SEASONAL APPETITE

BARBARA MURRAY

Retailers are waiting to see if the down economy will have a negative impact on the frozen appetizer/snack rolls category, which hits its stride every year in the fourth quarter and again at the end of January during Super Bowl time.

With price points around $2 to $4, frozen appetizers are vulnerable to being ditched in favor of something like frozen pizza, which can serve more people at a lower price, retailers told SN.

Mike Ryan, executive director of the Eastern Frosted Foods Association, Wanaque, N.J., called frozen appetizers "seasonal, and very much an impulse kind of sale. If it's not on display in an eye-stopping kind of way, it's not going to sell. Generally, when people are buying for parties, if they don't fall over it, they won't think of it. It's not on the list, usually."

Dollar sales in the category are up by 4.3% over the year before, according to Information Resources Inc., the Chicago market research firm. Unit sales dropped by 3.5% at the same time, in supermarkets for the year ended Sept. 8.

Showing substantial increases are private-label appetizers, up 87.6%; the TGIFriday's line, purchased last September by Heinz, up 12.5%; El Monterey, up 157%; Jose Ole Mexi Minis, up 90%; regular Jose Ole, up 71.7%; Bagel Bites spin-off Hot Bites, up 91.9%; and Hot Bites Blasts, up a whopping 183.4%. Original Bagel Bites were down 15%, IRI statistics said.

New from Schwans Consumer Brands, Bloomington, Minn., is a pizza item, which Schwans is asking to have placed in the appetizer section -- Red Baron Stuffed Pizza Slices. "It's new and exciting in where they are asking for it to be placed," said Bill Spear, frozens buyer for Bashas' Markets, Chandler, Ariz. The triangular, handheld item is brand new so Spears said he couldn't tell yet how it is selling.

Spears and others said there is no doubt that the appetizer category sells better in the winter holiday times, but there are other items, such as frozen taquitos, that sell by the ton year-round, so those are not necessarily seasonal. "The best items by far in our market is Delimex Taquitos," he said. "We sell those day in and day out."

Bashas' will do endcaps for the month of December, dedicated to appetizer items, Spear told SN.

In Arizona, the economy is saved by the residential building that is going on. "It will be interesting to see what happens this holiday season. Appetizers are associated with entertaining, so if people aren't doing as much entertaining, you will see a dip," Spear said.

When Roger Davidson from Ahold USA spoke to the Frozen Food Association of New England at its annual meeting in September, one who heard him reported that he believed the advent of TGIFriday's appetizers has reignited that area of the frozen food case, with its dozen items, like mozzarella sticks, zucchini sticks and Buffalo wings that have brought focus to the segment because of their high quality and name identification. Davidson himself could not be reached for this article.

TGIFriday's has promoted its products by holding contests, for creative displays in stores, one retailer told SN. "Promotion is the name of the game, in my opinion. If you don't promote, how do folks know that you've got it? That takes the manufacturers doing their part as well; it's a partnership."

Originally, Anchor Foods made the Popper brand, then Anchor linked with the TGIFriday's label, then Heinz bought them out. Heinz continues to do promotions, said Russ Hahn of Scolari's, Sparks, Nev. "Usually if you got a good seller out there, they'll stay promoted," he observed. In his market, also, mini tacos from Jose Ole are doing very well, as are bite-sized pierogie bakes from Mrs. T's.

Sometimes people use the small pizzas or private-label pizzas for party snacks. Scolari's reintroduced its own Pizza Bites, and Combos, which are sausage and pepperoni mixed, then pepperoni, in 20-ounce and 7.5-ounce sizes. "It was a funny thing with these private-label items," made by Frozen Specialities, of Ohio, he said. "Three years ago we had them, but they just wouldn't take off. Then they came back out with new packaging; now they're starting to take off."

Nancy's Petite Quiches, he said, are offered at Scolari's on a seasonal basis, now through Super Bowl time, at a price point of $2.99. For the most part they sell well, he said, especially the mainstream flavors, like spinach and cheese. Pecan or mushroom are slower.

Pagoda egg rolls do pretty well, as do Kahiki Foods' skewers, which were first introduced at the National Frozen Food Convention in San Antonio in 2001. "We took them on within two months of the show," Hahn said.

Heinz Frozen Food acquired three frozen food snack brands at the same time, back on Sept. 25, 2001, said Heinz spokesman Robin Teetz. In early October 2001, Heinz acquired DeliMex from Fenway Partners, a private investment firm in New York, which supplies frozen taquitos and quesadillas.

Alan Gold, manager of frozen food and deli purchasing for Unified Western Grocers, Commerce, Calif., agreed that the fourth quarter is when you get the most sales, but it spikes in January during the Super Bowl and some of the other holidays.

"Bagel Bites used to be like appetizers, but now they are more an after-school snack. The manufacturer's promoting them that way in TV commercials is a smart approach, because they can sell year-round," Gold said.

Just about anything that you put in an endcap will generate more sales, he said, because it has more exposure. "One of the things we have seen in snack items is, the larger packs are starting to do better, because they are a big value."

In fact, IRI's statistics tend to confirm that, with dollar sales up but unit sales down.

This is a promotion-driven category, Gold said, but manufacturers are not promoting like they used to, so it's impacting sales. "Some of the manufacturers have backed off on promoting them. The ones that are selling the best for us right now are Nancy's," he added.

Another nugget from the IRI statistics is the drive among drug stores to sell frozen appetizers. That is the channel showing the largest growth -- more than 20%.

"Most of the drug channel frozen sales that I've seen are ice cream," Gold said, "Maybe they are experimenting."

Ryan of the EFFA said it's important for retailers to have a mix of franks and blankets and the nontraditional items. "It has to be a mix," he said. "There is still interest in exotic flavoring, definitely an interest in more ethnic type items, Chinese or Indian.

"If anybody can figure out how to take the seasonality out of it, and sell it more year-round, that would be good," he said.

For one award-winning retailer in Utah, the category is pretty unexciting.

"We only sell a little bit of the rolls and pizza snacks year-round, but it's all done mainly in the fourth quarter, for the Christmas holidays and Super Bowl," said Michael Nigh, grocery merchandiser for Harmon City stores.

There are better markets for snack food than Utah, he said. For the large Mormon families here, it's too expensive, he said. "The economy here is soft, especially compared to a year ago when we had the Olympics and all the construction. We've had four super Wal-Marts come in, too," Nigh added.

On the other hand, a buyer for a privately held Texas grocer told SN that frozen appetizers are going great. "It's a growing category. Why? Just because of total convenience. It's handheld, and easy to fix, microwaveable, and tastes good." This buyer, who did not want his name used, said he didn't think his company was doing anything different, but the manufacturers seem to be promoting the products more, and there are a lot of new items.

Entry of so many new items make for some hard decisions. "There's not enough room to put all the snacks in there," he said.