IRVINE, Calif. -- Five Silver Penguins presented here at the Wolfgang Puck Cafe to brokers, retail buyers and the Southern California Frozen Food Council are a testament to the power of teamwork in driving frozen-food sales.
The frozen-food community works hard in this market, battling demographics that are not especially favorable to frozen -food sales.
Accounting for 7.8% of the U.S. population, southern California does only 5.87% of the nation's frozen-food sales, according to brokers at Crossmark Sales & Marketing, Santa Fe Springs, Calif.
"People's eating habits are different here [than in other parts of the country]," noted Joe Crafton, president of the southern California division of the brokerage.
Purveyers of frozen food in California have to compete with abundant and low-priced fresh fruits and vegetables that are also grown for much of the United States. Prices for produce are lower here, since it doesn't have to travel far. Moreover, the large Hispanic population found in California is partial to produce.
Nonetheless, the southern California market, extending from Bakersfield to the Mexican border and east to Las Vegas, is a large one, with $30 billion in annual supermarket sales, said Sam Griffith, president of the SCFFC and vice president and corporate business manager for Kelley-Clarke, Diamond Bar, Calif. SN spoke with brokers in the latter part of the month, after the awards ceremony was held here. Griffith presented the awards Nov. 12.
Silver Penguins, bestowed by the National Frozen Food Association, Harrisburg, Pa., were picked up at the awards dinner by Crossmark Sales & Marketing; Kelley-Clarke; Ralphs Grocery Co., Compton; Albertson's southern California division, Brea; and the SCFFC, Newport Beach.
"This market is dynamic, [both] the manufacturers who support it with dollars and the brokers and buyers who get behind it, are responsible," said Griffith of the SCFFC.
As the supermarket industry has consolidated, so have brokers. One result is that brokers have become a powerful force in area marketing. "They used to be just a sales force; now they are a micromarketing force," said Terry Viney, Eastern regional manager for Cargill salt products, Minneapolis. They broker agreements between the manufacturer and the retailer, help the retailer with category management and planograms, and, most important, devise creative ways of selling products.
"In all the categories, frozen is far and away the greatest for broker participation," said Bob Schwarze, president of the Association of Sales and Marketing Cos., Reston, Va. In the total store, he said, 55% of goods come through a broker, but when it comes to frozens, brokers probably represent 85% to 90% of all the volume, Schwarze told SN.
To win the Silver Penguin in the category of chains with 50 or more units, Albertson's and Ralphs designed and built creative displays, presented food demonstrations and offered special promotional sales.
Paul Edwards, grocery sales manager for the southern California division of Albertson's, emphasized that teamwork was responsible for the win, and he credited Henry Wong, grocery coordinator; Merri Phelps, grocery pricer; Coe Hawkins, grocery procurement manager; Bryan Davis, private-label sales manager; and Pam Robertson, demo coordinator.
Crossmark, formerly named Sales Mark, won silver Penguins in 1991, 1992, 1995 and 1997 as well as this year. Jerry Cochran, vice president of frozen-food sales for Kelley-Clarke and his team win a gold or silver just about every year, according to Frank Carfioli, vice president for the brokerage.
In addition to this year's award, the SCFFC, with more than 75 members, won Golden Penguins in the large association category in 1994, 1995 and 1996. The council was not eligible for an award last year under NFFA rules, since it had picked up three consecutive Penguins.
Much of the excitement in frozen-food promotions this year was derived from the consolidated pallet modules that resulted in increased sales of Minute Maid orange juice, Ore-Ida potatoes and Eggo Waffles, handled by brokers Crossmark, Kelley-Clarke and Marketing Specialists Inc., of Orange, respectively.
CPM is the term used for bundling high-profile brands that complement one another on a pallet module so that, when merchandised together, they answer the consumer's needs and present a meal-solution idea.
As reported in SN earlier this year, CPMs using Minute Maid From Concentrate Orange Juice, Eggo Waffles and Ore-Ida Breakfast Potatoes -- three "Cadillac" brands -- lined up a breakfast solution for the consumer. Pallets were built at a third-party consolidator, AmeriCold Logistics, Ontario, Calif., which has 104 distribution centers nationally.
The CPMs were not part of March promotions. They debuted Feb. 4 at 150 targeted Ralphs stores. The promotion, with all three brands layered on prebuilt pallets, ran again in April at both Ralphs and its Food 4 Less units. It has since run again, starting July 29 and Oct. 28, for two-week periods.
"Sales were five times greater than normal, and five more similar promotions are planned for 1999," said Rick Walker, vice president of frozen-food sales for Crossmark. He is now working on follow-up ideas, using Pillsbury's Hungry Jack Waffles and Pillsbury's Toaster Strudel.
While the council itself did not have the resources to implement CPMs, it created a task force on the subject. Debra Van Der Weide, executive director of the council, and Donna Ramey, an account executive with Marketing Specialists Inc., put on a workshop at the 1997 NFFA convention in Las Vegas that discussed ideas later implemented by the other brokers. Walker predicts that CPMs will become the way sales are made in the future.
"This way it's a one-stop shop," agreed Griffith of the SCFFC. For instance, a consumer seeing an entree, or even two, merchandised along with a vegetable, a garlic bread and a frozen juice now has an idea for the evening meal. Moreover, he said, "If, as the broker, you represent all those products, you're now selling five instead of one."
Carfioli of Kelley-Clarke said that "One of the responsibilities of the broker to the retailer is to be creative in the programming. There has been a big influx of mixed pallet programs for displays. We started with Gorton's of Gloucester and Ore-Ida, the frozen potatoes, about a year and a half ago."
Jerry Cochran, vice president of frozen food sales, of Kelley-Clarke noted that food ads organized around a theme are much more effective than a scattershot approach.
"When we get a customer into our category, if we can sell them five items, instead of selling one, if we can satisfy a meal solution for them, we have done them a service," Cochran told SN. "We say, 'Let's sell it as a concept.' It can be as small as listing items, or as big as putting together an ad to run on Best Food Day, or a custom module that would include all those products.
"We build a module, to make it simple for the buyer. We give them the meal-solution concept to run in the ad, add a coupon, send the module out to the store, and they've got everything they need," Cochran continued.
Then a broker sends its people to the store, bringing point-of-sale material, gives the program a name and builds the display.
Bob Cashen, director of grocery merchandising at Ralphs, has been very proactive, Cochran said. But the issue all brokers run into is getting enough product into the store. CPMs help.
Carfioli agreed there are creative minds at work on the retail side as well. "But to give consumers meal ideas and menu tie-ins is up to us. We represent the manufacturers, and are supposed to get the support and the programming from them." Support can come in the form of dollars, consumer advertising, coupons, freestanding inserts or demos.
Brokers are likely to have regular brainstorming sessions, at which account executives talk about their brands -- where they are and where they need to go. After that, the broker calls on the account and tells the client about the idea. Schwarze of the ASMC noted that many ideas originate in California and travel east.
"The cool thing about the customer from Denver west is that any and all frozens buyers are willing to try just about anything. If it works, it will expand out from there. And if it doesn't, 'at least we tried it,' they figure," said Griffith of the SCFFC.
Brokers help retailers with category management and planograms, using sophisticated computer programs to manipulate sales data. Schwarze said major brokers are investing an average of $500,000 a year in computer software and hardware.
In the United States, there are only a few national brokers, several regional brokers and local brokers. But brokers, like supermarkets, are following the consolidation trend, which has led to centralized procurement in a few categories.
Manufacturers are asking retailers for one point of contact now, said Crafton of Crossmark. Crafton's division is part of Crossmark, Plano, Texas. Crossmark used to do business under different names in different geographic regions, but since September opted for a universal name. The southern California division has about 250 employees and does about $600 million in sales.
Crafton confirmed Schwarze's observation about technology, saying that a successful broker nowadays has to be able to play "the technology game. "To be cutting-edge, you have to have a multimillion dollar technology budget," Crafton said. "We are in the service business, so we have to listen to our manufacturers and retailers. When they tell us that we need to follow their business across multiple markets and trade classes, then we do our best to service their needs," he continued.
To do that, Crossmark uses a proprietary software program to communicate fresh data to every member of the company. It includes schematics with information on Universal Product Codes, sizes and so forth. The system, called SalesTrak, can also transmit images of coupons and sell sheets to the representatives. E-mail is well used within the brokerage, which has used SalesTrak for three years nationally. Another proprietary system, called CategoryTrak, developed by Crossmark, is used to develop base-incremental charts, gap analysis and item optimization reports.
The division here works with Ralphs; Food 4 Less; Vons Grocery Co.; Lucky's South; Albertson's Southern California; Stater Bros.; Smart & Final; Certified Grocers, a wholesaler; and the retailers supplied by Certified.
Crossmark also has formed national teams for several national retailers, such as Albertson's, American Stores, Kroger Co., Safeway, Wal-Mart Supercenters and Winn-Dixie Stores. "These teams are based near the retailer's headquarters so that we can stay close to the customer and provide better lines of communication," Crafton said.
Because new items are introduced so frequently, the broker and/or retailer must constantly evaluate which ones are producing.
With a national contract with Spectra/Market Metrics and Information Resources Inc., both in Chicago, Crossmark can cluster stores for each retailer. "By grouping stores with the same shopping behavior and geodemographic profile, we can make recommendations to retailers that are unique to each cluster," Crafton said.
"Going even further is one-to-one marketing. This market was the first to use shopper-loyalty cards. They have been developing databases for years. This opens up a whole area of database marketing. The one-to-one marketing possibilities are endless," Crafton said.