DINNER TIME

BOB BAUER

When it comes to restaurants, there's everything from fast-food places to family-style outlets to fine-dining establishments. Although the price and quality of the food varies dramatically, there are success stories at all levels, something retailers told SN is true with frozen dinners as well.

Frozen dinners, grocers told SN, continue to be one of the department's most steady categories, thanks in part to the wide range of offerings. While some were particularly high on one price range of dinners, most said there was balanced growth across the board.

"Entrees and dinners have rebounded, dinners especially," said Peter Marino, director of frozen food and dairy operations at Genuardi Super Markets, Norristown, Pa. "They're selling well and there are some new entries." Marino said ConAgra's Marie Callender line "is doing well and Swanson has improved since reformulating its packages."

Jim Booz, Genuardi's dairy and frozen food specialist, also noted a surge in the dinner category. "Dinners are coming back," he said. "It's all trends. Now that dinners are coming back, entrees will probably slack off a bit." Booz added that dinners and entrees sell best when merchandised in doors, rather than coffin cases.

"Dinners are doing well across the board," said a buyer with a California division of a major chain. "It's pretty well spread out from top to bottom in terms of price. You have some of the cheaper items doing well and you have some of the more expensive ones bringing in lots of sales. We're doing as well with Banquet as with Healthy Choice."

That can create some headaches in terms of space allocation, he added.

"With products in all price ranges doing well, you have to pay careful attention to what you're offering. You can't get too heavy in one area and you can't ignore any of the segments, either."

According to scanning data compiled by Nielsen North America, Schaumburg, Ill., unit sales of frozen dinners rose 2.6% for the 52 weeks ended Sept. 10, 1994, to nearly 428 million units. Dollar volume in the $1.1 billion category during that span was up 0.3%.

Swanson continues to lead the way, with a 27% unit volume share and a nearly 28% dollar volume share. Swanson posted gains of 13.5% in unit volume and 12.8% in dollar volume over the prior year. Healthy Choice continued its surge, up 23.7% in unit volume and 20.8% in dollar volume. It now has a 13.4% unit share and a 19.5% dollar volume share. Banquet, which moves 26% of the category's units and accounts for 19.2% of its dollar volume, posted an 8.7% gain in units and an 8.1% rise in dollars.

The Marie Callender name often comes up when retailers talk about hot areas within the dinner category.

Bill Campbell, buyer and merchandiser of frozen food at Associated Food Stores, a cooperative wholesaler located in Salt Lake City, said he is quite impressed with the brand's performance -- and the performance of the higher-priced items in general.

"The biggest increase I'm having here is in the upper-scale dinners and entrees like the Marie Callenders. The real growth is coming there. Price is not as strong an issue as it used to be." Campbell said the dinner category is getting stronger in terms of high-quality items, and he's experiencing big increases in sales of such products, particularly Marie Callender.

"Marie Callender is just kicking everybody right now. We're hitting 40% to 50% increases over a year right now in Marie Callender. It's an upscale, expensive deal, so there's some better dollar rings at the retail, which is encouraging."

Brokers are also impressed with Marie Callender's performance. "They're here and doing a pretty good job," said a Mid-Atlantic broker. "They've always made a real good product. They've just not moved into the top tier yet, like a Stouffer's, a Budget Gourmet or a Weight Watcher's or any of those guys. They're not in that range yet, but they're gaining."

He said upscale dinners should continue to gain.

"It seems as though the economy may tighten a bit. If that's the case, a lot of couples who currently dine out a lot because both are working and pressed for time may stay at home a little more and turn to frozen dinners. Since they're used to restaurant-quality food, they're going to turn to the more expensive items."

Like most retailers, Jim Roesner, frozen food buyer at Clemens Markets, Kulpsville, Pa., isn't putting all his eggs in one basket.

"[Marie Callender] is a good line, but a lot of it has too many steps to it," he said. "In some of them you have to take the bag out and do it separately. When you get into that with frozen food, it doesn't work. Campbell's found that out with its combos."

Whether or not those items survive, Roesner said, it's important to make the most of the limited space available to dinners. He said it's possible to offer a wide variety and still not carry every item available.

"You have to trim down, but still have a nice assortment. If a manufacturer has 16 items and I have eight, that's what I want. You've got to keep on it and switch when it's needed. I tell them, 'If you've got something that's moving, you let me know because we'll take a slower one out and put that one in.' That's what you have to do to keep it alive. I find that works. But you have to monitor or you can end up with dogs. People want new flavors. Look at ice cream; the weirder the flavor, it excites people and they buy it."

Roesner and other retailers noted it's important to carry a mix of products for economic reasons, as well as tastes.

"With our stores, we have a mix," said Danny Wells, frozen food buyer for Minyard Food Stores, Coppell, Texas. "We have some in lower-income areas where they will buy the Morton, the Patio or the Banquet vs. the Marie Callender because it goes further. Their money goes further. So we sell a lot of the inexpensive dinners and entrees and quite a bit of the higher-priced ones, too. It all depends on where the store is located."

Gary Olson, director of meat operations and frozen food at Foodland Supermarket, Honolulu, agreed that carrying a good mix is essential. He reported a recent rise in sales of the lower-priced dinners. "The low-tier dinners have been gaining for us, and the higher-priced ones have slowed somewhat."

A buyer with a large Northeastern chain has seen the same trend as Olson.

"In general, the lower-end dinners are outperforming the higher-priced items. The lower-end dinners are up, while the others are kind of flat. Of course, that's an overall view. "The clientele in our stores varies so that we have to have a good mix; and that mix changes from store to store," he said. "In our more urban areas, we naturally do a better job with the lower-priced items like Banquet. In some suburban stores, the sky is the limit." The buyer went on to predict that both ends of the category will continue to grow, due in part to the need in dual-income households to have quick dinner solutions available.

Foodland's Olson said Healthy Choice dinners have also been doing well, and he included that brand in the natural foods and healthy foods segment, an area he said is thriving.

"I think people are buying healthier. We're seeing that not only in frozen food, but processed meats. Healthy Choice is something people who watch what they eat will pick up."

Olson added that the category responds well to promotion. "We've had some good support from all manufacturers, and that's helped the category." The buyer from California also cited what he called a high level of manufacturer support.

"That's been true of this category for some time now. Healthy Choice has been leading the way, but the others have been there, also. Now there's even been more support for Kid Cuisine, now that they've revamped that line."