CHANGING THE BAIT

RUSSELL REDMAN

Frozen seafood sales may be floundering, but retailers are looking to new products, upgraded packaging and steep discounts to catch the attention of more consumers.

The frozen seafood business has suffered as fresh seafood counters have proliferated at supermarkets, luring away customers with attractive displays. In the past five years, frozen seafood volume has been slack, according to A.C. Nielsen, Schaumburg, Ill. Between June 1990 and June 1995, unit and dollar sales averaged about a 5.5% decrease on a year-to-year basis.

However, several developments in the category are encouraging, according to retailers and wholesalers.

New items, though sporadic, are focusing on healthier fare, which is highlighted on packaging, said Marty Wagner, head buyer at Roundy's Ohio wholesale division, based in Lima, Ohio. "The new products are geared toward health-type items, such as broiled fish or lightly battered, reduced-fat, reduced-calorie, etc. That seems to be where the newer items are."

According to Jack Kennedy, a frozens manager at Village Super Market Inc., a Springfield, N.J.-based ShopRite chain, "Gorton's has a few different fillets that they're promoting -- lemon and specific [types of] flounders -- and, likewise, Mrs. Paul's has a couple of new items here and there." Fish sticks and fillets remain the staples, but popcorn shrimp has carved a niche, he added.

Shrimp also is on the move at Associated Food Stores, a Salt Lake City-based wholesaler. "Shrimp is growing, it's doing quite well," said Bill Campbell, frozens buyer and merchandiser. "It's not an item they promote very often, but it is a growing category."

Private label, which has an 11.4% dollar share, according to Information Resources Inc., Chicago, has been absorbing more frozen seafood items, according to buyers and merchandisers. "Private label is getting more and more into that segment," Associated's Campbell said. Breaded shrimp has been added to the wholesaler's Western Family label, which includes breaded and battered fish sticks and fillets. "It's doing fairly good," he said, noting that branded is the best seller. "This is a very strong Van de Kamp's market."

Shurfine frozen seafood was added at one Midwestern wholesaler, its frozens buyer said. "One of the newest private-label categories in frozen is seafood, which is doing a lot better for us than a lot of the branded seafoods, evidently because of price," he said.

Roundy's-label frozen seafood is promoted as much as national brands, according to Wagner. "It doesn't [sell] as good as it should for the price difference. There's a big price variance between the branded and the private label," he said. "It's a relatively new item in this division, but I've found the quality is as good as any of the branded."

Ad dollar flow into frozen seafood has been steady, and discounts are often deep, which has become necessary to drive the category, especially in the key Lent period, retailers and wholesalers said. "Without a [price] promotion, it definitely slows down," ShopRite's Kennedy said.

Indeed, frozen seafood prices have been a sticking point with shoppers, Associated's Campbell said. "It's a high-priced item, and it's very hard to move volume, especially when you're competing against the fresh. [Consumers] look at the per-pound amount, and it's hard to relate a boxed price against that," he explained.

According to ShopRite's Kennedy, fresh seafood doesn't siphon sales from frozen, since customers buying the latter like to stock up. "It's a whole different shopper that buys the fresh," he said. "The frozen is more of a convenience item. With fresh, when you buy it you have to use it."

Fish sticks remain a popular quick meal or snack, Roundy's Wagner said. "The fish sticks do well; it's a good meal for mothers to make for their kids. Fish sticks is probably the segment of the category that's remained pretty stable."

Tie-ins like cocktail and tartar sauce, frozen potatoes and french fries often help spur frozen seafood sales, several retailers told SN. But higher-growth frozens categories are taking away display space, they noted.

For example, at Genuardi's Family Markets, Norristown, Pa., seafood has lost freezer space to pizza, handheld snacks and entrees, said Pete Marino, frozens director. "Seafood is one category that's very flat, and it's been losing space over the last year pretty regularly."

Van de Kamp's, St. Louis, and Gorton's, Gloucester, Mass., are the market leaders in frozen seafood, with 17.2% and 15.7% dollar shares, respectively, for the 52 weeks ended Oct. 8, according to IRI. Mrs. Paul's, a division of Campbell Soup Co., Camden, N.J., had a 12.5% share.

Total dollar sales of frozen seafood dipped 0.7%, to $708.7 million, in that period, IRI reported. Van de Kamp's sales fell 3.6% in that period, and Mrs. Paul's dropped 9.1%. Gorton's saw a 7% rise, and private label inched up 0.5%.

Some manufacturers are stepping up their efforts to promote the category.

Mrs. Paul's has redirected its marketing to concentrate on its higher-end fish sticks and fillets, said Liz Hanlin, public affairs manager.

"We recently underwent a strategic repositioning where we chose to focus on what we call our 'high-quality traditional products,' which include our Crispy Crunchy fish sticks and fillets, our premium fillets and our batter-dipped fillets and fish sticks," she explained.

"The repositioning is based on consumer research we did that revealed that consumers [prefer] our traditional products, which are made from the whole fillet," Hanlin said, noting that Mrs. Paul's also offers a value-oriented line made from minced fish.

Packaging has been revamped to reflect the new approach. Boxes feature a yellow flag saying, "Made from the whole fillet, the best part of the fish," and have a brighter green color, an updated logo and enhanced food photography.

"It shines a strong quality on that category when you say, 'Made from the whole fillet.' It assures consumers of what kind of seafood you're using," Hanlin said. "And we've found that in that section of our business we are experiencing share gains."

Mrs. Paul's also introduced a whole-fillet batter-dipped fish stick last year, and in the coming weeks it plans to launch a national freestanding insert. "1996 is a big year for us because it's our 50th anniversary. We have an FSI planned and plan to do some consumer and in-store promotion around that," Hanlin said.

A Gorton's spokesman declined to speak with SN, and Van de Kamp's did not return repeated calls.