Health consciousness? Cafe/restaurant styling? Pardon me, I thought I was in the frozen foods section! You are, says John Corbett of New Zealand’s Grocers’ Review. Frozen foods are really cool now…
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Do you remember your Mum nagging you about eating properly when you left home? One of her cautions concerned frozen foods: she knew they were quick and easy to prepare but they didn’t deliver the nutritional value that fresh, home-cooked vegetables did. Of course, we all know now that modern production techniques lock in nutrients and that many frozen foods contain the same, or higher, levels of Vitamin C as fresh – but old guilt complexes die hard. Which is why one of the strongest consumer drivers in the frozen food category today is health. Modern consumers want to cut as many corners as they can when preparing everyday meals – but it’s still hard to shake off a nagging feeling that Mum’s looking over your shoulder.
Regardless, sales of frozen foods across all categories continue to climb, with AC Nielsen Homescan data revealing that 50% of New Zealand households purchased at least one frozen meal last year, with an average purchase of 10.2 packs per household per year. Sales of frozen complete meals posted a vigorous 18.7% MAT growth in the year to 19 May 2002*, with dollar values climbing from NZ$28.4m (US$) to NZ$33.7m. Within the category, snacks posted an impressive 24.1% MAT growth – and so-called ‘kiwi meals’ a whopping 26%.
“The strongest growth we notice in the category is coming from Meals and Burgers, satisfying the needs of time-starved consumers,” says Heinz Wattie marketer Ross Finer. And among the strongest performers is the ‘kiwi meals’ segment, comprising traditional meat and vegetables, shepherds pie and roasts.
“This is where heartland Wattie’s lies and Wattie’s Roasts are up 40%, Wattie’s Meals up 42% and Wattie’s Steakhouse Burgers are the number one SKU in the fast-growing frozen burger market,” says Finer.
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By GlobalDataGoodman Fielder, whose portfolio in the frozen category comprises frozen pies, pizza, ready meals and snacks, also reports good growth in Meals.
“We’ve had 6.9% value growth over the past year in this category, which is represented with the range of Irvines SuperSnack and Easy to Serve meals that were relaunched last year from the Ernest Adams brand, “ says Jo Noonan, Marketing Manager, Heat and Eat Category. “This included the launch of three new variants to the range – Thai Chicken Curry, Spaghetti Bolognaise and Butter Chicken. The biggest sellers in the range are Shepherds Pie, Macaroni Cheese & Lasagne.”
Stressing the nutritional content
To a large extent, the growth of frozen meals is a classic example of replacement: convince consumers that the product is as nutritious as fresh food and the big convenience factor will do the rest. Almost all consumer trends point to this growth continuing, especially since 2001 Census data reveals that 84% of homes now have a microwave oven and most employees have access to a microwave at work. Marketers such as Charlotte Walker at Effem Foods, whose recently-launched 7-SKU Dolmio Frozen range gained 7.1% market share in just seven weeks (AC Nielsen, 21 April 2002), see strong parallels in New Zealand with the UK market.
“The frozen ready meals sector there is really large,” she says. “There’s a big consumer trend towards convenience meals that are quick and easy to cook, yet still have nutritional value.”
Richmond Ltd recently entered the branded frozen food category with their “Bite Me” range of Big Tasty Beef Burgers and Marvellous Meat Balls. Within three months the new products achieved 6% market share by value, according to the latest AC Nielsen data.
Richmond’s NZ division manager, Jenny Myers, says the current sales figures represent a positive outcome for a company making its entry into the branded fast moving consumer goods arena.
“Bite Me” is not just pre-cooked food with a cheeky ‘attitude’, but also flaunts the National Heart Foundation Health Tick, and is the only meatball product to do so. Obviously this kind of endorsement positions healthy alternatives extremely well within an increasing brood of health conscious fanatics, who do not only want to be assured that the food they’re purchasing is healthy, but that it’s convenient and easy to prepare too. “Bite Me” packs yet another healthy punch in this department in that they are packaged in user-friendly free-flow packs, which can be re-sealed, if necessary. And whichever way your customers choose to prepare “Bite Me” meals, they’re ready to devour in minutes.
“More and more food nutritionists are also urging people to cook meat products straight from the freezer, as they believe meat loses much of its nutritional value when defrosted over long periods of time in a refrigerator or on a benchtop.”
Companies such as Hamilton-based Aria Farm have earned international critical acclaim and good profits by tapping into this trend. Already well known for its range of beef, lamb, chicken and pork chips, Aria Farm’s free flow Ezy Mince was recently voted the most innovative meat product to emerge in New Zealand during the last 12 months.
“Our main aim at Aria Farm is to create food that is not only quick to cook, as we know people are time-poor, but healthy as well,” says director Anna Arendt. “Our research shows that the person cooking the family meal still likes to have the satisfaction of preparing and serving the meal, even if it isn’t started from scratch.”
Aria Farm’s newest initiative is Quick Meals, a multi-level marketing campaign involving TV, magazine, web-site and in-store recipes. “Quick Meals is a showcase for FMCG products designed to drive sales,” says Arendt. “It includes a Quick Meals Challenge using a stop watch to demonstrate how quickly a meal can be cooked by a family. Quick Meals taps into parents’ desire to give their family healthy food – and challenges them not to fall into ‘the takeaway trap’. Children are also encouraged to help with the cooking and have the opportunity to enter a competition to appear on the advertisements.”
Family meals
Recognition of time pressures is also behind the launch of Simplot’s three Create-a-Meal products. which allow a family meal to be prepared in 15 minutes by adding beef or chicken to a ready-made stir fry sauce such as Teriyaki or Spicy Asian.
“The quality of these offerings has won ready acceptance for Create-a-Meal,” says Simplot’s NZ general manager Richard Harold. “The cut and the crisp ‘snap’ of the vegetables and the flavour profile of the sauces delivers a delicious stir fry meal in minutes. We’ve backed Create-a-Meal with TV support, but the instore tastings have really proved to shoppers that new era frozen foods can really deliver on taste and texture,” he says.
Mums and many other consumers have also responded well to Simplot’s relaunch of the venerable Birds Eye frozen food brand from late 2001. “The Birds Eye brand was a key player in the foundation of the retail freezer category back in the 1950s, both around the world and here in NZ and it’s proved a real winner,” says Harold. “ Amazingly, the brand’s return seemed to trigger fond childhood memories for many shoppers and that really helped ignite quick trial of our new products.”
These include Golden Crunch frozen oven fries, which quickly achieved a number four ranking by value in the 45-SKU frozen fries segment of the market by March quarter 2002, and a 13% share (Aztec Scan Data). In partnership with long-term distributor International Fine Foods, Simplot has now introduced 11 SKUs, including four vegetable snacks such as Bubble ‘n Squeak.
While replacing a home-cooked meal with a healthy frozen equivalent is now a routine choice for many consumers, that doesn’t mean that it’s always a simple one. “New Zealanders like to have a relatively high degree of involvement in the preparation of meals eaten at home,” says Jason Cate, account manager at the Acumen Business Research division of NFO NZ. “They’re happy to work with pre-prepared ingredients and as many as 50% do, but they still want to have personal input into creating the meal. That’s especially true for Mums.”
Increasingly sophisticated
The other big development taking place is that New Zealanders are becoming steadily more sophisticated in their eating habits and are willing to try an increasing variety of cuisines. Much of this of course has been influenced by innovations in the cafe and hospitality sector, which consumers then like to experience and experiment further with at home. Top Hat’s Aashiayana brand of frozen Indian style meals, for instance, offers a choice of no less than 11 authentic North Indian curries, two classic Thai cuisine products, a three-SKU Aashiayana Thali range of authentic Indian meals for one and two frozen 230g Rogan Josh and Butter Chicken pies.
Top Hat’s successful reading of the meals market also lay behind the introduction last year of the Hungry? range of 500g convenience meals, featuring eight SKUs as varied as Beef Goulash, Smoked Chicken Lasagne, Beef Stroganoff, Pumpkin Pie, Creamy Tomato Chicken Fettuccine, Lamb Stew, Vegetable Hot Pot and Coq au Vin. To this lineup, which Top Hat Product Manager Mark Darling reports as having scored rocketing MAT dollar growth of 93.3%, Hungry? added a seven-SKU range of frozen single serve microwave snacks under the Toppers branding – which took the first six out of the top ten rankings for dollar sales in the single serve segment. The company’s Golden Choice brand provides a range of four vegetable croquettes and a vegetarian burger.
In similar fashion, Delking has built a nationwide niche specialising in the supply of frozen, retail-packed prawns and a steadily-expanding range of calamari, squid tubes, mussels and accompanying sauces. MD Michael Delmont attributes much of the company’s success, which now embraces six Auckland retail outlets and a nationwide – and soon to be enhanced – presence in supermarkets, to a steady focus on the company’s speciality lines. “NZ consumers are becoming steadily more educated and confident about preparing and cooking seafood,” he says, “and as that process increases, the number of customers and their loyalty naturally grows.” Delking’s signature lines of Garlic prawns and Sweet Chilli Prawns are keyed closely to ‘traditional’ NZ tastes,” Delmont says.
Even chicken, that most ubiquitous of dinner and snack foods, has joined the ranks of frozen food innovators in recent times. Whole birds still make up around 50% of total frozen chicken sales, says number one rank holder Tegel Foods – indicating that Kiwis still love their traditional roast chicken dinners – but lately, the real action has been in the Portions (Tegel’s 2kg packs are the number one selling SKU in the freezer, ranking 13th in total grocery), and Further Processed segments.
Tegel Foods marketer Melissa Butler reports that sales of Tegel’s 5kg portions packs increased by 52% over the previous year and free flow breast fillets and tenderloins posted 20% growth over the previous year. In the highly convenience-oriented Further Processed segment, in which chicken nuggets represent nearly 50% of the volume sold, Tegel increased its volume sales by 8% over the last year. The launch of three new products – Bites, Chick Sticks and Cheesy Nuggets – in the last two years has produced growth of 24% over the last 12 months – the same amount as coated added value products such as Tegel’s Southern Style and Chinese Honey portions and nibbles. “These products can be cooked from frozen and require no preparation. They’re perfect for consumers with busy lives and because chicken is a family favourite are becoming more and more popular to have on hand in the freezer,” says Butler.
More adult-orientated
Another area of growth in the added value segment are products which generally could be considered more adult-oriented. Tegel’s three 2002 entries: Filled & Crumbed Ham & Cheese breast fillets, Apricot filled & crumbed breast fillets and Chicken & Cheese Schnitzels are aimed at consumers who want higher value, convenient chicken meal solutions. The breast fillets cook from frozen in under 50 minutes. The chicken & cheese schnitzels, says Butler, are great for the whole family as part of a meal or for after school snacks.
“In the future, consumers will be more and more interested in convenient, nutritious products that will make their life easier. Products which will allow them to spend more time on the things they believe are important, and this is where Tegel will be focussing much of it’s new product development resources,” she says.
Dominating desserts
At the dessert end of the meal experience, Sara Lee has found that constant innovation, either in the form of new flavour variants or entirely new concepts, is the key to maintaining an impressive domination of many dessert segments, including cheesecakes, dairy desserts, fruit pies, danishes, crumbles, cakes and puddings and other pastry desserts. Not content with a 45.4% share of the NZ$16.6m total frozen desserts category, 66.7% of Cakes & Puddings, 88.4% of danishes and 99.1% of crumbles (total key accounts, MAT to 19 May 2002), Sara Lee launched no fewer than seven new products across as many segments between December 2000 and January 2002, as well as relaunching 10 SKUs of Sara Lee Ice Creams in September 2001 to enter the steadily growing Super Premium Ice Cream sub-category.
Sara Lee Bites, launched in February 2000, was a particularly astute new product innovation, says brand manager Andrea Cheung. Blending no less than three key consumer directions – indulgence, convenience and health-conscious portion control – into a single dessert, they offer consumers the convenience of individually wrapped indulgent mini-desserts. The original chocolate-covered Bavarian Cream-filled products have recently been extended into chocolate-covered cake filled variants and the new Baked Bites marketed as ‘the indulgent mini desserts that can be eaten straight from the freezer’.
A further extension from the café/restaurant dessert scene are Fudge Brownie and Baked Cheesecake Bites, whose flavours have been made more indulgent by smothering them in chocolate and wrapping them individually. Sara Lee Honeycomb Scoopalicious was launched into the Frozen Desserts category in August 2001. The product was developed to target children, as a family dessert consisting of ‘layers of delicious fun’ – a chocolate biscuit base topped with layers of honeycomb & chocolate mousse, enriched with cookie pieces and finally, flakes of chocolate.
“Sales of Scoopalicious have taken the Frozen Desserts category by storm,” says Cheung, “ as it appeals to children both young and old. In MAT terms its success has been phenomenal, achieving a 6.2% share of the Other Dairy Desserts sub-segment and competing against old favourites such as Sara Lee Bavarians, Viennetta and ice cream birthday cakes.”
“We see the total category continuing to grow as frozen product offerings continue to improve in quality, taste and innovation,” Cheung continues. “It has now become more appropriate for busy consumers to indulge in frozen desserts such as the Sara Lee Baked New York Cheesecake, that would traditionally have been baked at home or eaten as an end-of-meal treat when dining out, but now they can be found conveniently in supermarket freezers.”
And while Cheung anticipates that niche target marketing with products such as Sara Lee Bites and Scoopalicious will continue and traditional desserts such as Fruit Pies, Cheesecakes and Danish will continue to dominate the category, she also predicts that light options of traditional desserts will become steadily more popular as consumers become more aware of healthy living and prefer that convenience foods follow trends towards lower fat and sugar content.
New complexities for marketers
All of which, says Jo Noonan at Goodman Fielder, involves a new level of complexity for frozen food marketers. As ranges continue to expand and extend to meet increasingly sophisticated and demanding consumer tastes, planning and new product activity needs to be individually tailored to effectively identify the different drivers which operate for each consumer target group. Careful attention also needs to be given to fickle consumer palates – sometimes a difficult job in a small domestic market which can make it difficult for new product introductions to achieve sales levels that are viable for both retailers and manufacturers. Marketing frozen foods now calls for careful management in every aspect.
“The chilled and frozen areas are very expensive pieces of real estate instore and with the explosion of new products coming into the market, there is a requirement for brand owners and manufacturers to clearly identify the market requirement before introducing new products. Quite simply, the categories cannot afford to have non-performers taking up valuable retail space,” says Tony Trilford, MD of Wellington-based food brokerage and frozen and chilled specialist Rothford International Ltd. Rothford’s client list includes Angel Bay frozen burger products, Movenpick ice cream, Brinks frozen chicken, Jewel of India frozen convenience meals, Kingfisher frozen seafood and Ocean Fresh Seafoods.
“Too many products at times are vying for too little chiller and freezer space and the inevitable outcome is that retailers are forced to continually restructure their ranges, which leads to deletions and reclassifications of products. It’s in the interests of the supplier and the trade that a professional and well-researched approach to introducing new products is undertaken. Many excellent products have failed in the market due to a lack of adequate promotional support or nursemaiding in the early stages of a product’s life cycle and/or a lack of in-market support as time goes on,” he says.
“New products commonly replace existing products that have been on shelf for years and are seen to be in decline due to inadequate support. It could be argued that new products are a higher risk for the category as they are unproven, so the benefit of having a clearly defined selling advantage and ongoing support plan that includes optimum shelf facings and monitoring of market trends and competitive challenges is obvious. Without it, products do not remain on the shelf for long.”
And when a category plateaus – as frozen Indian meals appear to have done (it actually declined by 4.7% MAT in the year to 19 May 2002) it’s time to look around, sometimes at short notice, for the next thing. Having recently helped launch the Dolmio Frozen Bowl range for Effem Foods – who also handle Kan Tong sauces and mixes – Charlotte Walker now thinks there is a strong need in the market for a range of Asian cuisine frozen meals.
Predicting eating patterns
Putting a new frozen food product out is one thing, but predicting how today’s increasingly empowered consumers will adopt it is quite another. One further interesting complication is that time-starved consumers are developing new eating patterns, such as eating on the run and using ‘traditional’ products in non-traditional ways.
“One of the key characteristics now is the occasion,” says Jo Noonan. “This is a major driver since Kiwis now use pies, pizzas, meals and snacks over a wide variety of occasions, whether purchasing them to eat later or preparing them immediately to satisfy an immediate need. It’s part of a whole raft of other things going on, including a trend towards solitary dining and an overall decline in cooking skills.”
Today’s new era of non-traditional use fortunately creates as many opportunities as problems. Nimble firms such as Auckland-based Purity Foods, which makes Big Ben, the current market leader in single-serve microwave meat pies (with a healthy 42% market share as at 19 May 2002, total key accounts) have been quick to capitalise on the trend towards consumers seeking convenient, ready-to-consume products. “In addition to our eight Big Ben variants, our other frozen products – Mrs Quick Deep Dish Pies, Mrs Quick Family Pies and Puff Pastry Sheets – are all showing growth higher than that of the total frozen category.” says GM Gordon Cameron. “We’re growing at 6.3% in value share and 4.2% in volume share compared to total category growth of 2.0% value and -1.1% volume (MAT to 16 June, total key accounts). And of course for the other products there’s a broader drive for ready to consume and convenient to use products.”
Pukekohe-based Franklin Foods has likewise proved adept at keeping in step with consumer tastes. “Franklin Foods has a long history stemming back to the Boxed Chops era of 20 years ago in the time of the lamb surplus. From these early days, product progressed to the current BB Grillers and Andrew Corbett Beef Patties,” says sales director Andrew Van Der Werff. “With many households gratefully accepting the advent of the microwave oven, it was only a matter of time until specialty foods were being marketed for fast and convenient use. Our progression came as a result of this and our burgers have now been developed to include cooked lines that only require a reheat in the microwave.”
Franklin Foods continues to develop new lines in both patties and crumbed products for the domestic and international markets. “Our BB Grillers and Andrew Corbett Beef Patties maintain a strong presence in the category with our BB Griller 10’s now featuring in the top two places by value,” says Van Der Werff.
Van Der Werff predicts that more and more product will appear as cooked items, especially in the light of ever-strengthening international food hygiene standards. “Yes, this presents compliance issues for manufacturers but the added convenience for customers and enhanced food safety is a good thing for consumers. The flow on effect is greater quality assurance in the standard of NZ meat products.” Likewise, he sees the new initiative of complete nutritional labelling as beneficial for consumers in the long run as it gives them greater knowledge of what they are purchasing.
Growth rate projected
Consumer knowledge, linked with a desire for maximum convenience and a seemingly insatiable interest in new tastes, are now the key driving forces in the frozen foods category. Companies such as Turkish Kitchen, whose frozen range sales have grown 30% over the last 10 months and are projected to have a similar growth rate over the next six months, believe they can see the way forward.
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“Health will be the driving force in the future for NZ consumers as well as global consumers,” says MD Luciell McIlroy. “Our philosophy is to offer healthy and authentic food. We believe that the growing awareness of what we put into our bodies will eventually overtake the lower price, lower food quality products that have become popular recently.”
Turkish Kitchen’s frozen range is designed to be a complete meal solution for both busy people and those who wish to entertain friends and family.
For New Zealanders not familiar with Turkish cuisine, the company’s 500g meals such as Pilaki (Harricot Beans & Mushrooms), Guvech (Lamb & Eggplant), IzMir Kofte (Spicy lamb & beef meatballs) and Kuru Fasulya (Harricot beans & lamb) offer culinary explorations of the type that many now actively seek. Other product lines include Boreks, a Spinach & Potato Filo Pastry Product; 400g Frozen Soups in SKUs of Lentil & Carrots, Spinach & Mushrooms and Spicy Tomato; and Baklava Dessert.
A further right-on-the-consumer-button element is that Turkish Kitchen’s frozen meals and soups are low fat and gluten free. “With the growing number of people who cannot tolerate gluten, we have made a conscious decision to provide our consumers with gluten free meals.
We believe consumers are choosing our products because they are authentic, and also because we offer a range of top quality vegetarian meals.” says McIlroy.
*Figure supplied courtesy of ACNielsen. All figures quoted in this article are ACNielsen unless otherwise specified.
By John Corbett of Grocers’ Review
