The health trend emphasizing consumption of chicken -- skinless chicken in particular -- is changing the face of poultry sections in supermarket frozen food departments.
Retailers contacted by SN said the instant consumer acceptance of frozen skinless chicken has created a stir in what they termed a steady category.
"The Banquet skinless has particularly taken off with us," said Thomas Outlaw, director of frozen food and dairy at Ingles Markets, Black Mountain, N.C. "It's the No. 1 SKU as far as the bone-in chicken. Customers can get the taste there and feel like they're eating a bit healthier."
Outlaw and others said the emphasis on healthy eating has consumers eating more chicken, something that bodes well for the frozen chicken category, as well as chicken sold in meat departments.
"The tonnage in frozen chicken has been over in the meat department, where it's in the bags and competes with the Costcos and those types of operations," said Marlin Larson, manager of grocery, dairy and frozen at the Sacramento-based northern California division of Albertson's, Boise, Idaho. "Those have really picked up tremendously. On the grocery side, it's been steady because, obviously, more people are consuming chickens today."
According to figures compiled by Nielsen North America, Northbrook, Ill., Larson is right on the money. The frozen poultry category, which primarily consists of chickens, turkeys and Cornish hens sold through meat departments, was up nearly 17% in dollar volume for the 52 weeks ended June 11. The poultry one-food entrees category, which includes boxes of chicken pieces and other packaged chicken products sold in frozen food departments, was up 1.6% in dollar volume over the same span. That follows two consecutive years in which dollar sales in this segment dropped more than 6%.
A buyer for a Midwest chain said the fact that more Americans are eating chicken should boost sales in frozen food sections. "It's bound to have an effect on sales of frozen chicken," he said. "Convenience is still the No. 1 reason people buy frozen food, and what's easier than just sticking pieces of chicken or chicken nuggets in the oven and waiting for the timer to go off?"
He said the skinless chicken from Banquet has been doing "real well" in his stores. "If the manufacturers can continue to come out with products that address the public's health concerns, that can only mean good things for us. We liked the skinless idea, so we added space to the category for that. Otherwise, we've held pretty steady, because sales have held steady."
Other retailers echo his thoughts and applaud efforts by manufacturers to offer healthy alternatives.
"It's good to see the manufacturers getting away from offering only fried chicken with the crispy crusts," said a buyer with a Mid-Atlantic chain. "The skinless varieties are an example of how they're responding to customer demand through offering a more healthy product. "All the reports I hear say how people are eating more and more chicken because it's better for you than other foods. I want products in my cases that will give customers a frozen option in their efforts to eat well."
Albertson's Larson added: "Customers are going more and more to just about anything that's chicken today, especially here in California. Everybody's looking for something that's healthy."
ConAgra, Omaha, Neb., carved the way for frozen skinless chicken in October 1993 when it introduced its Banquet skinless boxed chicken, retailers said. Since then, a honey barbecue skinless variety has been added. A spokeswoman for ConAgra said 2.3 million cases of Banquet chicken were sold in the last year. Of those, 490,000 cases -- or 21% -- have been the skinless varieties.
"Skinless is doing real well," said Jim Armstrong, frozen food buyer for the Miami division of Winn-Dixie Stores, Jacksonville, Fla. "They [skinless varieties] are probably adding to the category."
Sam Ciarde, frozen food buyer at Village Supermarket, Springfield, N.J., has noticed skinless chicken to be particularly popular in rural areas.
The category on the whole is growing faster in his urban-area stores, but "skinless moves in the suburbs."
Other new products are also getting attention. Outlaw of Ingles listed chicken kits from Tyson as another hot product in the category. "We put them in that category; not everyone does," he said. "They're boneless chicken in kits and they seem to be doing quite well. We've tried some others and they didn't do quite as well. In our particular marketing area, $3.99 retail seems to be sort of a barrier. If they keep a competitive retail, I think they'll do quite well."
Hot prices, Ciarde said, are the key to sales. "What's ever on sale is what people want. Put it in the end on sale and you sell it."
Bill Romley, frozen food buyer at Bashas' Markets, Chandler, Ariz., agreed with Ciarde on the impact of sales. "That's really the big way they sell; you give them away for practically nothing," he said, referring to sale prices. "We usually sell a 25-ounce box for $3.39. On ad we put two for $5. That's not rock-bottom on cost, but it's rock-bottom on selling price."
Coupons can help, said Albertson's Larson, but only when done right. "If we can put them in our ads, we get a lot of impact out of them," he said.
Competition from fast-food restaurants is putting more pressure on retailers to run sales on frozen chicken.
"Fast-food pricing has had an effect," said a spokeswoman at Baker's Supermarkets, Omaha, Neb., a division of Fleming Cos., Oklahoma City. Referring to frozen chicken as a "declining category," she said new items, skinless varieties and reformulations, in particular, are driving category sales today.
Recent and expected changes by manufacturers should help the category's growth, said the Mid-Atlantic retailer.
"There's been some reformulation and some increased advertising in the past few months that I think will help bring up the numbers," he said. "Banquet made some changes on its 25-ounce size and now offers fewer but larger pieces than it did. The larger pieces make a better impression.
"It seems ConAgra has been spending more on advertising the Banquet line, and I hear Tyson is supposed to start doing the same with its lines, too."
Outlaw of Ingles also has seen more advertising.
"They're [Banquet] doing a lot of advertising. Of course, they've upgraded their package to a flatter box that makes it look larger, and they do have a bit more chicken in the box. For our particular trade, I don't know if that's going to be a help to their sales or a hindrance, because, of course, we're having to raise the retail to correspond with the cost increase."
That could open the door for private-label products, which now account for only 4.7% of sales in the one-entree segment of the category.
"Our private label's been doing very well," Outlaw said. "We keep fairly low retails on them. It's really taken off." He said Ingles offers bone-in chicken in a 25-ounce package, in addition to chicken tenders, patties and nuggets.
Armstrong said Winn-Dixie also has private-label products across the category under its Madison House label.
A slow but sure increase in product offerings, plus the boost in sales, has resulted in larger sections in most of the chains contacted by SN.
