COLD CASH 1995

RUSSELL REDMAN

Buyers and merchandisers are keeping frozen pies, cakes, pastries and other baked sweets before consumers, despite the category's uneven sales.

Nowadays, in-store bakeries are getting the lion's share of new products, merchandising and advertising. But astute use of advertised price reductions, buy-one-get-ones and multiple pricing, plus endcap displays and product tie-ins -- mostly during the core fall and winter holiday season -- has pulled shoppers to the frozens case.

John C. Groub Co., a Seymour, Ind.-based chain, advertises the category year-round, despite getting an inconsistent response between holidays, said Larry Miller, grocery buyer and merchandiser.

"I try to do an ad every now and then, just to keep it in the people's minds," he said. Frozen baked sweets "usually don't get any big display area in the off-seasons. But we will go ahead and do some advertising on it, just to try to generate some extra sales.

"There's some activity all year long, but you get spikes during the holidays," Miller noted. Cross-merchandising has been an aid, he said. "Sometimes we'll try to tie something in, with toppings like Cool Whip, ice creams, etc."

Spartan Stores, a Grand Rapids, Mich.-based wholesaler, also exploits the fall-winter season, according to Joel Westrate, frozen food buyer and merchandiser. "When we go into the holidays, whether it's Mrs. Smith's or Sara Lee, they'll get into a big ad and a mixed, palletized module," he said.

"Last year we moved a lot of Mrs. Smith's; we had a 72-case module that had nearly every variety in at 12 cases each. By selling it that way, you tend to more or less force [retailers] to display the product and move it out to the shelf because the cost savings is so great that it's hard to turn down. We also do the mixed, palletized modules with the Pepperidge Farm layer cakes."

Frozen baked sweets are impulse-driven, and retailers with enough display space should showcase package graphics, which have improved immeasurably for frozens overall, Westrate added. "We try as much as possible to have our promotions come out of the coffin endcap, but that's not always feasible."

The frozen food director at a Mid-Atlantic chain said that although baked sweets are not a big factor in his department, he maintains a healthy selection of products.

"Outside the holidays, we don't do a lot with the pies and cakes other than in our own bakery," he explained. "But we certainly make available to our customers a good variety of frozen pies and cakes, and we will continue to do that."

Given the incentive, consumers will consider the frozen varieties, he said. "We're constantly putting items on special purchase and passing the deals on to our customers."

Fresh-baked items don't necessarily cream their frozen counterparts, noted Bill Campbell, frozen food merchandising manager at Associated Food Stores, a Salt Lake City-based wholesaler.

"The store managers try to balance that as much as they can," he said. "It depends on how strong their in-store bake program is. If it's really good, they probably promote it more than the frozen."

But frozen and fresh cakes, pies and pastries are complementary during peak demand around Halloween, Thanksgiving, Christmas and New Year's, Campbell said. "They work hand in hand. There are two segments: Some people are going to want to bake their own, and some people are going to want the convenience."

Holidays bring cross-merchandising opportunities, he noted. "We'll tie it in with turkeys and frozen meals. We advertise them together -- your holiday meal type of thing. We do a lot of that," he said.

At Acme Markets of Virginia, North Tazewell, Va., in-store bakeries have not bitten into the frozens business, according to Jim Delp, director of merchandising.

"It doesn't affect it at all," he said. "It's like there's two different customers. When [the bakeries] are running a pie in our ad, we make sure we don't run [a frozen] one that week.

"We run a custard pie once a month, usually rotating between manufacturers," Delp explained. "We do multiple pricing, and it has really worked well."

Acme's sales of frozen baked sweets have been fair, he said. "They're a steady business, and they are promoted. But we haven't seen any growth in that category."

Nationwide, dollar and unit sales sank 6.4% and 9.3%, respectively, for frozen baked sweets in the 52 weeks ended May 21, according to Information Resources Inc., Chicago.

Among specific segments, frozen pies saw modest gains, up 5.5% in dollar volume and 2.3% in unit sales for the year ended March 11, reported A.C. Nielsen, Schaumburg, Ill. Exceeding that were frozen cobblers, dumplings and strudel, which rose 8.6% in dollar sales and 7.8% in unit volume.

"One of the better items right now in pastries would be the Pillsbury toaster strudel. It picks up a bit when school season begins," said Glenn Ganaway, frozen food and dairy buyer at Capistar, a Holt, Mich.-based wholesale subsidiary of Spartan.

Frozen cakes, on the other hand, saw a big drop -- falling 10.6% in dollar volume and 9.1% in unit sales -- and frozen breakfast cakes and sweet rolls dipped 4.3% in dollar and unit sales, according to Nielsen.

"Cakes are doing OK, but the pies are outpacing them," said Bryan Ryckeley, grocery and frozen food buyer at H.G. Hill Stores, Nashville, Tenn.

Mrs. Smith's and Edwards are Hill's best-selling frozen pies. "We're up considerably with Edwards. They've increased their promotional activity, and we're doing real well with them," Ryckeley said. "We'll combine a price reduction yellow-tag program with newspaper print and other media advertising."

Displays sometimes support temporary price reductions on frozen baked sweets. "We do some dedicated end-bunker programs for big promotions," he said.

At Acme, cakes also trail pies. "They're about a third of the movement of the pies. We probably sell three-to-one, pies over cakes, in a normal quarterly movement," Delp said.

On average, Acme devotes five case doors for pies and cakes and two doors for pastries, which are slated to get more room. "We've given more space to the low-fat items," Delp said. "We've added more Weight Watchers products; that has been the biggest change for us. They are starting to pick up."

That hasn't been the case at Nob Hill Foods, Gilroy, Calif. Sales of diet-type desserts have "decreased in sales significantly," said Sheila Thomas, frozen food and dairy buyer.

"The whole [light] category in general has really decreased. I think it's not as diet-conscious as everyone thought it was a few years ago," she said.

Frozen pastries, for dessert and breakfast, have been hit-or-miss, buyers and merchandisers said. "As far as the turnovers, apple dumplings and other pastries go, there's not real big volume," Spartan's Westrate said. "It's the type of item where [customers] walk by, they see it, it looks good, it's attractively priced and they buy it."

Retailers and wholesalers told SN they have no plans to add space for frozen baked sweets except during the fall and winter. More promotion could expand the category, they say, but support for it has been only half-baked because in-store bakeries lure more customers and yield tastier margins.

"All in all, the [frozen baked] sales for us are relatively flat," said Mike Schnapp, frozen food, dairy and bake-off buyer at Seaway Food Town, Maumee, Ohio. "We actually try to pull [customers] to the bakery because it's usually a larger register ring and there's more unit profit." New frozen products have been slow in coming, Schnapp said. For example, at Seaway, fat-free and sugar-free pies were introduced in the bakery. "They were made available for deli repurchase much quicker than they came out into the [frozens] case," he explained. "So manufacturers are driving the business into the delis or the bake-offs just as hard as the grocers are."

Pat Brooks, director of frozen food, dairy and deli at Save Mart Supermarkets, Modesto, Calif., agreed that frozen pies, cakes and pastries could use more promotion. "I don't think manufacturers are giving us enough activity to keep it before the consumer," he said. "I'd like to see a little more from the manufacturers to promote [the category] more often."

Space invasions by other frozens segments also are squeezing the category, Spartan's Westrate noted. "They're competing for space with dinners and entrees, juice, potatoes, bagels, pizza and other high-volume items. Baked desserts, other than for the holidays, generally aren't your highest-volume items."

The problem with frozen baked sweets is that sales remain largely seasonal and they lack the visual appeal of the fresh-baked items, retailers and wholesalers said.

"Come the holidays -- Thanksgiving and Christmas -- we'll sell probably 90% of all our product," Associated's Campbell said. "[Stores] devote their promotional space to the seasonal items."

But some items see more balanced movement. "The cakes are a lot less seasonal than the pies, which are really big October through December," Spartan's Westrate said. "We'll promote the cakes a lot in the summer and spring as well. And we can promote the cream pies in December as well as July."

"There are opportunities to sell the cakes and pastries year-round," Save Mart's Brooks said, noting that thaw-and-serve items like cream pies and layer cakes see a modest sales rise in the summer.

Still, Groub's Miller said he doesn't foresee increased promotion of the category. "To warrant putting it in the ad, we have to see pretty good activity generated to pay for its space," he said. "It's just something that even if you did twice as good as you ever did, it's only half as good as some other [frozen] items."