HAND TO MOUTH IS GOOD

KAREN DeMASTERS

American families are always on the go, and even more so when school starts. That means an increased demand for all types of food that can be popped into the microwave or toaster and then held in the hand to be eaten on the run.

The quick preparation and no-clean-up convenience of most frozen snacks and hors d'oeuvres continues to push sales of the category upward, with many items in the category maintaining double-digit increases for multiple years and some even doubling or tripling sales in a year's time.

"Display and promotion are the two key elements for frozen snacks and hors d'oeuvres. That can push sales up 300% or 400%, if done right," said John Beyer, frozen-food promotion manager for Supervalu's central region, based in Xenia, Ohio.

Combine that with the consumers' desire for convenience and manufacturers' producing the same high-quality items found in popular restaurants and bars, and you have a category that is on the upswing and shows no signs of slowing down in the near future.

Frozen hors d'oeuvres and snacks, which include a wide variety of types of meat, vegetable and bread items, increased in sales 13.8% from $422.8 million for the year ended July 17, 1999, to $481.1 million for the year ended July 15, 2000, according to ACNielsen, Schaumburg, Ill.

That increase is on top of a 6.3% increase in dollar volume from July 1998 to July 1999. Prior to that, the category increased 6% for the year ended in July 1998, 13% for the year before that and a whopping 21% for the year ended in July 1996, according to ACNielsen.

The two hottest-selling items for the past year have been pizza rolls, which increased in sales by nearly 14% to $150 million to reach the top of the category, and egg rolls, which increased sales more than 14%, to $62 million. Cheese sticks, pretzels and stuffed jalapeno peppers were the next three top-selling items, followed by dozens of other frozen snacks and hors d'oeuvres that have smaller shares of the market. Many of the frozen items have registered double- and triple-digit percentage increases only because they are building on a small base, but each still contributed a share to the popularity of the category.

"These items are a great convenience for the busy person," said Beyer, who works with 580 stores in the central region. "A shopper can pick up everything for a meal in one stop and have it on the table a half hour after he or she gets home."

Convenience is the biggest selling point, agreed Tracy Carlson, director of the strategic marketing group for Promar International of Alexandria, Va., a research company that specializes in food and agriculture businesses.

Gary Ashbay, shelf manager for Spartan Stores, Grand Rapids, Mich., said, "These convenience items are huge for us." Spartan now has 119 stores in Michigan and Ohio with the takeover of Seaway Food Town of Maumee, Ohio. "The biggest boost has been the introduction of Mexican-style items -- tacquitos, mini tacos and bean dips.

"For a long time these things were available in restaurants but not in supermarkets," Ashbay said. "Now good-quality items are available in supermarkets and we are expanding the shelves to accommodate them. This is a spinoff from the restaurant trade. I've seen it grow from one or two freezer doors to three and four doors. More space is being added as stores are being remodeled."

Steven Mitchell, vice president of marketing for Acme Markets of Virginia, North Tazewell, Va., agreed the restaurant connection is a key to the growth in sales.

"This is a transfer from bars and restaurants to supermarkets, because now the same food is available in the supermarket to take home. Pizza rolls, mozzarella sticks and all the finger foods are big business," Mitchell said.

"Sales of these items are pulling from the restaurant trade," agreed Beyer of Supervalu. "The manufacturers are trying to snatch back those customers who went to restaurants."

And the strategy apparently is working.

"Stores are scaling back on dairy items and devoting more space to frozen foods, especially snacks," Beyer added. "In the large megamarkets, they are adding 40 to 90 linear feet of frozens. It helps that these are now restaurant-quality frozen snacks.

"You take the quality and the convenience and then do good promotion and the category will just keep growing," he added.

Supervalu uses advertising to help a shopper put together an entire meal using the frozen items, Beyer said.

But, as in the real-estate market, the key to success is location, location, location.

"We do some advertising but no coupons or cross merchandising. It is all display," said Mitchell. "These are impulse purchases, so having people see them is the key."

Acme Markets of Virginia also has taken advantage of product demonstrations when they have been available from manufacturers.

"Finger foods lend themselves very well to demonstrations," Mitchell said. Spartan uses price reductions to help promote the category and then gears some of the advertising to teenagers and younger buyers, explained Ashbay.

Save Mart Supermarkets, Modesto, Calif., capitalizes on the frozen-snack and hors d'oeuvres category by using coupons at least every other month to promote the products, said Pat Brooks, director of frozen food, dairy and deli for the company. Save Mart has 83 conventional stores and 13 warehouse stores under the name Food Maxx in northern California.

"There has been good activity on pizza rolls, Hot Pockets and Lean Pockets for a while now, and we promote something from the category with coupons on a regular basis," Brooks said. "Our smaller stores have two doors of frozen snacks and the larger ones have three."

The space allocated for frozen snacks is growing as the stores are being renovated. Frozen snacks are usually kept near the complete frozen meals, he said.

Specialty food producers, such as Caribbean Food Delights in Tappan, N.Y., have taken advantage of the increased interest in convenient frozen foods.

"There has been a tremendous increase in sales of our Jamaican-style beef, chicken and vegetable patties," said Cheryl Nitto, director of operations.

"These are spicy, handheld sandwiches. We had a large increase in sales when we came out with microwavable items."

This fall the company is adding entrees such as rice and beans to the product line, she said.

In the Midwest, snack pizzas, pizza rolls and nachos continue to be the best sellers, and this has been true for some time, according to Supervalu's Beyer. Contributing to push the sales was the introduction of new 18-ounce boxes, in addition to the original 7.5-ounce packages, he said. In addition, new items, such as Pillsbury bagels that can be heated in the toaster, are popular.

Bryan Nichols, category manager for Marsh Supermarkets, which has 92 stores in Indiana and Ohio, agreed. "Any food that can be held in the hand is popular. The ones that can be carried with you and are quick to eat have had a steady growth."

Marsh, based in Indianapolis, uses end bunkers to display the special frozen items.

"We rotate different things in and out on a continuous basis, so that some frozen specialty is always being promoted," he said.

Clemens Markets, based in Kulpsville, Pa., has had a somewhat different experience with frozen snacks and hors d'oeuvres because the stores have catering-style takeout orders of 100-count hors d'oeuvres, which are always a big seller, according to Glenn Harmon, director of food service. Scallops wrapped in bacon, crab-stuffed mushrooms and franks in a blanket are the biggest sellers.

"The disposable dollar is available, people are entertaining and they are busier, so this is an attractive package," Harmon said. "This year with the millennium celebrations it was even bigger but the sales are going to continue to grow.

"This is not a price-point sensitive item," he added. "We run theme-based advertisements that include these items in the circulars, and increase the exposure around the holidays."