WAFFLE

BOB BAUER

New products and trade promotions are pouring some sweet sales excitement onto frozen waffles.

After a soggy period, frozens buyers told SN that more activity in the last few months is pushing sales back up for waffles, which they said are the backbone of their frozen breakfast products business.

The new products and increased manufacturer support are especially welcome now, they added, because the winter months will be the best time to move more waffles.

"It's a fun category to promote, and it's trending in the right direction. That whole breakfast category is," said John Sommavilla, frozens and dairy purchasing manager at Spartan Stores, Grand Rapids, Mich., who oversees the category.

"The breakfast category has been one of the strongest categories lately, in terms of

increases," said Bill Campbell, a buyer and merchandiser at Associated Food Stores, a cooperative wholesaler located in Salt Lake City. "A lot of people are putting emphasis on breakfast now. It's helped the category."

That emphasis, from manufacturers in particular, is overdue, said a buyer with a Midwest chain.

"Things have turned around lately. I was wondering why it was taking so long for things to start happening in the breakfast area," he said. "The manufacturers now are being aggressive and more and more people seem to be buying breakfast foods.

"Our breakfast category sales had been declining, but in recent months that's changed. Waffles are a big reason for that," the buyer said.

Up until the fall, waffle sales had been lagging in supermarkets, according to latest data available from Information Resources Inc., Chicago. The frozen waffle category was actually down 4.7% in dollar sales, to $524.7 million, for the 52-week period ended Oct. 9, IRI figures showed.

There were some hot spots within the category during that period, however. The Eggo brand, for example, posted gains of about 5% for its Minis and its regular waffles, although its Nutrigrain varieties suffered a 21.5% decline. Eggo had three of the five leading varieties.

"I've been hitting [the frozen waffles category] pretty hard," said John Post, frozen-foods buyer at Dave's Markets, Cridersville, Ohio. Post, like most other buyers, said he has found breakfast items traditionally sell strongest during the winter months. "Breakfast items can do well as you get into this time of year and you've got kids in school and they need a quick meal."

Some buyers told SN that the category's strength most recently lay in the latest flavors.

"You've got some good entries into the category with some new flavors, that have expanded the growth," said Dave Lattimer, a buyer at wholesaler Cardinal Foods, Columbus, Ohio, a division of Roundy's, Pewaukee, Wis. Eggo's apple cinnamon is an example of a fairly new item doing well, he said.

"I think some of the growth is coming from the new items being introduced," agreed Campbell of Associated. Flavored varieties of waffles are the hottest thing in the breakfast category, along with french toast, he said.

Most buyers identified Downeyflake, from Pet Inc., St. Louis, as the brand that currently is the biggest trade spender, and thus the impetus to much of the new activity.

Sommavilla said Spartan's volume on Downeyflake was up 23% after the supplier tried a hot prepriced item.

"They went with a prepriced 99-cent package," said Sommavilla. "So we've been driving full-pallet module sales with them. On that preprice, we did a heck of a lot of business. That was part of their strategy." On the other hand, sales of products from Eggo, the leader in the category, are down about 6.5%, Sommavilla said. He said Eggo, marketed by Kellogg Co., Battle Creek, Mich., has been focusing more on consumer marketing than trade programs.

Post, like Sommavilla, said Downeyflake has been the most active of the manufacturers in terms of trade support.

"That's the one I've been advertising because that's the one I get the most money from for ad money and bill-back money. So I've been going with that line," he said.

Still, the buyers agreed that the Eggo brand continues to dominate the category in their sets and scanning results.

"They do a lot of coupon drops and freestanding inserts and things like that. They're more of the upscale brand. They're the leader in the category that way," Sommavilla said.

He added that Eggo has been pouring on the promotional emphasis particularly thick for its larger packages of waffles. Other buyers agreed.

For the most part, they said that the new items, such as the larger boxes of Eggo products or new flavors, have had minimal cannibalizing effects on sales of existing sizes and varieties.

In June, Spartan added bigger packages of Eggo's buttermilk and blueberry waffles, Sommavilla said. The Homestyle product has still posted a 7% gain in sales, he added.

While some boxes have been getting bigger, some waffles have been getting smaller. The mini waffles offered by Eggo are adding to category volume as well, said most buyers.

Doyle Burnaman, a buyer with Brookshire Bros., Lufkin, Texas, said the new product has been particularly well received in his market.

"They're probably doing about 40% of what the regulars are doing," Burnaman said. He, like others, added that the category overall is performing well, showing little or no signs of cannibalization. "The volume is still there. The sales are still there for us."

Cardinal's Lattimer said a shift in pricing strategy, with greater emphasis on multiple pricing and less on hot price points, has helped the waffle category.

The reason, Lattimer said, is that the pricing approach fits the ideal frozen-waffle consumers like a glove.

"They seem to be on the run. They are two-income families and they need a fast breakfast in the morning for the kids before they go to daycare. They're inclined to pick up some multiple pricing on a product like frozen waffles, put it in the freezer and give themselves a couple weeks of quick and easy breakfasts, vs. maybe buying one package at a hot price."

The retailers and wholesalers told SN they expect waffles to heat up more sales growth in the near future, at the head of a larger frozen breakfast business category that will continue to grow.

"Any sort of fast-food breakfast lends itself to quick preparation and makes the morning a little easier," said Lattimer of Cardinal Foods. "People I talk to are looking for a quick breakfast so that they can get the kids dressed and off to daycare, and still give them something good to eat."

He and other buyers said that, beyond waffles, breakfast burritos and similar products are helping to give parents more options. But are those new options going to hurt waffle sales?

"I don't think so," Lattimer said. "You don't want to feed your children waffles every single morning. It seems like anything that's easy to prepare does well. And you can buy just about anything you want for breakfast anymore in the frozen category: pancakes, french toast, scrambled eggs, the whole works. I don't think they cannibalize too much on each other."

For most of the companies contacted by SN, private label has not been a significant factor in the waffle category.

"I've tried it a couple of times and I haven't really had any success with it, so I've gone right back to [branded]," said Post.

Only Spartan's Sommavilla labeled private label as an important part of his company's and its retailers' waffle volume.

"We've done extremely well in private label," he said. He noted that Spartan's private-label waffles are packaged in boxes, as are Eggo's.

The wholesaler has added to its private-label waffle offerings this year, he said. "The two additions are the blueberry and the buttermilk in 11-ounce boxes, we added in March." Sommavilla said the new items have not had a significant effect on the homestyle variety that existed before them.