Upscale pies are paving the way for continued growth in the frozen pizza category. It's partly the same phenomenon that is pushing sales of frozen desserts: superpremium items have taught consumers to expect higher quality in the supermarket case.
In frozen pizza, quality levels had been a sore spot in the past, but things are changing, and the entire category is benefiting, retailers said.
"My sales are just phenomenal. Day in and day out, that category is one of the best-selling categories in the aisle," said Gene Sninski, frozen food buyer at Mayfair Super Markets, Elizabeth, N.J.
Sninski's reaction is especially enthusiastic, but the consensus among supermarket buyers and merchandisers -- and more and more consumers, too -- is that at the high end the quality of frozen products is getting good enough to give many pizzeria pizzas a run for their money.
The trend is strong enough to have prompted supermarkets to increase their facings of the frozen pizza section, in some cases by 100%.
That expansion seems to be warranted, because consumers are responding to the quality issue with their wallets. Dollar volume in frozen pizza for the 52 weeks ended June 19, 1994, was $1.5 billion, up 10.2% over the prior year, according to scanning data compiled by Information Resources Inc., Chicago. Unit volume for the same period was 714.2 million, up 10.5%.
Retailers also welcome the higher rings that go along with these premium products, and say consumers are willing to pay those higher prices because they're still much lower than pizzeria costs.
The "pizza with the works" offerings driving the category's expansion were not commonly seen in frozen food departments until a couple of years ago, merchandisers told SN.
John Shoemaker, frozen food and dairy buyer for the Louisville, Ky., division of Winn-Dixie Stores, Jacksonville, Fla., anticipated the growth of the pizza category and expanded his sections two and a half years ago.
"The higher priced pizzas is where the growth is," he said. "I just think the consumer is trying to upgrade and get a better tasting pizza. I think the manufacturers have done a better job of putting out a good, quality product, too. Pizzas used to be just for kids. Now they're for the whole family."
Pizza sales in California have surged over the last couple of years, said Pat Brooks, director of frozen, dairy, deli and liquor at Save Mart Supermarkets, Modesto, Calif. He contends that more growth is on the way.
"Pizza has not indexed as well in California as it has in other markets. With the introduction of Tombstone Pizza about two years ago, we're seeing the need to expand the frozen supermarket pizza section by going toward more of the premium-type pizzas. We see that as an area in the supermarket in California that has a lot of potential for future growth," Brooks said.
Scott Rzesa, director of dairy and frozen food at D'Agostino Supermarkets, Larchmont, N.Y., said upscale pizzas have done well for a couple of years.
"About three years ago we brought in Wolfgang Puck Pizza, which is probably the highest ticket item anywhere. That's done well from the beginning," he said. Since then, the chain has taken on a major manufacturer with product in what Rzesa called "the mid-upper end."
Rzesa and the other buyers agreed that the higher-end pizzas are adding sales to the category -- not taking them away from the lower-priced items.
Mayfair's Sninski said sales of personal-size pizzas have skyrocketed. "Tony's Pizza just changed its microwave pizza to a personal size. We took in Tony's about two years ago and we're just doing phenomenal with them, and the whole Tony's Red Baron label."
Sninski said Mayfair has expanded the category to five doors. "That's a pretty big set, because we were at three doors maybe like a year ago. I'm hoping to go to six doors this fall." That expansion would enable to chain to accommodate still more product introductions, he added.
"We're looking to bring in other thin-crust lines," Sninski said. "We took in a thin crust [initially] because of all the advertising you see from Domino's and different places. We took in Tony's thin crust and it's been tremendous. We haven't even advertised it. We have a fresh ad coming up on it, but it's just doing great."
Xavier Smith, frozen food buyer at Food Giant, Bessemer, Ala., said he's doubled his space for pizza from two to four doors.
"Sometimes you sell a lot of the cheaper ones and the private label, but the main brands are selling pretty well here now," he said. The upscale brands -- Red Baron, Tombstone and Pappalo's -- are leading the way, he added. "They're big pizzas and they're good. If you've got a big family, you want the best."
Manufacturers are seeing the same consumer trends, and have changed the face of the category, with positive results. A top executive at a leading frozen pizza manufacturer told SN he estimates growth of premium pizzas to be between 15% and 20%.
"It's growing like crazy," he said, referring to the upscale segment. "That's pretty much where all the growth is coming from in the pizza market."
The executive estimated nearly 30% of the category's sales come from superpremium products. The reason is consumers like the value of these high-quality products, he said.
"A takeout-home delivery pizza costs anywhere from $9 to $12. If you can get a pizza of comparable quality and just have it in your freezer for $3 or $4, it's a pretty good
deal. We really think the improvements in the quality of frozen pizza, plus a pretty good price-value relationship, are really driving the category," the vendor said.
He cited more evidence from two identical studies done by his company. Ten years ago, when people were asked what their favorite lunch item was, pizza was No. 10. About a year ago, pizza was No. 1, the company found. "Think about the changes in consumers' attitudes," he said. "Pizza is almost becoming the fifth food group."
Anne-Marie Davee, a spokeswoman for Hannaford Bros., Scarborough, Maine, echoed the supplier's observations about consumers looking for a new level of value, but added that the cost is still a factor in the equation for pizza.
"Customers are price-sensitive," she said. "They're seeking the best value." She said Hannaford carries Mr. P's, Celeste, Gino's, McCain's Elio, Tony's Red Baron, Tombstone and a private label.
A spokeswoman for Dominick's Finer Foods, Northlake, Ill., said new competition is driving sales. However, at Dominick's the lower-priced items do well along with fancier pizzas.
"The basics seem to be remaining strong. They're reliable items," the spokeswoman said. "Private label is a big player with us," she added.
Pizzas, which sell best at Dominick's around New Year's and the Super Bowl, take up about 10% to 15% of total frozens space in the company's stores, she said.
Chicago, of course, is a town where pizza is an art. There, and in several other major metropolitan areas, the battle against pizzeria pizzas is particularly tough because that trade class is so well-entrenched.
Detroit is another such market, according Warren Zweigel, frozen food buyer at A&P's Michigan division. He is one buyer who hasn't seen much growth in frozen pizza sales.
"It's a decent category, but nothing major is happening in it," Zweigel said. "Don't forget, on every corner in Detroit we've got a pizzeria."
Still, he said, his consumers respond well to coupons on pizza, supporting the need to keep low price pizza options prominent in the case. "Americans will always respond to something that's either free or if they're saving some money."
Rzesa of D'Agostino said pizzerias still pose a problem to supermarkets in New York City, in spite of the value offered by the superpremium products.
"We're in a perpetual battle with local shops, especially in Manhattan, where there's probably three pizza guys on every square block. So that's our dilemma. We're trading sales with them," said Rzesa.
In addition to fierce competition from pizzerias, space can be more of a problem for urban-area stores like D'Agostino.
"We don't carry the number of SKUs of pizza that you would find typically in a suburban store," Rzesa said. "I would say if we have 20 to 25 SKUs of pizza, that's a lot. And that many SKUs would not even be placed in every store I have because my freezers vary quite a bit in size," he said.
In most other markets,
however, shoppers seem to have adjusted well to the higher prices they have to pay for premium pizzas, compared with the lesser-priced brands.
"They consider the 12-inch, family-size pies comparable to a pizzeria-type pizza," said Sninski of Mayfair. "So they'll pay $4 for a large-size pie, because they're going to pay $6 or $7 for a large pie at a pizzeria. If the quality is there, they'll pay the extra price.
"Certain stores are not going to sell the upgraded items. Let's not kid ourselves. You have certain stores in certain areas where the demographics just don't fit."
Mayfair's Sninski was among several of the buyers who mentioned pizzas making good demo items for the frozens department. He added that he's looking forward to doing more demos.
"Tony's was real aggressive out there, and did demos on the pies with the bigger toppings," Sninski said. "We got off the pizza demos in the summer because of the hot weather. We'll start in the fall. We have our own demo house in here, and we demo pretty regularly -- not only Tony's, but Stouffer's and different Celeste items. We're always trying to demo the upgraded items to get somebody to pick it up."