Consumers are putting discretionary spending on ice and heading for the frozen food section.
Frozen meal components such as prepared proteins and raw vegetables have become desirable to penny-pinching consumers, since these items offer convenience, are sometimes priced below their fresh counterparts and pose a minimal risk of spoilage, industry observers told SN.
“In previous downturns, we saw a rise in convenience foods like prepared meals and frozen entrees, but this time around we're seeing a rise in things like frozen side dishes, frozen vegetables and frozen poultry,” said Sheila McCusker, editor of Information Resources Inc.'s Time and Trends report.
Sales of frozen processed poultry rose 7% during the first and second quarters combined, vs. the previous year, according to IRI. During the same time period, frozen vegetable sales grew 2% and frozen side dishes rose 1.2%.
“While sales of frozen meal components are growing, actual convenience meals like frozen dinners and frozen pizzas are down,” noted McCusker.
Consumers are shying away from frozen meals, since they tend to cost more than frozen ingredients, and oftentimes shoppers have to purchase multiple units in order to feed their families, she said.
Sales of frozen pizza were down 2% during Q1 and Q2 when compared to the prior year, while sales of frozen pizza dough were up 2.2% during the same time period, supporting the idea that shoppers have taken a do-it-yourself approach to meal preparation.
“Shoppers appear to be spending less at restaurants and eating home more, and they're looking to the store to provide meal-building solutions to help them feed their families,” said Jon Hauptman, partner at Willard Bishop, Barrington, Ill. “The frozen food department offers a number of new and innovative meal solutions.”
Stop & Shop recently began extolling the value of frozen ingredients during its Affordable Food Summits.
The in-store events, which kicked off in July, serve as a forum for consumers to express how the cost of food is affecting their daily lives, and for local politicians and economists to describe how consumers can best save money on groceries.
“Customers love and appreciate the summits, and they're telling us they want more meal suggestions and recipes,” Faith Weiner, spokeswoman for Stop & Shop, told SN.
Frozen Ideas
In response to the feedback, the chain recently began distributing handouts featuring meal recommendations during the events. Among the suggestions are a recipe for charbroiled veggie burgers with edamame that calls for frozen edamame, and a soft taco meal recommendation that has frozen corn among its ingredients.
“We recommend frozen vegetables as a great alternative to fresh, since they've got all the nutrients, and you can take the proper portions out and use them as needed,” said Weiner. “Frozen vegetables also offer a great value.”
Earlier this month, Stop & Shop featured all varieties of its store-brand boxed frozen vegetables, 9-12 ounces, at 10 for $10, when purchased with a loyalty card.
Likewise, the Kroger Co., Cincinnati, is aggressively promoting its frozen foods.
It recently offered loyalty cardholders select varieties of Aunt Jemima and Armour Sizzle & Serve breakfast entrees and Banquet Entrees, at 10 for $10; a buy-one, get-one-free offer for frozen Kroger Cooked Cocktail Shrimp, 16 ounces; and 25% off Cascadian Farm Assorted Organic Frozen Fruit and Organic Farm Frozen Potatoes.
Kroger has set its promotional sights on frozens to better compete with Wal-Mart, observed Hauptman.
“Wal-Mart has taken a very aggressive stand in frozens, offering extremely low prices throughout the department, so it's setting new reference points for shoppers,” he said. “Kroger is doing this to satisfy lower-price expectations.”
Given the section's increased traffic, now is the time to fine-tune frozen pricing, Hauptman advises.
“There has been a lot of exciting innovation in frozens, and consequently it's attracting more shopper attention, so that increases the importance of being right on price,” he said.
It also behooves retailers to optimize consumers' perception of their frozen food prices, since these foods carry the highest gross margins in Center Store.
Hauptman explained that items in the section are subject to SKU rationalization, since space allocated to frozens is fixed.
“Items that don't perform well get cycled out, so that elevates the performance of the entire category,” he said. “Because there is so much innovation in frozen foods, we're seeing retailers put in far more frozen doors than ever before in new stores.”
COLD COMPONENTS
To help introduce shoppers to frozen innovations, Hauptman suggests that retailers prominently feature frozen components of meal solutions. He acknowledged, however, that doing so is challenging, especially when frozen ingredients are mixed with shelf-stable foods.
Kroger recently began promoting its corporate-brand frozen Diced Grilled Chicken Breast and Green Giant frozen vegetables that come in a microwavable bag, as part of an easy-to-prepare Pasta Night Meal solution that also includes a Macaroni Grill Dinner Kit and Pillsbury Crescent rolls.
The meal recommendation was scheduled to be promoted on fliers distributed at the checkout in 700 Kroger locations this past weekend, according to Tara Tracki, marketing director of AOL's shortcuts.com.
Through Nov. 29, Kroger shoppers who visit shortcuts.com can load $2.75 in collective savings on the Pasta Night meal components onto their loyalty cards with the click of a mouse.
“We collaborated with both Kroger and General Mills on this offer,” said Tracki. “We know that consumers are looking for the perfect marriage of savings and convenience, so [frozen foods] make sense.”
The three partners are also offering $2.25 in savings on a “Betty's Birthday Deal” that features Kroger's corporate-brand Private Selection ice cream, Betty Crocker cake mix and frosting, and Kroger Designer Plates and Cups, through Dec. 8.
Kroger, shortcuts.com's sole retail partner, didn't return SN's request for comment.
Although it's too soon to gauge redemption rates on the Pasta Night meal deal that began Oct. 9, Tracki is pleased so far.“The tests are going very well, and at this point we couldn't be happier,” she said. “Our customers love it and our partners love it.”
Although Publix hasn't added any frozen items to its list of “Essentials” — items such as milk, eggs and canned vegetables that it's heavily discounting for an unspecified period of time — it's offering generous deals on items merchandised from its freezer cases. It's also suggesting that shoppers consider cooking with their microwaves, since “microwave ovens use less than half the power that conventional ovens do and cook far more quickly.”
The Lakeland, Fla.-based retailer recently promoted frozen buy-one, get-one-free offers on Farm Rich French Toast Sticks and Celeste Pizza for One; Breyers Ice Cream, 48 or 56 ounces, three for $10; and Weight Watchers Smart Ones entrees, four for $10.
“Each week, we have sales on both traditional frozen foods and healthier [frozen] alternatives, so that makes frozen foods a more feasible option for families,” Maria Brous, spokeswoman for Publix, told SN. “Our frozen pizzas seem to do especially well, since they allow consumers to feed a larger family for a lesser cost.”
