THE JUST DESSERT

RUSSELL REDMAN

Some supermarkets have been fattening up their frozen dessert sections with frozen yogurt, scooping out space from ice cream, novelties and other frozen foods to make room.

Buyers and merchandisers told SN frozen yogurt warrants more freezer space because many consumers consider it a tasty, healthy alternative to ice cream. Also, more brands and flavors have entered the category.

"We've given it more space on the shelf," said Bob Henning, frozen food manager at Byerly's, Edina, Minn. "We haven't really taken a lot of things out. Basically, we've just cut down on different things. The premium ice cream bars and stuff like that seem like they're slowing down, along with the premium ice creams. It seems like more people are going for the fat-free items."

The chain carries 60 to 70 stockkeeping units of frozen yogurt, including Kemps, Edy's, Haagen-Dazs, Ben & Jerry's, Dannon, Well's Blue Bunny, Colombo and the store brand, Byerly's. The category's expansion has melted ice cream's display prominence, Henning said.

"The number of facings [for ice cream] compared to what we used to have has been cut down considerably," he explained. "We just put the same number of items in a lot smaller space."

At Village Super Market, frozen yogurt also has gobbled up some space from ice cream and novelties, according to Sam Ciardi, frozen food and dairy supervisor for the Springfield, N.J.-based chain of ShopRite stores.

"It's definitely growing," Ciardi said. "You have to cut down on the ice cream. Ice cream sales have slowed up, though it depends on the [trade] area. Maybe five years ago, a pallet of frozen yogurt was way too much. Now we send it out on distribution to start a sale. So you know there's a demand for it."

Frozen yogurt now consumes about a third of the ice cream section, he said. "You have to expand now into your ice cream section, and you have to allow for yogurt, which before you never did."

Novelties, such as, ice pops have been scaled back, Ciardi noted. "That's sugar and water, and people aren't letting their kids eat that anymore, not when you could buy a frozen yogurt on sale for almost the same price as freezer pops."

Supermarkets supplied by Affiliated Foods, an Elwood, Kan.-based wholesaler, have added "quite a bit more" space for frozen yogurt, said Mike Dewey, frozen food buyer. "They've been cutting out some other items that weren't moving as well," he said. "I think they're cutting out some entrees, some dinners and [other] different items." Well's Blue Bunny is the top-moving frozen yogurt brand, he added.

Greater demand and an influx of brands have broadened the frozen yogurt section at Cub Foods, said Dale Monson, corporate director of grocery merchandising for the Stillwater, Minn.-based chain.

"Our frozen yogurt sales are up. They have been increasing," Monson said, noting that Kemps is his best seller. "There are more players in the frozen yogurt market now, so I'd have to say it's taken some existing space. Most likely, it has cut into the ice cream. We've probably cut down on sizes plus reduced the width we've been giving it before as far as spacing."

Sales figures reveal supermarkets have expanded their frozen yogurt sections with good reason. For the 52 weeks ended April 23, the category rose nearly 8% in dollar volume and almost 5% in unit volume, according to Information Resources Inc., Chicago. A.C. Nielsen, Schaumburg, Ill., reported higher increases: 11.4% in dollar sales and 8.2% in unit sales for the year ended March 11.

Total bulk ice cream sales, on the other hand, have been relatively flat since 1990, Nielsen reported. For the 52 weeks ended March 11, dollar sales inched up 1.4%, while unit sales slipped 0.2%.

Both IRI and Nielsen listed Dreyer's Grand as the leading frozen yogurt brand. Though having only small market shares, Dannon, Turkey Hill and Well's Blue Bunny saw sharp sales rises, Nielsen reported.

"The Dannon hasn't been around that long, but it took off," Byerly's Henning said. The chain's leading brand is Kemps, which has added such new flavors as rocky road, strawberry shortcake, cookies 'n cream, fudge swirl and burgundy cherry, he said.

In the past year, new product activity has been slack, said the dairy and frozen-food buyer from a North Carolina chain. "The only activity I've seen is that Breyers and Sealtest have come out with some new flavors. The category is sort of stagnant as far as new items," he said. "In frozen yogurts, they've tended to be toward fruit flavors. For us, strawberry, peach and vanilla are the better movers.

"Our best-selling brand is probably a regional brand called Pine State," he said. "Of course, Sealtest and Breyers yogurts do well, and Crowley's does pretty good."

Turkey Hill has been hot at ShopRite. "Breyers used to be the leading name, but Turkey Hill is now taking over in my markets," Ciardi said. Other frozen yogurts the chain carries include Friendly's, Welsh Farms and Healthy Choice, a recent entry, he said.

"They've had a problem keeping up with demand," Ciardi said of Healthy Choice. "We had holes in our shelves where it was, so obviously it was selling. I had stores calling me looking for it."

Strong demand has forced many ice cream and yogurt manufacturers to also offer frozen yogurt, he added. "They have to or else they'll become obsolete. People want the frozen yogurt now."

Marty Wagner, head buyer and frozens buyer at Roundy's Ohio wholesale division, Lima, Ohio, has seen the same trend. "There is more space being devoted to [frozen yogurt]. Most of the [ice cream] manufacturers have gotten into frozen yogurt and also the no-fat or low-fat frozen yogurts," he said.

Unlike the case with ice cream, private label has had little effect in frozen yogurt, and sales have dipped for that market segment. Of the companies contacted by SN, only two had a private-label frozen yogurt: Byerly's store brand and Roundy's Old Time brand, which isn't carried by all divisions.

Despite sharing freezer space, frozen yogurt and ice cream don't necessarily have overlapping markets, Roundy's Wagner noted. "It doesn't seem to have hurt ice cream movement. It's picking up the customers looking for the no-fat, low-fat types of items."

A frozens buyer at a large Texas-based chain also said frozen yogurt hasn't cannibalized his ice cream sales, though more consumers have been starting to buy yogurt. "The sales are beginning to grow. Consumers want to have less fat intake in their diets," he said.

At the North Carolina-based chain, though, the frozen yogurt category has been cool lately. "The space just grew to a certain point, and now it's sort of plateaued," the buyer said.

The chain has 20 to 30 SKUs of frozen yogurt. "The yogurt has sort of gradually worked its way into the market. It's not a matter of cutting anything out to put it in," the buyer said. "It's just taken face space that I normally

would be putting either novelties or half gallons into."

Magruder Inc., Rockville, Md., has seen scant frozen yogurt action, too. "We haven't seen that much growth in it. It's been pretty stable," said Mark Polsky, senior vice president. "There have been a few new entries in the market, but by and large for us it's a segment that's kind of sitting." The chain carries 50 to 60 SKUs of frozen yogurt, which occupies about 15% of the ice cream section, he said.

What's also luring shoppers to frozen yogurt are specials. "The best seller is what's on sale," Polsky said.

"It's a deal-driven item, just like the ice creams," Roundy's Wagner said. Breyers is his best-selling brand, but Kemps and TCBY move well with special deals, he added.

But advertising one brand of ice cream and frozen yogurt together doesn't always work, Magruder's Polsky said. "Some of the companies prefer to promote it separately, and some prefer to promote it with their brand of ice cream," he explained.

"If you have one brand of ice cream and frozen yogurt on sale, that customer is probably going to buy one or the other. You have a better shot at a multiple sale if you have one company's ice cream and somebody else's yogurt."

It's now necessary to advertise both, ShopRite's Ciardi reported. "We used to separate them, and now [frozen yogurt] has gotten to be in such demand that we had to feature it with the ice cream," he said. "The market is split in half, almost."

Reduced prices work better than buy-one-get-ones, Ciardi noted. "Half-price sales are the way to go," he said.

"With BOGO, it seems like you're trying to force [customers] to buy two, whereas with half price [they] can buy one. But more than likely, [customers] are more inclined to buy two at half price than with BOGO, because we do better sales with half price. We have tried it back-to-back, a BOGO and a half-price sale on almost the same items, and we don't do as well with BOGO."

Retailers said they also promote frozen yogurt via in-store sampling, often with ice cream, and cross-merchandising with such items as fruit, nuts, toppings and cones.

Ciardi said sampling frozen yogurt near the fresh fruit might be effective. "Usually, the person shopping in the produce aisle is health-conscious," he explained.