Progressive Grocer Product

WIN 2015

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1 8 Progressive Grocer Products Showcase / Winter 2015 competition in frozen foods as alternative outlets, such as mass merchandisers, supercenters, club stores, even drug stores and convenience stores, build a bigger presence around the freezer. Grocers are feeling more competition for share of frozen food sales, as other channels extend their frozen ranges in an effort to win share of stomach. However, trends show that grocers still have the opportunity to win by positioning frozen more effectively, a task made easier by the large space and merchandising and marketing opportunities in a traditional store vs. a smaller alternative outlet. In particular, grocers can expand the breadth of healthy options in the freezer. Packaging also plays a big role, as shoppers value products that allow for portioning and easy, quick preparation, such as the steam- in-the-bag technology, which seems to have revolutionized frozen veggies. Fun in Frozen… treats! According to London- and Chicago-based Mintel, ice cream and frozen novelties "eked out" dollar sales growth of 10 percent from 2010-2015. Trends highlighted in the firm's Ice Cream and Frozen Novelties U.S., July 2015, report point again to a focus on health, even when it comes to frozen treats. The firm reports that while the mature category remains popular, frozen alternatives such as yogurt/dairy alternatives is where the category has grown, though recently the products seem to be "falling from grace," the report states. Certainly shoppers want to indulge, but like many categories across the store and within the frozen case, products with healthy profiles garner attention. "While indulgence plays a big role in category participation, boosting the perception of health and encouraging responsible consumption will play a role in preventing sales declines," the Mintel report advises. A number of factors can come into play in building the image of frozen treats, Mintel reports. "Low-in" claims have proven not to have great appeal, rather a focus on quality can help boost health perceptions. Value-added ingredients and processing — locally sourced ingredients, healthy mix-ins, dairy alternatives, etc. – capture consumer attention and have proven successful in other indulgent segments. The promotion of indulgence in moderations through packaging/serving-size options also help guide consumers to controlled consumption. Merchandising Matters Frozen prepared foods account for the largest share of promotions, accounting for 37 percent of all frozen promotions, according to Market Track, Chicago. Notably, frozen breakfast only accounts for 6 percent of the frozen category, but Kellogg's Eggo waffles were still the most promoted item in all of frozen. With an increase of 264 promotions year-over-year, Kellogg's Eggo Waffles was the most promoted frozen item in this past year, according to the firm's promotion tracking. In ice cream, Breyer 's Ice Cream promotional strategy was unique. The product was seen on premium pages 60 percent of the time, which is significantly more than the rest of the top 10 promoted frozen products. Premium page placement has proven to improve effectiveness of promotions. Strategies for promotion focused on price points, as frozen items were seen with a price point only in 53 percent of total promotions last year, and were only seen with BOGO offers 3 percent of the time. PGPS REFRIGERATED & FROZEN Source: Market Track, Chicago, promotional data 2015 37.6% Frozen Prepared Food, Ice Cream Novelties, 8.4% Frozen Pizza, 9.0% Ice Cream/ Frozen Yogurt, 10.7% Frozen Breakfast, 5.9% Frozen Fruit, 2.1% Frozen Juice, 0.6% Frozen Corn Dogs, 0.8% Frozen Meatless, 1.2% Frozen Vegetables, 8.2% Frozen Baked Goods/Desserts, 8.2% Frozen Meat, 7.2% Sub-Category Share of Promotions Source: Market Track, Chicago, promotional data 2015 Offer Tactics Share of Promotions 53.5% Price Point, X-For, Save $X, 4.3% BOGO, 3.2% Save X%, 0.5% Other, 0.4% 38.1%

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