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Paced by Britain, Germany and France, European frozen pizza market on rise.

Paced by Britain, Germany and France, European Frozen Pizza Market on Rise

While precise up-to-date numbers are hard to authenticate, the trend is clear: pizza is hot and getting hotter.

Trying to get a handle on the overall market for frozen pizza around the world is almost impossible. One might as well try reading the toppings, as the ancient Romans read chicken entrails.

Not that a lot of statistics can't be found in The Pizza Industry: A Report on the Market in the United Kingdom, Europe and the USA, produced last year by the London Business School. But it's not always clear what they add up to.

For example, collaborators Mairead Carvill and Ashok Khosla were able to glean that frozen pizza consumption in Germany was 59,600 tons in 1990 (perhaps a preliminary figure, as the German Frozen Food Institute later reported 67,818), vs. 34,000 in France in 1989 and (apparently) less than 25,000 in the United Kingdom.

Well in Britain, it is noted, there is also a large market for chilled pizza, although at 29 million [pounds] for 1989 it trailed the 80 million [pounds] market for frozen pizza. By contrast, chilled pizza accounts for only five percent of pizza sales in Germany. The reason given was: "due to lack of shelf space and difficulties in distribution and maintaining the cold chain."

Although there is an appendix of "market research consultants," it isn't always possible to determine the sources of information in The Pizza Industry. A flyer from McVities on behalf of its San Marco brand, for example, put 1989 sales of frozen pizza at 87 million [pounds] -- almost 10% ahead of the study's 80 million [pounds] figure. Both agree that the category has grown rapidly, but McVities was more up to date with a 110 million [pounds] figure for 1990 and a 127 million [pounds] estimate for 1991. The company also cited an increasing share for "added value" frozen pizza, at 48% (43 million [pounds]) for 1989 (the study pegged it at 42%), with an estimate of 57% (72 million [pounds]) for last year.

Carvill and Khosla had a tough time getting figures at all -- the sources report statistics only for retail selling prices of chilled ready meals, including pizza. They figure pizza accounted for 16% of all chilled sales in 1989, and project a decline in that share -- but acknowledge they haven't reckoned on fads such as Teenage Mutant Ninja Turtles pizza. Frozen pizza statistics -- in sterling but not in tonnage terms -- are more readily available, and they show that even though pizza is growing, its share of the frozen ready meals sector declined steadily from 35% in 1984 to 21% in 1989. In both cases, there has been more opportunity for innovation in other types of ready meals -- especially for microwaveable products, the study found.

But in any case, fast food is where the real action is. Sales of fast food pizza restaurants grew 75% between 1984 and 1989, Carvill and Khosla reported -- they didn't cite a total, but 15% of the 2.9 billion [pounds] total given for 1989 works out to 435 million [pounds], compared to 200 million [pounds] (11% of 1.82 billion [pounds]) for 1985. The 75% increase for pizza was in constant, rather than inflated sterling value. Much attention is given to brief histories of fast food chains. Pizza Express was the first in Britain while Pizza Hut and Pizzaland are the two largest (or is it Pizza Hut and Perfect Pizza? -- the text and the tables don't agree), while Domino's is spearheading home delivery.

The German Scene

Fast food is a relatively small segment of the German pizza market, a "substantial share" of which has "been traditionally dominated by thousands of small family pizza restaurants." Pizza Hut showed up in 1983, and had managed to open 42 outlets by 1989; Pizzaland gave up after a year.

In the dominant frozen sector, Dr. Oetker and Langnese-Iglo used to account for more than half the brand sales, with the former more active in the ethnic sub-sector. (Recent figures from Nielsen, however, ranked Wagner as No. 2 with a 14.5% share followed by Langnese's 10.3%. See related story in this section.) Per capita pizza consumption grew by 75.9% between 1983 and 1988, and pizza seems to be a relativley low-ticket category in Germany -- it accounted for nearly 23% of the ready meals volume in 1990, but 18.5% of the value. Nonetheless, its growth rate is among the fastest in retail frozen foods.

Big Value in France

Frozen pizza seems to be a bit more upscale in France; as of 1989, it accounted for 47% of the volume but 50% of the value of the frozen entree market. Volume is expected to increase at an annual rate of between 10% and 20% for the foreseeable future. Segmentation of the market is increasing, but in 1989 "basic varieties" still held a 70% share, vs. 15% of "thin crust" offerings, 10% for traditional, four percent for Italian styles and one percent for low-calorie. "Takeaway catering in France is only in its infancy," and fast food pizza outlets don't amount to much -- there were 54 of them in 1988, accounting for only two percent of fast food sales.

In Italy, as one might expect, pizzerias and restaurants with pizzerias are the name of the game. There were 2,237 of the former and 8,393 of the latter in 1987, accounting for 7.1% and 13.5% of all restaurant sales, respectively. Presumably they account for most of the pizza consumed in Italy, apart from that baked at home by traditional housewives. Frozen pizza, not even reported in the Carvill-Khosla study, accounted for a small 8,920 tons in 1990, according to the Italian Frozen Food Institute. Chances are that chilled retail pizza is virtually unknown in Italy.

Good Spanish Prospects

As for Spain, frozen pizza there accounted for a minuscule 3,036 tons in 1988, or three percent of a frozen food market put at 101,500 tons. That total FF market, cited from Dym Panel/Almarket, bears no resemblance to the figures supplied by the Swiss Frozen Food Institute (original source unknown) and used in this magazine's 1991 Global Frozen Foods Almanac -- is the figure for pizza any more reliable? Prospects for growth are good, in any case, because the economy is improving. According to one estimate, there are also 15,000 independent pizzerias in the country, and the number of fast food pizza outlets stood at 67 in 1989, with Pizza Hut, Pizza World and Mama Mia the leading players. Fast food pizza volume is expected to reach 7.25 billion pesetas in 1995, vs. 3.6 billion in 1989.

Fast food pizza has made a very slow start in the Netherlands, with Pizza Hut and Pizzaland together having seven outlets. The retail frozen pizza market is apparently negligible, and isn't even mentioned in The Pizza Industry. In neighboring Belgium, by contrast, there are 35 fast food pizza chain outlets, with 45 anticipated for 1995. Belgian pizzerias have a more upscale image than other fast food operations, and are thus concentrated in affluent cities like Brussels and Antwerp. Pizza Hut accounts for 47% of the market and Pizzaland for 30%. Retail frozen pizza, again, isn't significant enough to be mentioned.

There doesn't seem to be much of a common pattern to the pizza market in European countries, and Carvill and Khosla don't seem to think the post-1992 single European market will make much difference. At any rate, the frozen pizza market for all of Europe is dwarfed by that for the United States, which stood at 207,295 tons ($1.16 billion) in 1989 -- and from subsequent Quick Frozen Foods International statistics slipped a bit to 204,574 tons ($1.17 billion) in 1990. Chilled pizza is increasingly important as part of supermarket dairy-deli departments. On the frozen side, pepperoni pizza showed the greatest growth in 1988-89 (+ 1.8%), and sausage pizza the greatest loss (- 1.8%).

United Kingdom Frozen Meals Market

Percent Share by Value
Fiscal Non-Frozen Pizza
 Year Ready Meals Products
 1984 65 35
 1985 70 30
 1986 72 28
 1987 73 27
 1988 77 23
 1989 79 21

[Graphs Omitted]
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Title Annotation:includes related article
Publication:Quick Frozen Foods International
Article Type:Industry Overview
Date:Jan 1, 1992
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