Desired by diet-conscious career women and aging baby boomers alike, and anyone trying to reduce cholesterol intake, low-fat frozen entrees provide the same profit structure and similar promotional schedules as indulgent brands.
Flavor counts, retailers said about the segment.
"Lean Cuisine is showing pretty steady growth, but Healthy Choice is lagging just a little bit in the last quarter," said Russ Hahn, frozen food buyer for Scolari's Food & Drug, Sparks, Nev. He said that Healthy Choice, owned by ConAgra, Omaha, Neb., is starting to get a little bit more aggressive.
"Two or three years ago, they were very aggressive in promoting," Hahn said, explaining that since ConAgra also owns the Banquet and Marie Callenders' brands, the focus shifts depending on where the promotional money is allocated.
"Sales are steady. We try to spike new interest in new products, but it's hard with the limited space in the frozen section," Hahn said.
To call attention to the entrees, Scolari's stands the boxes up in the freezer case. "We have experimented back and forth, with the end flaps vs. the picture on the front," Hahn said. "The picture usually grabs the people's attention first. Most shoppers don't have time to read the labels."
Weight Watcher SmartOnes have been steadily bounding back, Hahn said, adding that the brand has been strong in certain regional areas. "In our area, they seemed to be lacking, but now they're back." The rebound might be due to new product introductions, he offered.
A Midwestern buyer who didn't want to be named said the most successful brands -- those who have been able to preserve their sales -- are those that offer the most flavor. Stouffer's Lean Cuisine is one that he said "doesn't hang its hat on the low-fat or the low-calorie nature of it." At the same time that Healthy Choice is dropping [sales were down 3.2% for the 52 weeks ended July 15, according to Information Resources Inc., Chicago, while units were down 5.9%], Sara Lee full-fat cheesecake desserts are spectacularly successful. Of course, this is a different segment of frozen food, but useful to illustrate consumers' desire for indulgence.
The latest taglines for Stouffer's are "Do something good for yourself" and "Easy to Eat Healthy," which places the emphasis on enjoyment, reward and satisfying meals, rather than the message of "we're going to keep your waistline slim," he pointed out.
Along the same lines, he noted that the sub-brand name to "Smart Ones" was a better way to go than emphasizing Weight Watchers, which makes people feel stigmatized. "We are seeing a backlash, not much in the way of progress for low-fat entrees. We are seeing the full flavor, full fat, full sodium of Boston Market and Marie Callender's doing better," said the industry observer.
People with a cholesterol problem sort through the offerings, and when they finally find one that they like, they are really loyal, he added. The sizeable baby boom generation, with its older members now in their mid-50s, is a harbinger of how many people are going to get the cholesterol message in the next few years, he said.
Pat Brooks, frozen category manager for Save Mart, Modesto, Calif., says, "We have not had the success with low-fat entrees that we anticipated. We do use our regular advertising and reduced-price vehicles to help create sales and customer awareness. "The profit structure for low-fat entrees is the same as for other entrees."
Joe Ennen, general manager for Healthy Choice, told SN: "We are selling more of our volume 'not on consumer promotion' than last year. Well in excess of half the volume is sold at full price and increasing." The suggested retail price varies by item, but for dinners, he said the retail price ranges in the U.S. from a low at Wal-Mart of $2.50 to some of the high-end East Coast markets of $3.79. A national average is $2.99 to $3.10, he said.
There are two broad categories: dinners and entrees. Dinners have a divided tray, for separate vegetable, starch and protein. Entrees tend to be one-dish meals, or protein and a starch or a vegetable and a protein, more of the classic smaller item.
"From a shelving standpoint, there are a couple broad things we like to see," Ennen said. "Healthy Choice is merchandised together in what we call The Sea of Green. Some retailers have dinners and entrees in separate sections. We have done studies and find that putting the Healthy Choice altogether sells the most for the retailer." The entrees are segmented as Solos, Duos and Medleys, as well as bowl meals.
Solos are one-dish, casserole-type meals at a low price, with the package showing a red plate and a red banner. Some retailers line them up by color. Duos have a protein and a starch, like chicken and mashed potatoes, with a blue plate and blue banner on the package. Medleys, more the traditional TV-dinner approach with compartments for different parts of the meal, use a purple plate and banner. These three types of meals were introduced last fall. Healthy Choice bowls were launched in July 1998. "We were actually the first ones to market with bowls. Before Uncle Ben's," Ennen said.
SN, visiting a Shaw's supermarket in Manchester, Vt., recently, saw five shelves of Healthy Choice, with Solos at the top, at $2.39 and $2.99; Medleys in the middle, at $2.99, with Duos below at the same price. Bowls of cheese tortellini, cheese and chicken tortellini, and Country Chicken Bake followed.
Promotionally, Healthy Choice runs a big program in January, which Ennen refers to as "resolution month," as in New Year's resolutions to lose weight. "We have tons of consumer activity, and quite a lot of retailer activity, in an attempt to pull those pieces together. In last year's program we gave away a million airline miles, and retailers gave away 25,000 miles to frequent shoppers," he said.
For January 2002, the brand will most likely continue the Feel Like A Million promotion.
The on-pack promotion will ask consumers to write and send a photo explaining how Healthy Choice helps them "feel like a million," with a cash prize or airline miles, and offering each entrant a one-month subscription to six different health-related magazines, such as Self, Shape, Runners World and Prevention.
Regarding sales data, Ennen said, "Our volume was showing a pretty strong double-digit increase [in the] 12-week period through Aug. 19, from IRI as well.
"Our entrees business right now is the fastest-growing in the calorie-controlled health segment," Ennen said.
He also noted that for any product to call itself "healthy" in advertising, it must conform to a strict government regulation. Each Healthy Choice product -- not only frozen, but across the board -- must have no more than 600 mg sodium, no more than 3% fat and not more than 1% saturated fat. There is also a cholesterol restriction, and it must have positive nutrients -- such as fiber, vitamins and minerals, under FDA and USDA standards, he said.
"We don't see our competition as just Lean Cuisine and Weight Watchers. It's every product in the store, including fresh," said Ennen.
Low-fat entrees started the resurgence of frozen entrees, said Bernie Rogan, spokesman for Shaw's Supermarkets, West Bridgewater, Mass. "That sector was successful and encouraged companies to extend the number of stockkeeping units in the frozen entree category.
"You see that very clearly on a walk down the seafood aisle. It clearly is a pattern that is encouraged. It's all considered by the customer as ready to eat, almost like fresh. They pop it in the microwave, and that's what everybody looks for these days," Rogan said.
Linwood Wilson, category manager, SuperValu, New England region, Andover, Mass., agreed that low-fat frozen entrees are probably advertised as often as the regular items.
"They have to taste good for people to stick with them," he observed. "And they have to be reasonably priced."
In private label, frozen dinners and entrees' dollar sales have increased by 27% in that year, according to IRI, although no distinction was made between low-fat and regular.
Ted Kontopoulos, product manager of the Rice Bowl entrees for Topco Associates, the retailers' cooperative based in Skokie, Ill., that furnishes private-label products to supermarket chains, said that the new Food Club entry has been out for a couple of months, but a low-fat frozen rice bowl for the Meijer chain is under development, and a Giant Eagle label will be introduced shortly.
Topco's first-generation Rice Bowls come in six varieties and are 12 ounces, 98% fat-free and ready to serve in seven minutes.
"We try to tie in product attributes, knowing that your packaging is your billboard," Kontopoulos said. The label bears a clock face with seven minutes, and the "Mealtime in Minutes" banner, which Topco also puts on pot pies and anything that can be microwaved.
Noodle dishes will be introduced next, and a mac-and-cheese for kids, as well as something non-Oriental, Kontopoulos said. Bowl meals lend themselves to different ethnic dishes.
"Americans are still interested in low-fat. Taste is important -- it's still No. 1, the most important. People are not willing to give up a lot of the taste profile to achieve the health status. Obviously, you're trying to balance both," said Kontopoulos. More people are interested in low fat than in low sodium, he said, so for that reason, sodium was not reduced at all.
Topco's rice bowls will be competitively priced. They will deliver value and greater penny profit, and higher grosses than the national brands, Kontopoulos said.
