shoppers are still opting for the lower-priced private label varieties. "Customers are buying these items even though companies like Coca-Cola Foods and Procter & Gamble have been going all out."

Kroger Sav-On's Boone is no stranger to "orange juice wars." "Unfortunately, in the Carolinas, we're in a war with fresh half-gallon orange juice vs. frozen concentrate. It's cheaper and it's already made up, and this hurt frozen. We're also in a big test market area and this year Citrus Hill, Procter & Gamble's new juice intro, and Tropicana are really going at it, with Tropicana coming in to undercut Citrus Hill. Because of the war with fresh orange juice, we started to run super specials on frozens and brought our frozen orange juice sales up 23% this year, which is not bad since fresh was up 210% over last year." The division used tactics such as breakfast tie-in promos and frying pan deals to bring back some of the frozen juice business, he says. On the Sweet Side

Rose, Benner, and most others agree that the baked goods category has been in a slump. Industry observers attribute this to high pricing and to the increased number of in-store bakery sections. However, there's always the exception to the rule. In the case of Schenectady, N.Y.-based Price Chopper Supermarkets, it's a matter of location.

"Frozens' percent of total store sales is 8.8% and climbing right now," says Tim Cascanet, "and the most drastic increases are in breakfast and sweet goods. We attribute this to the colder weathe now, since the weather here changed drastically from hot to cold in just a few weeks last fall. With people in this area being confined indoors, more frozen foods are bought in the winter."

The climate factor can also have a positive effect on ice cream sales. At Los Angeles-based Vons, which features 42 novelty items, ice cream is a year-round big seller and Gary Edwards feels the weather has a lot to do with it. On the opposite coast, Waldbaum's Leffel also reports that ice cream accounts for a healthy 2% of total store sales and takes up 36 to 48 feet in the frozen food case.

At Tom Thumb, where ice cream is a big category, the products are all direct store delivered. Carrabba says four full brands and a lot of novelty items are featured.

H.E. Butt has its own ice cream manufacturing plant and offers a premium line as well as a price-image line and novelty items, according to Benner. "In all, we offer 80 regular items and 25 novelties,"

he says. "Ice cream is sold adjacent to the frozen food section and we do our best merchandising with it that we can on the endcaps. We also run ice cream every week on our ad."

While ice cream is always a "good mover," at the Price Chopper stores, Cascanet says regular items do better than novelties during the winter months. He adds, "The old standards are doing better than the upscales here. Our private label--which is not an all-natural--is doing well. It's a matter of price and we promote lower-priced ice cream more."

Although some operators--like Florida's Publix--are strictly national brand oriented when it comes to frozen foods, many have had success with private label lines, and some even offer generics.

All three are available at Price Chopper, according to Cascanet. "Private label does the best in movement, followed by national brands and generics. Some generics take hold, others die a natural death. We call ours, 'Value Pack.' They are private label generics in black-and-white packaging."

"We do well with both name brand items and our own private label," says Sal Gargiulo, buying and merchandising director of frozen foods at New York's D'Agostino's, who feels that each line has its own customer.

At Safeway's Midwest Division, Larry Majore says, "We do better with national brand frozens, with the exception of blanched vegetables." On ice cream, the division does well with both its priate label and high-end gourmet-type items.

"We have a control label in the vegetable section, a private label juice concentrate, a private label retail pie, and a private label whipped to--and that's it," says Publix's Monte Thornton. "We're brand oriented and we offer no generics in frozens. We never have and we never will." Spaced out

With over 1,500 frozen food products fighting for space and new items coming on the scene fast and furiously, space allocation is a major consideration for supermarket operators. According to A.C. Nielsen's special report in Progressive Grocer's December 1983 issue, and linear feet of display space given to frozens increased 4.5% last year. Still, lack of space remains a problem for most operators who must weed our slow movers to accommodate frozen lines that are currently "hot."

At an Eastern chain, where frozens usually take up 300 linear feet of display space, the buyer says, "We must cut down on othe sections of the case to fit in these new items. We can't expand the stores, so we must utilize the case itself. If the emphasis is on prepared foods, we must regroup. In our area, for instance, pizza is not selling well and we may have to cut that section down from 8 feet to 6. We must condense where we have to and be flexible enough to keep our eyes and ears open to meet consumer demands."

At Tom Thumb, where frozen food sales--including ice cream--account for approximately 10% of total store sales, Carrabba agrees.

"We try to carry as big a variety as we can. But, like everybody else, we're having to curtail items. We're running about 99% of filled at the warehouse. We tried to set at a 3% open slot at one time, but can no longer do that. Generally, we must remove something to put in something new."

Sloan's Rose calls the space situation "terrible," and adds that "since the new entrees fit our stores so well, we must cut back on any other items that are not selling." Frozens' percent of total store sales at the chain in 7%, not including frozen meats or ice cream.

At Price Chopper stores, pizza sales are on the decline and Cascanet says he's looking at the planograms closely. "We may be expanding in some sections such as upscale dinners," he says, adding that manufacturers are included in decisions on which products to eliminate and which to make room for.

Publix's new prototype stores have 63 glass-door uprights while some of the older, conventional units have as few as 32 uprights. The chain offers approximately 750 to 800 frozen items, according to Thornton, who points out that conventional stores with 32 cases simply cannot carry them all. The individual store's frozen foods manager has the authority to select what's right for his store and what items must be deleted to accommodate new ones. "The smaller stores may have fewer facings but they still have all the new items since these are introduced in all our stores at the same time," Thornton says.

At D'Agostino's, where frozen food sales account for 6.5% to 7% of total store sales, excluding ice cream, Gargiulo does not like to take on more than 500 or so items. "We don't want to make the individual frozen food managers the buyers, and what will happen if we offer them 700-plus items, since they can't possibly fit them all." Energy Cost Control

Although not the hot topic it was a few years back, concern over the high cost of energy is still a major factor in frozen food selling. In an attempt to keep the aisle warmer, many operators have converted to doored cases for remodelings and new store openings. "As we update our older stores, we're going to glassdoor uprights. But our old stores still have coffin cases," says Price Chopper's Cascanet. This situation is fairly typical.

"We've been using doored uprights for 20 years now," says Publix's Thornton. "We're concerned about energy costs all the time. Doored cases also offer better product visibility and help the products stay cleaner. We can also get more product in the case since we can adjust the shelves."

At 150-store H.E. Butt, where a combination of coffin cases, five shelf decks, and uprights with and without doors is used, the emphasis today seems to be more on merchandising than on energy saving. "At the time of the energy crunch, the company spent a lot on doored cases. But the feeling now is that the advantage of going to open multidecks outweighs the savings of doored cases," says Benner. "We feel it's easier for a shopper not to have to open doors and that an open deck lends itself more to the kind of sales job we need to do." Boosting the Category

Despite frozens' recent gains, Super Valu Chairman and CEO Mike Wright referred to the category as "the missed potential," when he addressed an audience of manufacturers and brokers at the National Frozen Food Convention last year. He asked, "Why aren't frozens doing 10% of store sales and why isn't tonnage growing at a record rate?" One of his main points was that frozen food manufacturers may have failed to communicate to shoppers the quality, value and convenience of these items.

The frozen food merchandiser and buyer of a leading East Coast chain agrees that, "As an industry, we have to tell Mrs. Consumer in our ads that frozen is better than fresh because it is fresh-frozen. Fresh is maybe three to five days old. Frozen items are frozen the same day. We must also emphasize the no-salt additive property of most blanched vegetable products."

Trying to do all this--and more--is the Food Action Communications Team, known as FACT, an all-industry informational center that operates under the New York public relations agency of Creamer Dickson Basford. FACT tells the positive story of frozen foods to the public and the media to help boost the category by promoting the acceptance and use of frozen foods for all meal occasions. Among the promotional materials it produces are consumer-oriented brochures such as "Frozen Foods, Value and You," and "Frozen Foods and Microwave Cooking."

Investments in advertising by frozen food manufacturers should also continue to grow. "If you go back in time and look at who the frozen foods manufacturers were at the beginning, you'll see that the picture has changed," says Del Monte's Weiss. "More of the sophisticated consumer package goods companies such as RJR Foods and H.J. Heinz are now in the frozens field, and they recognize the need for marketing. The attractiveness of the industry has also caught the eye of other major advertisers like Procter & Gamble, which is going in with beverages."

Most retailers also seem convinced that more space should be devoted to frozens in their weekly ads. In the 12 months ending in June 1983, 7.5% of the space in a grocer's ad was devoted to frozen foods, according to Majers Corporation, which tracts retail print ads. This represented a slight increase in ad space versus the same period in 1982. Showing a significant increase in feature ad count during the third quarter of 1983 was frozen dinners, which was up 144% over the same period the year before.

"We run more full page ads now and it has paid off since our frozen food sales have increased 32% over last year," says Boone, of Kroger Sav-On.

One chain's buyer says, "We feature 30 to 40 frozens items a week, 75% of which are national brands." Another says he's committed to at least 15 featured items per week.

Sloan's runs a full-page frozens ad eight times a year and also devotes a full page a week to frozens in its store circular. At Price Chopper, a half-page of frozen food specials appears in the ad every week and two full pages run in a roto about once a month. In-Store Promos Pay Off

Frozens is a traditionally hard-to-merchandise section, but some operators have found that in-store promotion is worth the effort.

"We promote frozen foods extensively, and have contests for employees to get them enthused about selling frozens," says Kroger Sav-On's Boone.

At Vons, three endcaps are merchandised every two weeks, or about 26 times a year, according to Edwards. He adds that, besides featuring frozens in its weekly ad, the chain runs freestanding frozens ads tied in with seasonal promos. For example, a Halloween Pizza Party ad last fall supported an in-store display featuring pizza and beverages as party go-togethers.

"There's not a whole lot you can do with the upright door set except to sign it," says Benner of H.E. Butt. "We do not use portable freezers to promote since we want clutter-free aisles. However, at this point, we've been incorporating more endcaps into our larger superstores and merchandise from that angle." He adds that when the chain takes advantage of supplier off-invoice allowances, it either promotes the specials in its ads or opts not to advertise but to offer the items instore at "10% off" for a four-week period. "The customers have begun to identify with the 10% discount and they actively look for the in-case signage now," explains Benner.

Most grocers inddicate that they are anxious to review point-of-purchase materials from frozens manufacturers, but how much of it actually gets used?

"We only use it when we have an endcap available," reports a grocery merchandising manager who says he simply lacks the space for p-o-p.

Vons' Gary Edwards says he makes use of good quality p-o-p material for special promos. "We don't use much of the day-to-day stuff like danglers because the department gets too cluttered-looking."

"We use manufacturer p-o-p as best we can," adds H.E. Butt's Benner, "but we believe in clean, uncluttered cases and need to restrict what goes up." The chain does feature manufacturer-supplied tearoff pads on front-of-the-store bulletin boards, he adds.

Chains like Waldbaum and Publix say they not only use good quality p-o-p materials, but would like to see more from manufacturers. However, the feeling at the manufacturer end is that the materials are under-utilized by grocers.

"We offer p-o-p for all our items now, but, as a rule, not much is used," says Armour Foods' Rago.

Del Monte's Weiss agrees. "We think there's only limited opportunity for p-o-p materials as more and more retailers go to freezers with doors."

ConAgra's experience has been a more positive one. According to Tani Wolf, director of new products, the p-o-p materials for Light & Elegant entrees feature the same food photos that are on the product's packaging, and a large 5-foot poster the company offers has been used at the front of some stores and in the windows. Tasting Is Believing

A frozen food promotional device that is usually well received at the retailer end is the product demonstration with sampling.

"We like sampling," says Art Reginelli, frozen food buyer for the 11-store Heinen's chain in Cleveland, Ohio. "It's a good tool, but it must be for something that's new-not for a commodity item. We're going through a series of demos now for a frozen simulated crab leg item. The manufacturer is preparing it in salad form and serving it to shoppers in small paper cups."

Adds the grocery merchandising manager of a national chain, "We take any demos we can get because they not only help people see and taste the product, they generate excitement in the stores."

Gary Edwards of Vons explains that his company has a demo service in which the frozens department frequently participates. "The department coordinates the demos and works with the distributor to make sure the productis at the store when the demonstrator arrives. If the product is not there, we don't charge the manufacturer for the demo. We charge only a minimum fee for the service and coordinate everything so there's no conflict with competitive items. We're one of the few supermarket companies that offers this service, and it gets us more demos."

However, some manufacturers are negative on demos because of the expense involved. "Complete dinners are difficult to sample," explains Armour's Rago, "so we don't do demos. We do use couponing. Next to in-store product demos, that's the most effective sampling device."

Publix's Thornton recalls that his chain has sampled frozen items such as pizza, baked beans, ice cream novelties and juice successfully so far. "We haven't gotten into demos on gourmet entrees yet" he adds, "but then, those are selling by themselves."
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Author:Linsen, Mary Ann
Publication:Progressive Grocer
Date:Jan 1, 1984
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