09Sep2009
Pizza Rises to the Occasion
SPURRED BY DOUBLE-DIGIT gains from both leading brands and private label, supermarket sales of frozen pizza climbed 6.3% to $665.8 million in the 12 weeks ended July 12, according to Information Resources, Inc., the Chicago-based market research firm. Units dipped 1.8% to 219.3 million.
The trend-line in both dollars and units improved over the 12 weeks versus the year as a whole. Dollar volume with merchandising support rose 1.3% to 54.7%.
Kraft’s DiGiorno (http://brands. kraftfoods.com/digiorno) was up 25.7% to $126.6 million, making it the top selling brand in all of frozen foods, according to the IRI data. In the Top 10 brands, double-digit increases were also posted by private label, Tombstone (Kraft) and Tony’s (Schwan’s).
KRAFT
Category growth is being helped by continued interest in single-serve meals, especially for one- and two-person households, says Tim Cofer, president, Kraft Pizza Company (www.kraftfoodscompany. com), Glenview, Ill. Kraft has been promoting with traditional advertising, social media and in-store support.
Among the company’s newer offerings: DiGiorno Crispy Flatbread Pizza, an extra-thin pizza topped with oven-roasted tomatoes, Italian sausage and a blend of Italian-style cheeses; and Flatbread Melts from DiGiorno and California Pizza Kitchen — premium, personalsized microwave meals.
PALERMO’S
Milwaukee-based Palermo Pizza (www.palermospizza.com) has found success with the recent launch of Palermo’s Breakfast Pizza. The company notes that entrees are the fastest-growing segment of the frozen breakfast category, and the new product provide no meat fillers. They’re now sold in Midwest markets with a suggested retail of $4.99. Rising crust pizzas now account for 18.4% of total category dollar sales, according to the company.
The premium ($4 and up) and value segments have been driving growth in the category for the past year, but much of the growth in the value segment has come from consumers switching to private label from mid-tier brands, explains Giacomo Fallucca, President and CEO of Palermo’s. If you remove private label, premium is the segment that has incremental unit growth,” he says. Palermo’s has worked with several retail partners to develop promotions that combine pizza with supporting products to create bundles that increase shopper value. Fallucca suggests that retailers continuously monitor assortment, noting that the category has seen tremendous growth in nontraditional flavors such as Margherita, Goat Cheese, Spinach and Chicken, as well as in higher-end and better-for-you crust types such as ultra-thin and hearth or firedbaked pizzas which deliver a truer pizzeriaexperience.
“Segment the case by price rather than by manufacturer,” he advises. “By separating the value-priced pizzas from the premium quality products, consumers will find it easier to shop the case and be less likely to trade down while in the aisle.”
Here are some other trends identified by Palermo’s marketing team:
—Although pizza household penetration is still highest in households with kids, the average age in the U.S. is increasing and household sizes are decreasing as Baby Boomers age. Accordingly it’s vital to stay current on crust types and flavor varieties preferred by this demographics to keep them shopping the category.
—Single-serve has made impressive gains, but the lion’s share of dollars still comes from 12-inch multiserve pizzas. Shelves need to be set with this in mind.
—The dollar share for unique, higher quality toppings continues to grow as more and more consumers shift from on-premise pizza purchases to home prepared meals.
FSI
Frozen Specialties, Inc., (FSI, www. frozenspecialties.com), the Holland, Ohio-based maker of private label pizzas, recently launched a lean pizza line after “solid success in test,” according to Ric Alvarez, president and CEO. The microwaveable pizzas, made with a brick oven crust in six flavors, have 10 grams or less of fat per serving. “Today’s consumer doesn’t have to sacrifice flavor and good value when they look for foods offering health and wellness,” he says.
Alvarez says that in today’s economy, value has become just as important to shoppers as convenience and quality. He cites a recent report on the category by Chicagobased Mintel, the market research firm. According to Mintel, taste and flavor were two of the most important factors in choosing pizza among a wide cross-section of consumers interviewed.
“Correspondingly, choosing a ‘name’ brand of pizza was a low priority in their decision making process — reflecting the consumer’s understanding of the value of private label brands and their desire to search for the best deals available,” Alvarez says.
He adds that private label has grown substantially faster than the frozen pizza category as a whole (see chart). This growth is coming because shoppers are finding they can get restaurant-quality in private label pizzas, according to Alvarez. More shoppers are being exposed to the product now because it is being promoted aggressively by retailers, he says.
“Nielsen data (13-weeks ended June 27) also reveals that within the private label segment of the frozen pizza category, approximately 50% of the unit volume is focused on single-serve pizzas (i.e. less than 10 oz.), which speaks to lunch at the office, a quick snack, a simple dinner for one — all focusing on convenience, value and quality,” Alvarez points out. .
He urges retailers to drive category awareness and profitability by:
—Promoting various pizza segments at the same time.
—Reducing duplication.
—Promoting the value, quality and convenience of frozen pizza.
—Remaining committed to longterm private brand development.
—Maintaining proper segment space allocation.
LITTLE LADY FOODS
Little Lady Foods (www.littleladyfoods. com), Elk Grove Village, Ill., recently launched a variety of new flatbread sandwiches as well as new flavors of stone-fired pizza as line extensions. The company’s advice to retailers:
—Develop unique offerings alongside the traditional private label strategies to best serve your demographic. Creating customer loyalty has worked for retailers in Europe, where private label can reach 50% of sales.
—Your private label packaging should be convenient and easy to read, with strong bright graphics to attract the shopper and influence the purchase. It must inform and persuade, rather than overwhelm.
—Display private label properly within its category, and set shelves to provide a billboard effect for it. National brands billboard multiple SKUs to create consumer awareness. Doing the same with your store brands helps convey the message that your store brand is top-ofmind and not an afterthought.
“Pizza is way beyond the simple flavors of long ago,” says Peter Cokinos, senior vp of sales and marketing for Little Lady Foods. “In first quarter 2009, foodservice cuisine types of pizza experiencing growth were Californian, Asian, Mediterranean, Indian and German. We are seeing a rise in the single-serve category for pizzas as well as strong interest in grab-and-go enrobed items. These products come in an array of flavors, textures and price points. When grabbing a quick meal, the consumer does not want to sacrifice taste, whether it’s in a restaurant or dining at home.
“Good-for-you items are in demand. People are reading more labels with a broad range of ingredient choices, more callouts of region/ place of origin, greater variety of sauces and toppings. Research also shows that whole wheat crust sales on cheese and vegetable pizzas are way above average,” Cokinos says.
DEEP FOODS
Deep Foods (www.deepfoods.com), Union, N.J., has introduced a line of Naan pizza under the Tandoor Chef brand. Varieties are cilantro pesto, margherita, roasted eggplant and spinach & paneer cheese. The allnatural vegetarian pizzas feature a hand-stretched, artisan crust. They are fired in a clay tandoor oven approaching 1,000 degrees.
