BAGELS ARE ROLLING

BOB BAUER

Frozen bagel sections used to be one-horse towns, but that is changing. Indeed, some retailers are making more room in their sections for other products besides the category mainstay, Lender's original bagels.

Lender's is still by far the market leader nationally, and up until a short while ago the typical set was Lender's and maybe a private-label item or two. But new competition is creeping into the category, retailers said.

New items, including new brands and even Lender's Big 'N Crusty varieties, are resulting in increased space -- and sales -- for the category. Unit volume of frozen bagels was up 8.1% and dollar volume was up 14.3% for the 52-week period ended March 12, according to Nielsen Marketing Research, Northbrook, Ill.

Supermarket retailers said they attribute that growth to new-product introductions in frozen bagels. In addition, increased availability of bagels in supermarket bakeries and an influx of bagel shops also is helping lift sales in frozens, said some retail sources.

Frank Schmitt, a buyer at Albertson's Inland Empire Division in Spokane, Wash., said the chain sees growth potential for the category and is increasing its advertising of frozen bagels.

"We're trying to advertise bagels once every three weeks now," he said. "We've added space for the category; not a huge amount, but that whole breakfast deal is growing for us."

Schmitt noted that he's adding the Skolnick's line to the Lender's products he's been carrying. He said even Lender's introduction of a shelf-stable bagel line hasn't appeared to hurt the category.

"What I understand is in most of the markets, that's even increased frozen bagel sales. It's helped it out just bringing more to the category."

An official at a Mid-Atlantic chain said the increased competition among manufacturers has been the biggest help to the frozen bagel category.

"With Sara Lee, the Big 'N Crusty line, and lines like Ira's and Bagel Bites, the category has a lot more to offer than it did a few years back," he said.

"Lender's has always put out good products and been popular, but the increased competition seems to have helped their sales as well. People like variety. If a category has more choices, total category sales are bound to increase -- as long as the choices are not just the same products with different brand names on them."

Private label, he added, accounts for about 10% of the category dollar sales in his chain, slightly above the 8.3% national average. "They've always done well for us. Shoppers seem to like the value in them. They really move if we put them on a good special at three for $1 or something like that."

Other retailers agreed that frozen bagel sales, private label and branded, increase when the products are promoted or are on sale. Most reported they have not done demos on the items, but would like to in the future.

Dick Billstein, frozen food buyer at Dierbergs Markets, Chesterfield, Mo., said outside sources have spurred the category's growth.

"It's been a popular item for quite a while, but now it's growing. Part of it might be the greater exposure of bagels in general. At least in our area, with the arrival of the bagel shops, bagels have gotten more visibility," he said.

"New items into the category don't hurt," he added. Billstein has increased his bagel offerings by recently adding Lender's Big 'N Crusty line and Skolnick's.

The Mid-Atlantic retailer concurred. "I've noticed a lot more places to get bagels in the area where I live than ever before. It seems that's what's going on all over this region. You don't see as many bagel shops as pizza places, but there are a lot of them out there."

Supermarket in-store bakeries also are contributing to the category's exposure, said a buyer with the southern California division of a large chain.

"More and more stores are adding bakeries or increasing the presence of the bakeries in their stores. That may mean more people are having bagels more often; and some of those purchases may be frozen bagels."

Al Giardullo, frozen food buyer at Great American/Victory Markets, Utica, N.Y., said he's doubled his space for frozen bagels. He recently added Skolnick's and also carries Sara Lee, Lender's, a private label, Food Club and Great American.

"I think [it's] because people are more cholesterol-conscious, and that's helped," he said. "Bagels being low in cholesterol, better than bread -- that's really helping sales."

The southern California retailer agreed. "I think bagels are supposed to be better for you than bread, maybe with the exception of egg bagels. At any rate, bagels seem to be one of the 'in' things. People seem to like sandwiches on bagels or croissants in sandwich shops these days. I'm sure some of that's carrying over to supermarkets."

The buyer said he's nearly doubled the space he's allotting for bagels, offering shoppers about 10 linear feet.

Troy Brown, a buyer with United Supermarkets, Lubbock, Texas, said he's also adding to his space for frozen bagels. "We're going to give it a shot," he said.

"We carry Lenders and we just picked up one that hasn't got in distribution yet, so I don't know how it will do," he said.

Dick Perkins, vice president of produce operations, and buyer of frozen food and produce at Consumers Markets, Springfield, Mo., said he hasn't been able yet to add space for frozen bagels.

Perkins, who offers Lender's and a private label, said sales would have to continue to increase before he could add space. "The frozen food category is one of the tightest categories we have in the supermarket industry. Giving anything any additional space is very difficult," he said.

A buyer with a Florida chain agreed with Perkins.

"We're watching the category closely, but it's going to have to grow some more before we can give it more space," he said. "It seems to be up about 5% over last year, but it may take a little more. Until then, we'll continue to have just Lender's and our private label."

Lender's original line has a 55.8% share of the category's dollar volume, while its Big 'N Crusty line accounts for another 8.3% of the category.

"With us, we only handle one frozen bagel, and that's Lender's," said Lee Salo, frozen food buyer at Raley's, West Sacramento, Calif. "We have not put in any other brands because nobody else seems to do anything out of that frozen food case except Lender's."