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Will private label enjoy a feast while brand names have a famine?

Long dormant frozen meal category suddenly perks up for private label, as leading brand takes a beating in friend chicken in some USA markets.

They aren't even supposed to be called frozen dinners any more: they're "meals." They have hardly been a blip on the radar screen as far as market volume and share go. So why is Tigard, Oregon-based Western Family Foods introducing a whole line of them?

Because they're hot, that's why, explained Brad Tolliver, product manager, who decided to get Western Family into the category after learning that a major chain operating in Portland was outselling Banquet with its private label. "They're just like Banquet's, but they retail for 25% less," he told Quick Frozen Foods International.

Western Family will have its line in USA stores beginning about April 1, Tolliver predicted. It includes 9.5-ounce meat loaf, nine-ounce chicken, 11-ounce Mexican, 9.5-ounce salisbury steak and 9.25-ounce turkey meals. But the buying and marketing organization won't stop with those. Some time this summer, it will roll out 28-ounce family entrees: turkey and gravy, chicken and dumplings, and salisbury steak.

"It's a good selling category out here," said Tolliver. Family entrees do well in most of the country, for that matter, under the Banquet and On-Cor brands: even if the recession is over, a lot of budgets are still tight. And they're apt to get tighter if President Bill Clinton's proposed tax hikes get Congressional approval. With income gaining slowly, if at all, for many families, food dollars have to be stretched -- and private label in down-home categories like frozen meals and family entrees is one of the most effective ways to stretch them.

Bone-in fried chicken is another of those basic categories, long dominated by brands like Banquet and Weaver, that is being broken open by private label. "Fried chicken is our biggest recent success story," reported Robert D'Agostino, frozen food buyer for Shurfine-Central Corp., Northlake, Ill. "We've done $1 million this past year in just one SKU." At Fleming Companies, Oklahoma City, Ok., the item has been doing "extremely well" since it was introduced last spring, said frozen food buyer Kurt Schumacher.

Dominick's Finer Foods, also of Northlake, Ill., has rolled out a line of frozen meatballs in 24-ounce boxes in Swedish, sweet and sour and burgundy sauces (also what may be the first private label hot and spicy chicken wings in the country). Frozen meat has traditionally been a non-starter, even in national brands, except for items like sandwich steaks. Winn-Dixie Stores ("The Beef People"), Jacksonville, Fla., is more visible in the category, with hamburger patties in both the premium W/D and economy Southern Pride private labels, and First National Supermarkets, Windsor Locks, Conn., has even introduced beef patties in its upscale Sensational line. But what Dominick's is doing with meatballs might be a sign of things to come in what could become a major arena for private label.

Vegetables Sag

Yet at the same time, Shurfine-Central is getting out of a category in which sales have sagged: vegetables in cheese and butter sauces. "We had three vegetable-in-sauce items, and our distribution was down to two or three warehouses," said D'Agostino. During the past year, even branded sales of frozen prepared vegetables have plummeted, in part due to health concerns. But D'Agostino says there are other factors: frozen vegetable sales in general have been flat, due to heavy promotion of canned vegetables that have been seen during the past year as a better value. Moreover, sales of entrees including vegetables are up, which cuts into sales of vegetables as such.

Over the long term, there is another change in the private label frozen vegetable market as consumers shift their purchases from the traditional 10-ounce cartons to 16-ounce and even 32-ounce polybags, he said. Unit volume thus appear to be down, although poundage sales may be stable or increasing. The economy obviously has a lot to do with this, just as it has to do with the breakthrough for private label in meals and family entrees. Shurfine now offers three-pound Shur Valu club packs of commodity vegetables -- peas, corn, beans and mixed vegetables -- and those, too, are doing well. (Fleming has four-packs of corn, peas, mixed vegetables, cob corn, strawberries and mixed fruit, while Richfood has rolled out a 40-ounce -- "not quite as big as a club pack" -- line of corn, peas and beans in its Econ secondary label).

But the hottest category right now is stir-fry vegetables, in which Shurfine is launching a 16-ounce mix of green beans, sugar snaps, celery, water chestnuts, onions and red bell peppers. Another innovation is a form of convenience packaging called the Le Loop Bag, which has been adopted by Safeway Stores, Oakland, Calif., for Bel-Air 32-ounce polybag vegetables. The packaging features a tear-off plastic strip with a loop that can be used to tie off the end of the bag after it has been opened. The Le Loop Bag might be adopted by other retailers and wholesalers, especially if the trend towards larger sizes in private label continues.

Curly Fries Proliferate

Curly fries, which couldn't be found anywhere in private label a year ago, are all over the place now. Shurfine and Western Family both claim to have been the first to get them in the stores last summer, but now they are stocked by Winn-Dixie; Kroger, Cincinnati, Ohio; Giant Food, Landover, Maryland; Pathmark, Woodbridge, N.J., and others. Winn-Dixie also offers seasoned fries under its Astor label, an item introduced by Delchamp's, Mobile, Alabama, in the Food Club label from Topco Associates, Skokie, Ill. Curly and seasoned fries retail in 32-ounce polybags; private label prices observed for the curly variety include $1.79 at Winn-Dixie and $1.89 at Winn-Dixie and $1.89 at Giant.

Downsizing Trend

In another major category, private label is being forced to downsize packaging to meet branded competition. "We're in the process of putting our frozen fish program in line with the counts of the national brands," confirmed Billy L. Raines, director of controlled brands at Richfood, Richmond, Va. Downsizing is a strategy the brands have used before in such categories as detergents and pet foods, but this is apparently the first time it has been used in frozen foods. Shurfine is likewise downsizing its line, one of the most extensive private label frozen fish programs in the country; but D'Agostino said the buying cooperative is continuing to promote the larger sizes for the current selling season. Meanwhile, Banquet has downsized its fried chicken, from 28 ounces to 25 ounces, and Shurfine will have to do likewise, he added.

Affordable OJ

In yet another major category, private label orange juice prices have plummeted in the wake of a forecast by the U.S. Department of Agriculture of a bumper Florida orange crop of 188 million boxes this year. As of Feb. 1, they were $16.25 for a 48/6 easy-open case, $15.45 for a 14/12 and $20.34 for a 24/16. Low prices aren't necessarily bad news for the industry, because retailers and wholesalers can move great volumes and consumers may decide that, as a press release from the Food Institute put it, that orange juice is "Affordable All Day Long." Winn-Dixie, meanwhile, is offering a 32-ounce can (twice as big as the largest size most chains carry; "Makes 1 Gallon," reads a starburst on the can) in its Astor label, seen retailing recently at $2.49 (a "Power Buy" special; the item regularly sells for $2.59.

Premium frozen pies seem to be another hot category in private label these days. Best Choice at Associated Wholesale Grocers, Kansas City, Kansas, includes apple, Dutch apple (with a crumb crust) and pumpkin varieties, while the Prestige line at Winn-Dixie offers all of those plus pecan, lemon-meringue and key lime. Pathmark, Woodbridge, N.J.; Kroger, Cincinnati, Ohio; and Scrivner, Oklahoma City, Ok., all use their standard private labels for the same kind of product. That's what the latest entries, Shurfine and Western Family, are doing, too. Western Family is sourcing cherry as well as apple, Dutch apple and (tentatively) peach pies that "bake-off better than Mrs. Smith's," said Tolliver. (They will be baked on-site, but packaged as regular private label rather than as bakery items). Shurfine is going with thaw-and-serve apple and Dutch apple, but in a 32-ounce size to offer a better value than Mrs. Smith's at 26 ounces.

Egg Noodles

Shurfine may be the first in the country to private label another frozen category, egg noodles. "It's not a real big category, but we've got enough people in the Midwest who use them in soups, stews, beef stroganoff and the like to justify getting into it," explained D'Agostino. Shurfine is offering two SKU's, with yolk and without, positioned against Ream's. Garlic bread is another new introduction for Shurfine, while one of its greatest successes has been burritos: they were introduced just last September, but 20,000 cases have already been sold through eight divisions. Western Family now wants to get into the burrito business, and is also moving into bagels (long a popular PL item in the East, but not so much in the West) and egg substitute.
COPYRIGHT 1993 E.W. Williams Publications, Inc.
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Publication:Quick Frozen Foods International
Date:Apr 1, 1993
Words:1533
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