Vegetable blends and stir-fry mixes are bright spots in the frozen vegetables category. They're also the domain of national brands, but that may be changing.
Retailers are growing increasingly interested in the higher rings offered by blends and stir-fry-type products, and many have already introduced store-brand blended vegetable products, or plan to do so soon. While vegetable packers contacted by SN said it's still a little too early to gauge the impact of the California floods on the category's prices, they don't think the floods create enough of a shortage or price hike to keep new private-label blends from entering the market.
"The vegetable category is expanding into these stir-fries," said Dave Roth, frozen food buyer at Holiday Cos., a wholesaler based in Bloomington, Minn. "That's where a lot of the growth
-- which was originally Birds Eye Farm Fresh -- is coming from. Birds Eye was the original one, and then there's been a lot of expansion with the Pasta Accents and that type of thing. That's where the growth is, definitely."
"The new Green Giant Create A Meals, where all you add is chicken or pork or beef, are doing extremely well," said Pete Marino, frozen food buyer at Genuardi Super Markets, Norristown, Pa.
Now, chains and wholesalers are looking closely down the path carved out by the big brands, and see private label as their best opportunity to capture some of that growth, Roth said.
Holiday is among those taking a look. "I would say that private label has not caught up with the [Green Giant] Create A Meals and the stir-fries. We just put in private-label stir-fry here a couple of months ago," Roth told SN. "I would say that private label is maybe a little bit behind. The innovation is coming from the branded products there."
The Create A Meals line has caught a lot of retailers' attention, Roth added. "They're doing fabulous. That's probably one of the best new-item introductions in vegetables we've had by far. For a new item, that really took off quick."
Like Roth, Pat Redmond, grocery merchandiser at Rosauers Supermarkets, Spokane, Wash., sees blends as an opportunity for private-label growth.
"I think private label is moving in that direction. I know we're looking at some things," he reported. "That's the only reason why private label really hasn't taken [the blends segment] over: because it doesn't have any of that type of merchandise yet."
While Redmond predicted private-label companies would introduce more blended products soon, he added that won't become as big a segment of the business as plain vegetables.
"There's a limited sales potential on blends," he said. "With the basics, you can pretty well predict success as long as your price is right; but with the other, it's not quite that easy."
Still, manufacturers continue to emphasize the blends, which will help that end of the business grow. "I don't see them pushing the basics," Redmond said.
A buyer with a Southern division of a major chain said Redmond's assessment is right on the money.
"The manufacturers are paying more attention to blends because they're trying to create some excitement in the category. On the private-label side, it seems everyone took a wait-and-see approach so far. Now that people are convinced there is a market for blends, they're looking to get in on the action," the buyer said.
"We've had two blends in our private label for about six months now, and they're doing pretty well. I think many of the people who buy private-label plain vegetables are willing to try private-label blends; and when they do, they like them. Those who buy only Birds Eye or Green Giant plain vegetables aren't likely to go near the private-label blends, either."
Pat Brooks, director of frozen food, dairy, deli and liquor at Save Mart Supermarkets, Modesto, Calif., said money was a major reason for building blends business on the branded side.
"Over the years, the major manufacturers have seen that it's been a dogfight on the blanched vegetables, to the point where it's been so competitive they've had to lower their margins just to buy ads and sell tonnage, and it left very little room for profit," he said.
"I think they see the blend area as a place where you can get a value-added product and not have to give it away, like you must with the other blanched vegetables."
Brooks added that margins help on the store-brand side, too -- and consequently, Save Mart regularly advertises its private-label vegetable blends.
"The good thing about the blends is you don't have to give them away. Your profit margin on the ad is better than it is on the blanched, and so therefore we want to sell those. First off, it's a higher dollar ring. Secondly, there's a little more profitability," he explained.
Harry Bernardino, frozen food buyer for Foodland Super Market, Honolulu, predicts great things for private-label blends.
"Private label is the No. 1 selling segment of the frozen polybag vegetables, if you were to classify by your basic flavors, peas, mixed vegetables, etc.," he said. "They're a little weak on your blended category, but that I think is due to the fact that the major manufacturers have given those segments a little bit more attention than controlled label at this point.
"I would have to say, based on the numbers I've seen from Birds Eye and the Pixie label, there is great opportunity for private label, with the cost differential, to become No. 1 in that segment. It's just a matter of getting it more exposure."
A sales snapshot provided to SN by a major chain demonstrates private label's hold on plain vegetable products, as well as its increasing share of the blends segment.
The chain's scanning data for the 15-week period ended Jan. 11 showed that of the 176 frozen vegetable and potato stockkeeping units carried, the top 12 items were private-label items, as were 18 of the top 20. The store-brand items accounted for 57.17% of all frozen vegetable and potato sales.
Of that top 20, two were private-label blended vegetables. The top-selling national brand blended item was a Birds Eye broccoli, carrot and cauliflower product at No. 44.
The top-selling vegetable during that span was a 10-ounce box of private-label spinach.
"November and December are times for parties and people were using it [spinach] to put in their dips," said the chain's frozen food buyer. "It's a good seller all the time, but especially during that time. Our stores are wise to that and they're merchandising that item really well."
Most retailers said private label accounts for slightly more than 50% of plain frozen vegetable sales. While some predict great things for private-label blends, others say store brands are likely to control a much smaller share of that segment.
"We do the best job with just the plain vegetables," said Mark Polsky, senior vice president of Magruder Inc., Rockville, Md. "It's easier to get quality and it handles our trade. We've got a very ethnic trade. Ethnic people cook with vegetables. They don't just use them as a side dish. They put them in soups and stews or whatever they're making. So they don't want a blend. They just want an item."
Marino of Genuardi said he thinks cost will be a factor in minimizing private label's role in blends of frozen vegetables.
"I think [retailers] will stick more with the basics. It's pretty costly to get into private label. We don't have a private label. We have a controlled label and those blends do very well."
