COLD COMFORT 2007

JEFF WELLS

Retailers are putting calorie-laden frozen comfort foods on ice, and appealing instead to consumers' desire for healthier convenience meals.

And with good reason. A recent report by Mintel International, Chicago, found that 64% of consumers consider positive health attributes a factor when choosing frozen meals.

Still, good-for-you options haven't knocked their heartier counterparts out cold, retailers told SN.

“Ten years ago we had a 45/55 split of conventional entrees to nutritional entrees,” said Melonie Nastanski, frozen-food buyer for Big Y, Springfield, Mass. “Today the split is nearer to 40/60.”

Industry experts confirmed that consumers still crave robust frozen entrees, but retailers interested in building sales in the category cannot simply rely on mom's meatloaf and mashed potatoes. Smart retailing, they said, requires focusing on convenience, quality and taste.

“Just because it's a staple product doesn't mean that companies can just ignore it and leave it out there,” said John Stanton, food marketing professor at St. Joseph's University, Philadelphia. “There are two things that have not changed in 50 years — the need to make entrees tastier, and more convenient.”

The popularity of frozen meals throughout the years has been a result of an increasingly driven, on-the-go society. According to the Mintel study, since 1992 sales have increased nearly 50%, as Americans' annual work hours have increased by more than 25%.

Clearly, the convenience element of frozen options is appealing. But as new product introductions proliferate, brands with the upper hand are those whose meals require more preparation than simply popping entrees in and out of the microwave.

Nate Fisher, director of frozen foods for Ingles Markets, Asheville, N.C., said two of his most popular lines are Unilever's Bertolli Dinner for Two premium meals, which can be sauteed in less than 10 minutes, and Banquet's Crock-Pot Classics, which slow-heat throughout the day. Each of the Bertolli meals includes vegetables, pasta, sauce and either chicken, sausage or shrimp. Crock-Pot Classics are available in flavors like Stroganoff with Beef and Noodles and Beef with Pot Roast.

Data from Information Resources Inc., Chicago, shows sales of Crock-Pot Classics have increased 75% through all channels since their 2004 introduction. Similarly, Unilever's premium multiserve category, which includes Dinner for Two, has grown around 10% annually.

“The Bertolli meal takes seven to 10 minutes and feeds two people,” said Fisher. “Now, that's extremely convenient. You have to wait that long in a fast-food line.”

Convenience means much more than time efficiency in today's frozen-meal market. It also means offerings need to be more portable, reduce clean-up time and cater to specific lifestyle trends.

“When I talk to frozen-food representatives, I tell them it's not a matter of ‘How can you make my food easy,’ it's ‘How can you make it easier?’” said Harry Balzer, vice president of the NPD Group, Port Washington, N.Y. “Oftentimes, frozen-food managers look at their offerings and think, ‘Well, it's already easy.’ Well, that's not the question. The question is, can you make it easier, because we will always move toward easier options.”

PREMIUM TASTE

No matter how compatible a product is with hectic modern lifestyles, if it doesn't taste good, it won't sell.

Traditional meals have the upper hand in this regard, as they typically contain the calories people crave.

Bill Spear, category manager for frozen foods at Bashas', Chandler, Ariz., said he's seen significant growth in premium traditional dinners, such as those in the Marie Callender's and Claim Jumper lines. These, he explained, come at a higher price point than other traditional offerings, and contain more premium ingredients. The Marie Callender's meals come in varieties including Beef Tips in Mushroom Sauce and Chicken Fried Beef Steak and Gravy. Among the frozen entrees marketed by Claim Jumper are Salisbury Steak and Meatloaf.

“We're experiencing good growth in the premium traditional area,” Spear said. “The drop-off has been in the more value-oriented options, the old-fashioned TV dinner-type meals.”

Both Marie Callender's and Claim Jumper are restaurant chains, and many of their frozen meals are dishes served in the restaurants — a marketing strategy to which Spear also attributes their success. Industry sources note that connecting a meal with a popular restaurant chain gives it the appeal of freshness. This is a crucial point, especially since most people do not view frozen meals as fresh.

“What's it like in the restaurant? It's fun. It's a place where things are taken care of for you,” said David Morris, a retail analyst with Mintel. “You can kind of draw on that atmosphere and that premium product to offer an experience in the home.”

Although single-serving-size entrees dominate the market at close to 75%, an opportunity for growth lies within multiserve options. This holds especially true for traditional frozen meals, which appeal to families and groups looking to divide a hearty meal among themselves.

According to IRI, sales of multiserve meals grew by 16% between 2003 and 2005.

Multiserve meals lend themselves well to portion control and also, more than single-serve options, enable the ritual of sitting down as a family — something many consumers prize but are often unable to accomplish.

“Families are going to look for ways to eat together and not necessarily make the meals,” said Stanton.

Frozen meal sales have remained mostly flat over the past couple years, with the supermarket channel accounting for 84% of total dollar sales.

Industry sources attribute the lack of growth to channel blurring. Fast casual and restaurant takeout options are on the rise. Drug stores are also starting to sell more frozen meals. They've increased their sales in the category by 89% between 2003 and 2005, according to IRI.

There has also been an increase in deli innovations. Twenty-three percent of consumers say they will purchase takeout meals from the deli, according to a report by the International Dairy Deli Bakery Association. This is in addition to the increasing popularity of shelf-stable items, and even the recent 21% increase in frozen snack sales, according to Morris.

“The competitive landscape is hotter than ever,” said Keith Shannon, frozen-food category manager for Schnuck Markets, St. Louis.

Taking all this into account, staying competitive with traditional meals — innovating them out of mom's kitchen and into the modern age — is more important than ever for supermarkets.

“We have to distinguish between what is growing and what is big,” said Stanton. “What this really means is that supermarkets can't back away from this section.”

Retro Fit

Staying modern can go a long way for manufacturers of traditional frozen meals. But sometimes nothing beats a classic. Such is the case with Swanson, which last month unveiled a new line of frozen meals that reaches back 50 years, to when the company decided to expand beyond its restaurant chain and into grocery freezers. Labeled Swanson Classics, the meals come in blue-and-red packaging that has retro appeal, and feature some of the signature dishes that defined “TV Dinner”: Salisbury steak, meatloaf and mashed potatoes, carved turkey and stuffing.

“Swanson has a loyal following among the Baby Boomer generation that grew up with the brand,” said company spokesman Pat McAndrew. “This audience remembers Swanson as ‘The Original TV Dinner’ and has enjoyed the brand since the 1950s.”

According to analysts, targeting a specific audience like Baby Boomers can be a savvy marketing move. Still, it's important to stay contemporary and convenient. In other words, it's OK to travel back in time; just make sure you know how to get back.

“You used to be able to advertise meatloaf like your mother used to make,” said John Stanton, food marketing professor at St. Joseph's University, Philadelphia. “But with the younger generations now, their mothers never made meatloaf.”
— J.W.