Make the Case

Merchandisers of frozen and canned fruit and vegetables are facing an uphill climb in the quest for greater market share. With many consumers perceiving fresh and refrigerated produce to be more healthful and of higher quality, frozen and canned marketers have the challenge of changing ingrained shopper attitudes while igniting activity in a relatively mature sector.

Although store brand share is solid — accounting for 64.3 percent and 43.8 percent of frozen fruit and plain vegetable revenues, respectively, and about 30 percent for canned fruits and vegetables — sales growth for many products remains sluggish. (See the table, p. 52.)

Nevertheless, both sectors have ample potential for added activity. In a consumer survey by the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA), 60 percent of respondents listed vegetables as being the top item that draws them to the frozen food aisles, while 25 percent listed fruit.

Packaging is paramount

The key for generating stronger store brand activity is having products that match the packaging and variety of the national brands, and are aggressively marketed by retailers, says Jim Wisner, president of Wisner Marketing Group Inc., a Libertyville, Ill-based food and drug research, education and consulting firm. Indeed, packaging that emphasizes convenience is vital. That includes having canned products with pull tops and frozen bags that are resealable or allow for microwave cooking. Many shoppers view inadequate packaging as a “deal breaker,” Wisner notes.

“Once you lose in packaging, you position the store brand in consumers’ minds as an inferior product,” he states. “Retailers fall down because they are not keeping an eye on packaging.”

Most consumers, he adds, are willing to pay more for cans or packages that are convenient and maintain freshness.

Retailers also could hamper sales by not adequately promoting their store brands. Aggressive marketing of private label frozen and canned produce could generate strong payback because the categories are not heavily supported by the national brands, Wisner states, adding that “store brands have an opportunity to own the category.”

Retailers, he says, should base their spending on the store brand market share they are trying to achieve or maintain. If private label fruit accounts for 40 percent of sales, for instance, 40 percent of category promotions should be for the store brands.

“Merchandisers won’t get or hold a 40 percent share if only 10 percent of marketing activity is for the store brand,” Wisner states. “Many retailers often undermine their own growth.”

Effective marketing elements include messages on bags and cans that highlight the products’ benefits — such as being 100 percent sustainable or Non-GMO Project Verified — and having a longer shelf life than fresh produce. Also effective are featured recipes and details about the producer farms, he notes.

“Too much packaging is generic, but every product has a story that can add value and make it more relevant to customers,” Wisner says.

A local focus

In addition, retailers could offer smaller sizes and selections that are geared to the popular recipes of local ethnic customers, and tie canned goods in with local food pantry drives, Wisner notes.

Another tactic to spotlight store brands is the creation of a “fresh frozen” section in the freezer aisle that contains only private label fruit and vegetables, says Howard Waxman, an independent consultant associated with Packaged Facts, a division of Rockville, Md.-based MarketResearch.com. Waxman says it is essential that retailers offer store brands that meet the recipe demands and tastes of the local customers.

“Shoppers are looking for more variety and exotic flavors, especially with vegetables,” he states. “Store brands have to keep up with what the national brands are doing, but they also have an opportunity to get ahead.”

A major category challenge, he adds, is overcoming shoppers’ perception that frozen and canned items are not as tasty as fresh produce. He suggests that retailers incent consumers to sample the store brands via online coupons.

“Many retailers are adding to the problem by making fresh and even refrigerated products more convenient to shoppers though placement in stores,” Waxman states. “Operators have to make it clearer that frozen items are also very fresh-tasting.”

More supermarkets, meanwhile, are seeking to spur activity by merchandising frozen produce in the larger packages that are commonly found at club stores, says Peter Skolnick, owner of Monterey, Calif.-based Imperial Frozen Foods LLC. Grocers typically sell conventional frozen fruit in 12- to 16-ounce bags, and organic fruit in 8- to 12-ounce packages. Club store bags, meanwhile, frequently are 3 to 6 pounds.

Follow the nationals

While store brand items should be available in varying sizes, Skolnick says retailers still must be conservative in launching new selections. He recommends gauging consumer interest by adding SKUs to the lines of national brands.

“There is nothing wrong with being a ‘me too,’” he says. “The national brands have a lot of money to spend on new items. Let them introduce a product, and then offer it in a store brand if it appears it will be successful.”

Skolnick adds that frozen private label produce also should be merchandised next to the national brands to highlight the price differences. Retailers could further generate attention by offering in-store demos of store brands, including recipes such as smoothies in which the produce is an ingredient.

In addition, N. V. “Skip” Shaw, NFRA president and CEO, recommends that retailers cross-merchandise private brands in displays with elements for a full meal, and also leverage signage that positions the products as healthful snack foods.

“Private label marketers also need to tell stories about their products’ benefits and backgrounds on the package,” he notes. “For frozen, that includes detailing how the freezing process locks in freshness and nutrients at their peak.”

An organic future

Organic berries, Skolnick says, present the greatest growth potential for store brand frozen fruit because there is no dominant national brand, and consumption continues to increase. He cautions, however, that a steady upswing in demand for organic produce could eventually lead to product shortages. It can take several years for farms to become organic certified, and some growers are hesitant to develop organic produce because they fear there won’t be adequate yields to generate profits.

Still, the expansion and popularity of organic produce remains a key sector movement. Imperial’s organic sales have risen 50 percent over the last year, and Matt Maslowski, president and CEO of Mangia Inc., a Mission Viejo, Calif.-based developer of canned tomatoes and beans, notes that organic is the fastest-growing segment of his retail business.

“Today’s consumers are more intelligent when it comes to reading labels,” Maslowski says. “There is a greater call for natural elements. Shoppers want fewer listings in the ingredient statement and clean food in an ecological- or biological-friendly container.”

Tell it like it is

Indeed, Bruce Scheer, director of sales for Sampco Inc., a Chicago-based importer of canned fruits and vegetables, notes that private label merchandisers should “keep pounding out” health-oriented messages because many consumers view canned produce as inferior to fresh offerings.

By emphasizing such elements as being all natural, low in sugar and sodium, and also having a shelf life of two to three years while maintaining 90 percent of the nutrients, retailers will be able to offset negative connotations, he says.

Scheer concurs with Skolnick that private label merchandisers should concentrate on marketing the mainstream varieties of canned fruits and vegetables.

“Many consumers won’t try items that are not proven,” he says. “Store brands should follow the lead of the national brands in the types of products that are offered. But it is important that retailers market good-quality private label items that are at the same level as the national brands.”

And as consumers become comfortable with newer and exotic flavors from national merchandisers, it is crucial that retailers keep pace by launching private label alternatives.

“Millennials and baby boomers are the biggest markets, and they will be interested in products that have different flavors from around the world,” Shaw says. “Merchandisers have to be aware of such trends and to also continue to develop packaging that offers added convenience and contains messaging that emphasizes healthfulness.”

Do invest in packaging that emphasizes convenience.

Don’t overlook the wants and needs of local ethnic shoppers.

Do cross-merchandise frozen and canned produce with other elements of total meal solutions.

Don’t be afraid to test out a new national brand SKU before adding a store brand equivalent.