CHICAGO -- While frozen pizza has been racking up some pretty impressive sales numbers and growth rates, the category could do even better if promoted more and given more space.
George Garrick, president and chief executive officer of Information Resources Inc. here, said an IRI study revealed that pizza outdistances most other frozens category items in terms of response to promotions and overall performance, but receives 30% less space than its sales warrant.
Garrick spoke about the category analysis last month during the Food Marketing Institute's annual convention here. The analysis, conducted for the National Frozen Pizza Institute, McLean, Va., consisted of data compiled through IRI's Infoscan panel of retailers and consumers and March audits of 2,400 supermarkets.
Dollar volume of pizza, Garrick said, advanced by nearly 40% from 1989 to 1994, three times the growth rate of the overall frozens department.
He used 1994, a year in which frozens posted a 4.3% growth in dollar sales and a .2% growth in unit sales, as an example of how pizza has outperformed the category.
"We have almost an 11% growth in dollar sales, nearly a 10% growth in unit sales and an 11% growth in volume sales. This is very significant because it shows it's not just a matter of prices going up; there are actually more people buying more products. You've got a good category going here because you're really contributing actual unit and volume growth on a real basis, rather than just on pricing."
Since 1989, the percentage of households buying frozen pizza has remained steady at about 65%.
Two important conclusions can be reached from that number, Garrick said. The first deals with the category's importance to retailers. "It's very important because two out of every three shoppers who walk through their stores buy frozen pizza." The other is that there is room to grow, since some categories have household penetration of more than 90%.
Garrick said pizza has the highest dollar sales per stockkeeping unit per store of all frozen categories, and is also the most efficient of all frozens categories when promoted.
"Given the preciousness of display space and other promotion vehicles for frozen, this makes a very powerful case for promoting pizza; not only because of its growth, but because when you do promote it, you get a bigger kick. You get more lift than any other item."
Pizza scored well across all promotion types. Price reductions on frozen pizza generate an increase of about 68%. That compares with an overall category average of 44%.
Pizza displays generate an average lift per week per store of about 220%, behind only side dishes and dinners-entrees. The category average is 185%.
When it comes to features, pizza tops the category with a 207% lift, compared with the category average of about 150%.
The "best of all possible worlds," Garrick said, is a display-feature combination. "What you want to look for there is synergy," he explained. "We had a 220% effect with a display and we had a 207% effect with the feature. If you had a feature- display and all you got was a sum of those, or 427%, well, there's no synergy. In fact, you actually see a 656%, or almost a 700%, increase with a feature-display combination. So you're getting 50% more effect here just from the synergy of having the display-feature combination."