Supermarket chains are trying out new products and selling tactics to beef up their sales of private-label frozens.
In interviews with SN, retail frozen food and private-label executives said they are using more demonstrations, keeping new-product introductions coming and playing private label bigger in their advertising. They are also trying hard to give private labels their due, in terms of space in the case.
The goal, they said, is to build on a business base that has shoppers already making private label their choice in about 20% of their frozen food purchases.
It's a base that barely held steady last year. Private label's unit share in frozens skipped to 20.8% from 20.9% in the course of 1993, according to Nielsen North America, Northbrook, Ill. Dollar volume for the year dropped three-tenths of a percent, to a 15% share of total frozens volume. Nielsen data for 1994 are not yet available.
For one thing, national brand price competition has been growing more heated in a number of important categories, such as vegetables and ice cream, the merchandisers said.
But in spite of a flat year overall in 1993, frozen foods still stands second only to dairy in terms of the share of private label in both units and dollars. What's more, some individual frozen food categories more recently have been recording hefty increases in private-label sales.
According to scanning statistics compiled by Information Resources Inc., Chicago, the private-label winners in dollar sales for the year ended July 17, 1994, included pastry/baked goods and pasta, both with dollar sales growth of 42.6%; and store-brand egg substitutes, which garnered 35% growth.
Other active categories included seafood, which saw an increase of nearly 25% in private-label sales, contrasting with a decrease of more than 3% for the total category. Dinners/entrees had a gain of more than 18% in private-label dollar volume, while the entire category gained 3.6%.
Retailers said product demos are a tactic they have been using, or will use more of, to get shoppers to try private-label items.
"We find that demos are excellent for introducing our private-label products to consumers, especially when price comparisons to branded products are used in the demos," said Ben Bruehl, director of private brands at Homeland Stores, Oklahoma City. "The response from most consumers is that they did not realize the savings they could receive by purchasing private-label products."
Sales and promotions, Bruehl added, are crucial to private label's success. "We feel to get that new customer to try private label, we must give them an incentive to make that first purchase. Each new private-label customer we get equates to a loyal customer in our store."
Danny Wells, frozen-food buyer at Minyard Food Stores, Coppell, Texas, said his chain also is relying on demos. That and sale prices can do a lot toward increasing volume, he said. When asked for his summary of effective ways to generate sales, he said, "Put them in the ad and give them a good price."
Minyard's private-label dollar volume is probably at or near the national average of 15%, he added.
Chuck Sotzing, private-label director at Buehler Foods, Jasper, Ind., said his chain has not used demos for private-label products in the past, but has some scheduled for 1995.
It's part of an aggressive effort by the company, he said, which has seen the chain add some private-label space on its shelves over the past couple of years.
"Private label seems to have a good foothold and be gaining overall, both in frozen and dry grocery. It seems to be steadily inching up," he said.
While most retailers mentioned the occasional use of price comparisons to national brands, Minyard's Wells outlined the importance of another type of comparison -- one made behind the scenes.
"We have cutting tests all the time -- private label against a national brand," he said. "Of course, we have that here at the office." He said the products are tested for taste and appearance, and the chain's private label "always does well."
All the retailers contacted said private-label space allocations for the entire department have remained steady or increased slightly, given fluctuations within individual categories.
"We try to allocate as much space to private-label items as a comparable branded product would receive," said Homeland's Bruehl. "We do try to position the item next to the market leader to allow the consumer to make a quick comparison.
"We currently carry approximately 80 items in frozen food private label, not counting ice cream and frozen yogurt. This number is growing, as we see new categories that are having a large percentage of growth in relation to the balance of frozen foods. Two categories currently that need developing are breakfast foods and bread dough."
He said Homeland does not offer a premium line of private-label products, but plans to introduce such a line in 1995.
The frozen food buyer at a Midwestern chain said his company has a similar philosophy to Homeland when it comes to space allocation for private-label products. That philosophy, he said, carries over to promotion.
"When you look at each category within frozens, we generally promote our private label with about the same frequency as when the leading brand in each category is put on sale," he said.
"We feel private-label products allow us to offer our customers lower-cost alternatives in products they regularly use," said another buyer, with a Mid-Atlantic chain. "But in some categories, private label has become more than an alternative. The items are mainstays in their categories."
Ice cream, orange juice and vegetables remain the foundation of private-label volume in frozens, retailers said.
"The best-selling products in the frozen food department is frozen orange juice," said Homeland's Bruehl. "We do see increases in the purchase of frozen vegetables. The short crop year has helped private-label vegetables because of less promotional activity from branded products."
Bruehl said private-label sales at Homeland are trending up in most categories both in and out of frozens, something he expects will continue. "We are committed to our private label and plan to continue promotional activity to capture that new customer."
"Juices and vegetables are probably the two biggest categories in terms of volume," said the buyer with the Mid-Atlantic retailer. "Private-label sales probably represent about 15% of our dollar volume in frozens, and that's holding steady."