HEALTHY ITEMS GAIN MUSCLE

MARYELLEN LO BOSCO

A proliferation of stockkeeping units is enabling better-for-you frozen dinners to command a healthy amount of space -- from 25% to 50% -- in the dinner/entree category.

Brand leaders like Lean Cuisine and Healthy Choice continue to expand their offerings, while smaller companies like Amy's and Cascadian Farm, formerly catering only to the hard-core healthy niche, have found their way into mainstream freezers.

ConAgra recently launched a low-fat vegetarian line under the auspices of Golden Valley Microwave Food, Edina, Minn., one of its operating companies. Advantage\10, which currently includes four frozen entrees, is initially being sold only in health and natural-food stores.

Even a major wholesaler, Fleming Cos., Oklahoma City, has gotten into the act with its new Living Well private-label line of healthy entrees. Fleming is positioning the product as a major brand, merchandising it between Healthy Choice and Lean Cuisine.

The line, which currently has eight SKUs, was introduced last December and is currently in 50% of Fleming-supplied stores, as well as in all the company's retail stores, according to Sarian Bell, director of marketing for Fleming brands.

Fleming's strategy is to continue to introduce new items and delete less popular ones, while slowly developing the product line.

"People want to continue seeing new things. We will have additional selections later this year, to ship in the fourth quarter," Bell said. "January and February are a very important drive period for better-for-you because people are making New Year's resolutions and thinking about improving their lifestyles."

Bell is optimistic that better-for-you will continue to expand as a subcategory, citing statistics that show strong growth in the healthy brands, in contrast to more stagnant growth across all dinners and entrees.

Fleming plans to keep the Living Well line mainstream enough to appeal to a broad audience while at the same time taking advantage of other trend opportunities -- like the growing appeal of ethnic flavors.

Similarly to Fleming, most retailers try to group better-for-you items together in the lineup.

For example, at Ukrop's Super Markets, Richmond, Va., Bob King, category manager for frozen food and diary, said he has healthy items "somewhat together," but items are first grouped by price point.

Ukrop's carries Healthy Choice, Weight Watchers, Lean Cuisine and Budget Gourmet Lite, and the brands appear one after another. King noted that Ukrop's also carries Amy's, Cedarlane and similar natural and/or organic brands, but they are merchandised in the natural-food store-within-a-store departments.

King said that healthy items make up about 50% of the dinner/entree category.

Big Y Foods, Springfield, Mass., segregates healthy items, which include Healthy Choice, Lean Cuisine, Weight Watchers, Amy's, Cascadian Farm and Legume, according to Mark Capicotto, dairy/frozens director.

In addition, the healthy dinner/entree section is highlighted with green shelf molding and a category sign that says "healthy food."

"We have five to eight doors at the beginning of the run, and then the rest of the dinners and entrees," he said.

The entire dinner/entree category encompasses between 20 and 30 doors, depending on the store. Capicotto also noted that "healthy" is growing from 8% to 10% each year, and he expects continued, moderate growth.

Scolari's Food & Drug in Sparks, Nev., also groups better-for-you selections together, merchandising Healthy Choice next to Amy's, Celantano, Cedarlane and Taj. According to Russ Hahn, buyer/merchandiser, "healthy" accounts for about 10% of sales in the category and is merchandised in about 8 feet.

"In some respects it's growing," he said, citing 1.5% growth for last year.

Terry Humel, vice president of grocery merchandising at Rainbow Foods, Hopkins, Minn., said that while dinners and entrees are grouped separately, better-for-you is grouped together within each subcategory. Rainbow Foods, a Fleming-owned chain, carries Healthy Choice, Living Well, Lean Cuisine and Weight Watchers.

Rainbow stores, many of which are located in metropolitan Minneapolis, have a customer base with "a highly developed recognition of better-for-you categories," Humel said. Healthy selections account for 50% of the dinner/entree category, with sales growing about 7% annually, said Humel.

At Foodland Distributors, Livonia, Mich., dinners and entrees are grouped by brand, since manufacturers want to get "a large billboard effect with their label," said Jeff Barta, frozen food buyer and merchandiser.

Space devoted to healthy averages about 12 feet, in a 32-foot set of dinners and entrees, according to Barta.

Fleming merchandises better-for-you in several different formats, according to Tom Rose, director of category marketing for grocery and frozen.

"We customize it for each particular store we service," Rose said, "keeping in mind we want to keep a brand together by dinners and entrees.

"Usually, we start the section with traditional dinners and then move into healthier items. We try to target about two-thirds of space to traditional items and about a third toward healthier items," he continued.

Rose said space for healthy has increased in the last year, due to new brands and items. Rose's recommendation to Fleming-supplied stores is to carry, in addition to Living Well, Healthy Choice, Lean Cuisine, Weight Watchers and Budget Gourmet, since they are the market leaders.

The type of signage used for the subcategory varies, depending on the retailer, said Rose. Some stores use additional signage, while others don't. And some may have special signage advertising one major brand or another.

According to Rose, the healthy subcategory in dinners and entrees has begun to stagnate. Still, "ConAgra and Nestle have big plans to push new items for the balance of 1998," said Rose.

"A flavor [in this category] will usually have a life of a year, and then it's time to introduce something new. That's why you find a lot of item replacements," he explained.

Rose pinpointed the consumer of these items -- based on research gathered by Fleming -- as typically a female, who is a college-educated full-time professional, usually with no children, aged 35 to 54, and who is concerned about what she eats and willing to spend a little extra money on it.

Some of the other retailers modified this profile, according to their observations. For example, Barta said the typical consumer was suburban and middle class, while Hahn said the products are bought across the age spectrum.

King of Ukrop's described the typical customer as someone who is health-conscious and not price-conscious, and who wants something fast and convenient that is not loaded with fat. Finally, Capicotto identified the major buyer as a middle-aged baby boomer.

The retailers SN spoke with promote better-for-you items on a regular basis and also demo product. A few mentioned that some promotional efforts are pitched as meal solutions.

Foodland strongly emphasizes healthy items twice a year: at the beginning of the year, and at the end of the summer, when people are more likely to be thinking about improving eating habits. Dinners and entrees are promoted almost weekly.

Barta began including better-for-you SKUs in the meal-solutions section of his ad about eight months ago. "For example, a healthy [dinner or entree] will have supporting items like a higher quality vegetable and reduced-fat garlic bread," he explained.

Healthy dinners and entrees are incorporated into Ukrop's extensive in-store meal-solutions program, with demos that stress ease of preparation and health.

Hahn at Scolari's promotes Healthy Choice six or eight times a year, and other brands as part of an overall program. Capicotto promotes healthy two or three times a quarter, and dinners and entrees every week.

At Rainbow Foods, better-for-you SKUs are promoted every six weeks. Humel says she is pleased with the sales of the new Living Well Line, which is currently priced 15% to 20% lower than the national brands.