YES, IT CAN

BARBARA MURRAY

Panic buying, organic foods, the image of the can, price competition and national brands' dominance vs. the rise of private label are all current issues in the canned-goods category, a stable part of the supermarket.

Don Stuart, president of the consulting firm Cannondale Associates, Wilton, Conn., noted that there are far fewer manufacturers today than a decade ago, due to consolidation, and the various sections are therefore smaller than they used to be. Canned fruit and canned vegetables are the major segments, along with tuna and canned meals. Canned vegetables actually grew 2 to 3 percentage points during 1999, Stuart noted.

Indeed, some performed even better than that. Data from ACNielsen, Schaumburg, Ill., shows that for the 52-week period ended Nov. 27, 1999, canned spinach increased sales by 5.1% to $45.4 million, the best margin increase in the last three years for the category.

Can manufacturers Stuart spoke with recently said they had a strong fourth quarter, "probably because retailers stocked up in case of Y2K panic, which there wasn't. That will probably lead to a soft first quarter," Stuart said. Traditional winter canned-goods sales should help retailers bring their inventories into alignment, he added.

ShopRite stores' annual "Can Can" sale started Jan. 2, five days earlier than last year, but not because inventory was high, according to Karen Meleta, spokeswoman for Wakefern Food Corp., the Elizabeth, N.J., wholesale cooperative that supplies the 190 or so ShopRite stores. The sale, now in its 30th year, was planned at least six months out, she said, and it runs through Jan. 15. The timing may have been to ensure that no other retailer would get the jump on ShopRite, as happened last year when Giant Food Stores, Carlisle, Pa., launched a "gi-CAN-tic" sale a few days before ShopRite's.

The enduring can even carries off the image befitting the nation's hot gourmet and specialty trend. Barry Maddox, director of marketing for the Sewell-Allen group of Piggly Wiggly stores, Memphis, Tenn., said, "The only growth we have had in canned foods is in gourmet, international and organic/natural. Canned goods have become a commodity; there is no brand loyalty. We make a better gross profit margin on the specialty items, and we merchandise them differently, on chrome Metro shelves. It's become a routine stock-up category," Maddox said.

J.B. Pratt, owner of Pratt Foods Supermarkets, Shawnee, Okla., said Green Valley, a brand of canned organic vegetables from Chiquita Brands International, Cincinnati, which his stores tested last year, will add items to widen the line and increase exposure. "We are getting several new items in this week," Pratt told SN just before the New Year. He predicted that extending the line "will increase business, because of the variety and the synergy." Green Valley's label has been changed slightly, he said, to make the words "Certified Organic" larger.

While Pratt's stores carry the Muir Glen brand of certified organic canned tomato products, he said there is a problem with consumer acceptance due to the price, which is double that of regular canned tomatoes.

"In our conventional stores, selling canned organic vegetables is a real challenge. It's not so much the price point with the Chiquita products [which are under a dollar a can], it's just that getting the idea over to our customers that a preserved, canned product is just as good is still a challenge. Once they try it and find out how good it tastes, and once the price range gets within 20 to 30 cents [of the others], it'll work."

General Mills vice president Gene Kahn, formerly chief executive officer of Small Planet Foods, which owns the Muir Glen brand, said that, in canned tomatoes, "it's not a problem to get people to reconcile organic with canned, absolutely not. We have experienced it with canned vegetables, but not with tomato products. On the contrary, we have very strong consumer acceptance of quality tomato products being delivered in cans.

"Our Muir Glen tomato plants have higher brix [sweetness level]. We generally do not make quality claims, that organic tastes better, but in this case, we've been told it's true," Kahn said.

General Mills' recent announcement that it is acquiring the Sedro-Woolley, Wash.-based Small Planet "signals that organic foods are becoming mainstream. We are not just a specialty niche, but something that has much broader appeal."

Dave Watroba, director of nonperishable food for 19 Jubilee stores in western New York state, said canned goods' image as a blue-collar staple has not changed much. He said Green Giant has been aggressive with its 12-pack club pack, and, in terms of private label, he said he sees that market steering toward multipacks, in the same way that paper goods are now commonly sold in a bundle. Green Giant is a case in point, and quite a few private-label promotions feature overwrapped 12-packs, he said.

The canned-fruit market has been overtaken by fresh the last 10 to 15 years, so manufacturers are doing some unusual things to attract consumers' attention. Dole, for instance, launched a promotional sweepstakes that promises to send the winner into outer space.

In contrast to Dole's Outer Space promotion, the family-owned Oregon Fruit Products, Salem, Ore., ran a recipe contest, which offered aprons as prizes, for intergenerational recipes using its canned cherries or berries. Although that company has only two salespeople, the 14-item line is in national distribution, with most retailers carrying six to nine items, according to Erin Johansen, national sales manager. The items cost about $2 to $2.50 a can and Wal-Mart carries five of the company's items in its supercenters, she said.

Del Monte's Can Do campaign, which has been running for almost two years and shows no sign of stopping, offers consumers 27 quick, good-tasting meal ideas that are simple and easy to prepare. Some 41,842,000 coupons for Del Monte vegetables will appear in Valassis freestanding inserts Sunday, Feb. 13, 2000, and 14,803,000 coupons for Del Monte fruit appeared in Valassis FSIs Dec. 12, 1999.

New canned products include some single-serve fruits, from Del Monte and Dole. "I anticipate that we will carry them," said Richard Hardy, vice president for procurement at Associated Food Stores, Salt Lake City. The Del Monte version, he said, is called Fruit To-Go, and is described as lunch-sized, in plastic with a peel-back seal on top, similar to the packaging used by Seneca and Musselman's for single-serve apple sauce. "There have been a lot of line extensions," Hardy said, especially in fruits, with enhanced special packs and differing flavors.

Indeed, Del Monte announced it will introduce its Fruit To-Go line, its first fruit product line packaged in plastic, nationwide today. The company said the line will contribute planned margins higher than Del Monte's average, and is expected to generate more than $50 million in annual revenues for the company within the next 12 to 18 months.

"Del Monte has tried harder than any other to build brand equity," said Maddox of the Memphis Piggly Wiggly group. "But our movement goes to whatever's on sale."

Laver, of Associated in Salt Lake City, reported seeing a lot of new introductions in canned pasta, such as Nalley (an Agrilink brand) with its Meals for Now, which include chicken noodle casserole and other meat-and-noodle combinations geared toward adult consumers. Chef Boyardee, Laver noted, "also has some chicken canned pasta items, going after that same consumer." Both brands of noodles and meat in a sauce have done quite well, he said.

While Maddox said his stores plan no special sales for canned foods since they are declining in dollars and flat in units, the Associated group out West reports increases as high as 200% to 400%.

"The can is not going away. It fills a need for stocking up and provides good quality nutrition at a very good value," concluded Don Stuart of Cannondale.