PIZZA PIZZAZZ

BARBARA McDONALD

Restaurant-style pizza continues to fuel sales in the frozen aisle, according to retailers polled by SN.

While self-rising crust is the major feature of most new products that have grown the category, innovations are added almost every year to attract more consumers to frozen pizza.

"Upscale pizza is growing and carrying the category growth. We are up over 10% for the year, in same-store sales, in the pizza category," said Mike Wilkins, category manager for frozens at Genuardi's Family Markets, Norristown, Pa.

Depending on store size, Genuardi's devotes five to seven upright doors to pizza.

At Harris Teeter, about 35% of the total frozen-pizza space is allocated to rising crust brands, said Bryan Nichols, frozens category manager for the 141-store chain based in Charlotte, N.C.

Said Nichols: "Quality merchandising is the key to growing brands and segments. Consumer needs continue to change. More time-pressed shoppers are looking for ready-made meals that taste good and are convenient.

"The rising-crust pizza segment, led by DiGiorno, meets this demand," Nichols said.

Frozen pizza, with $149.8 million more in retail sales than a year ago, has surpassed the ice cream/sherbet category, climbing up a notch from third place to second among the Top 10 frozens categories, according to Information Resources Inc., Chicago. Its growth rate was 9.4%, second only to the growth in frozen meat, which was 20.1%. The frozen-pizza category itself is second only to frozen dinners and entrees.

All told, dollar sales of frozen pizza in food stores in the United States for the 52 weeks ended Aug. 16, 1998, were over $2 billion, according to IRI.

"In pizza, the rising-crust segment is selling hot and heavy," said Russ Hahn, buyer/merchandiser for Scolari's Food & Drug, an upscale 19-store chain based in Sparks, Nev.

As reported in SN, the DiGiorno brand, a product of Kraft Pizza Co., Glenview, Ill., entered the market in 1996 and was the first rising-crust pizza to become widely popular, racking up more than $100 million in sales in its first year.

According to Wilkins of Genuardi's, DiGiorno is the best-selling brand in his stores. "It is outselling everything by far; in fact, its increases are up over 50% in our stores."

Tom Sampson, category business director for Kraft Pizza Co., calls the supermarket frozen-pizza category "significantly underdeveloped" at $2 billion, compared with the NPD Group-estimated $27 billion overall pizza category, which includes restaurant meals and takeout. NPD, in Rosemont, Ill., tracks national eating trends. According to NPD, pizza has become the most popular lunch/dinner in-home meal. Kraft's aim is to continue to take market share away from the pizzeria.

Sampson considers Kraft's Tombstone brand to be the best-selling in the nation. Citing ACNielsen data, he said that for 1998 to date, Tombstone has a 17.5 share while DiGiorno has 14. Kraft also owns Jack's, a regional brand in Wisconsin that was the first to offer a rising-crust pizza.

Sampson attributes DiGiorno's spectacular growth to the quality of the product, an advertising campaign developed by Foote, Cone & Belding, Chicago, and even the "Rising Crust" hot air balloon that travels the country promoting the brand.

In its quest to develop new flavors to compete with carryout delivery, Kraft and California Pizza Kitchen, Los Angeles, have launched a test in northern California, Atlanta and upstate New York markets, using California Pizza Kitchen's unique toppings. The frozen version tastes just like the restaurant's, Sampson said.

"Acceptance from the retailers has been tremendous. As we have tried to innovate in the category, our retailers have been increasing the space, which helps us."

Test products come in six varieties: grilled vegetable, five cheese, barbecued chicken, rosemary chicken and potato, Thai chicken, and Southwestern bean, Sampson said.

Harry Balzer, vice president of the NPD Group, told SN that the frozen-pizza category is underdeveloped. Ten years ago, pizza did not even make NPD's Eating Trends list, he said, and now it is at the top of the in-home meals list. "That speaks volumes about the change in the American lifestyle. More and more, meals are becoming one-dish meals," he said.

Pizza has also become a significant item on IRI's New Product Pacesetters list. DiGiorno was No. 10 in 1996, while in 1997 Freschetta and Tombstone Oven Rising made the Top 50. Freschetta, a self-rising product made by Tony's Pizza Service, Minneapolis, was No. 7 on the list, according to Carl Henninger of IRI.

Speaking at the National Frozen Pizza Institute's annual convention Sept. 25 in Lansdowne, Va., Henninger told about 50 assembled pizza manufacturers and suppliers that the future will be very bright indeed, if they can keep up the new product innovation. "We track 266 different categories, so the fact that frozen pizza has hit big on three different brands is one of the big success stories in the total store," Henninger said.

"And the really good news for retailers is that because of the premium nature of this product, the ring is way above average for the category. It gives them a nice bump in sales every time one of these items is purchased," Henninger told the group.

Manufacturers regard their competition as the takeout industry, Henninger noted, and frozen pizza is a great value in relation to takeout, he said.

For example, on a recent Saturday, at a Waldbaum's store in Rocky Point, N.Y., a handwritten sign on the freezer door called attention to a rising-crust brand, saying: "Don't call Domino's!" Waldbaum's had the 13-ounce size of DiGiorno at $3.79, 30 cents above the suggested retail price, but 20 cents less than rival King Kullen Grocery Co. in the same town.

During the same time period, at an Edwards Super Food Stores unit in Port Jefferson Station, Long Island, the price for a large Freschetta pizza (27 ounces) on bonus buy was $5.49, 30 cents off the regular price.

"The Celeste brand is coming into the market with the rising crust as well," noted Hahn of Scolari's. "The price is pretty close to DiGiorno and Freschetta, and so are the ounces, so it should prove successful." Launched regionally last October, the Mama Celeste Fresh-Baked Rising Crust line has three-meat, supreme, four-cheese and pepperoni offerings.

Hahn also noted the rising-crust brands are taking business away from the pizzeria. "People are going upscale, to the more desirable rising crust and Tombstone's stuffed crust." There is still a market for the nonrising crust kind, but he suspects the lower cost frozen pizzas will become mainly the domain of youngsters, while adults consume the pricier versions.

For Kevin Nugent, grocery and frozens buyer for seven Nickel's Payless stores and a chain of five box stores, Food 4 Less, based in Visalia, Calif., the rising-crust segment is also dominant. "In our box stores, we have anywhere from 16 to 24 feet devoted to frozen pizza; maybe one-third of that is the rising-crust segment."

Priced at the higher end of the tier, it's not a budget or bargain pizza by any means, he said. "It's proven that people know what they want when they want a pizza, and they are not afraid to spend the money."

Nonetheless, there are areas in the country where consumers are looking for more traditional frozen products. Doyle Tidwell, owner of a Piggly Wiggly in Nashville, Tenn., said "the thin crust is our best seller; we've got [the rising-crust pizzas], but they just aren't selling."

Totino's sells well, in all flavors, he said. His store also does well with Piggly Wiggly private label, and Tony's, Tidwell said. He observed that Nashville has a pizzeria on just about every block, "and they'll deliver them to the door, that may be why. In the store, they don't serve fresh pizza; they used to, but they took it out about two years ago because it just wasn't doing that well."

Some retailers say the best time for pizza is during fall and winter for snacking; others say it's strong all year.

"The best technique, we have found, for merchandising it, is to use endcaps. Incremental sales from endcaps without deep discounts have proven to really increase our sales," Wilkins of Genuardi's said.

"Promotions keep sales strong during the winter months," said Nugent of Nickel's. "There is no peak season for pizza; it's pretty much all year. We get price breaks from the vendor, and pass them along to the consumer.

"There usually is a pizza temporary price reduction, although not always on a rising-crust brand. Usually there is a TPR on at least one pizza, and a lot of times more than one. In-store we might advertise three or four brands," he continued.

In the box stores, a coffin freezer holds anywhere from 20 to 50 cases. In the conventional stores, the proportion of space devoted to pizza would be half that much, but both devote the same proportion of space to rising crust, Nugent said. Both circulars and newspaper inserts are the format for promotions in both types of stores, he said.