ATLANTA -- Most new prepackaged dinner solutions are frozen, according to a new Information Resources, Inc., study.
Of new "pacesetter" items introduced last year, 71% of those in the dinner category were frozen items, states the study, called New Products Pacesetters 97. IRI identifies pacesetters as items that achieve at least $7.5 million in sales during their first year of activity.
Excerpts from the study were discussed by Carl Henninger, vice president of retail client services at Chicago-based IRI, at the National Frozen Food Association's 6th annual frozen food conference held here. Henninger spoke during a session entitled "Frozen Food is a Meal Solution . . . How Do We Sell More?"
The best-selling prepackaged dinner items target "do-it-for-me convenience" in three areas: casual dinner on the run in your hands; complete dinner in a kit and heartier dinner with larger helpings, the report states.
All consumer-packaged goods in the dinner category showed an 11.7% growth in dollar sales over the last three years, for an average annual gain of just under 4%. Frozen dinners and entrees have recently experienced strong growth, he added.
While many supermarkets offer consumers exotic home-meal replacements, they also need to offer more simplistic ideas, Henninger noted. The success of DiGiorno pizza, which grossed over $120 million in its first year, is an example of an obvious dinner choice that consumers prefer.
Supermarkets could also leverage famous brand names to increase the impact and credibility of their takeout sections. Manufacturers would be highly supportive of a second location for their products, Henninger said. For example, retailers can create themed meal solutions that hold shelf-stable, refrigerated and frozen products.
Among other trends in the frozen food aisle: frozen food prices have risen steadily over the past five years, while prices on the same items have increased only slightly. The average non-promoted compounded price per unit in that period was 17.2%. Price increases in 1992-93 were 1.1%; in 1993-94, 3.7% in 1994-95, 3.1%; in 1995-96, 4.5%; and in 1996-97, 4.8%.
Most of these increases can be attributed to new products, which are priced above the department average. New dinner-related items have the highest ring, Henninger reported.
Changing demographics, such as increasing racial diversity and an aging population, will affect what people want to buy in the frozen food aisle, according to Henninger. For example, as baby boomers age, their households diminish. However, household size is growing for Generation X.
"Retailers and manufacturers must adjust their marketing efforts to address the attributes of the consumers they are attempting to reach," Henninger noted.
