Not Just Peas In A Pod
The produce department might be a bit more colorful and inviting than the canned-good and frozen aisles, but any superiority complex on its part likely is unfounded. After all, it's hard to beat the convenience of canned and frozen fruit and vegetables. What's more, both the FDA and the International Food Information Council (IFIC) say these foods boast a nutrient profile that's generally equivalent to their fresh counterparts.
And with the exception of canned fruit, these items enjoyed decent dollar and unit sales growth during the past year. Frozen fruit performed particularly well, with the total category posting 5.4 percent and 6.0 percent increases in dollar and unit sales, respectively, during the 52 weeks ending July 10 (food, drug and mass merchandiser stores, including Walmart, according to The Nielsen Co., New York). Dollar and unit sales of private label frozen fruit outperformed the total category — both jumped 6.2 percent.
New store brand launches also were plentiful, accounting for almost 50 percent of all new product introductions within the segment in 2009, according to Lynn Dornblaser, leading new product expert for the global market intelligence firm Mintel International. That figure is much higher than it was in 2005 (25 percent), she notes, and significantly higher than it was for new store brand introductions overall in 2009 (25 percent).
"However, it should be noted that private label activity is quite different in frozen/ canned fruits and vegetables than in products as a whole," Dornblaser says. "This category [is] much more likely to see low-cost alternatives and a focus on value rather than varieties that offer unique points of difference."
Dare to be different
That said, differentiation might be a prerequisite for continued store brand growth in the years to come.
"Most private brands have been imitators versus innovators," says Bobby D. Ray, senior vice president of retail sales and marketing for Allens Inc. of Siloam Springs, Ark. "Allens is encouraging our customers to step out of the box and add new items that they may have not seen from the national brands."
Dornblaser agrees, stressing that some of the best opportunities for store brands lie in unique "destination-type" products that go beyond value-priced options.
"I would recommend looking to activity in sauces or frozen pizza or even some frozen meals for ideas of how to expand outside just offering the value choice or the product that imitates the leading national brand," she says. "The Supervalu family of stores, for example, has a great line called Culinary Circle which does not imitate anything — the products are designed as unique offerings."
Dave Allen, vice president of retail frozen food sales for Manitowoc, Wis.-based Lakeside Foods, also sees strong growth ahead for new fruit and veggie items that feature whole grains and low sodium levels, as well as offer clean ingredient statements. Such attributes mesh well with the current challenges around high obesity levels and heightened consumer interest in nutrition. And in the vegetable category, he says his company also is seeing interest in fire-roasted offerings.
"Customers that truly embrace innovation across all departments, from the senior management level to the buyer level, have enjoyed far greater success with new items," he adds. "Lakeside Foods' marketing department has the tools and commitment to help retailers be more aware of recent consumer/ product trends."
Of course, innovation alone — without an eye toward quality — simply won't do. But high store brand quality, offered at a competitive price, stands to augment an existing selection of national and regional brand fruit and vegetable items.
"If a retailer has the right quality at the right price, there should be no reluctance to keep the other [national and regional] brands on the shelves," Ray maintains. "In the end, consumer selection is and always has been what it's about."
Don't forget about quality in the quest for innovation.
Do consider offering some unique "destination-type" products that go beyond value-priced options.
Do consider packaging improvements that catch the shopper's eye and/or enhance overall convenience.
The quest for innovation and quality should not end with the product. Retailers that want to breathe new life into tired own-brand fruit and veggie offerings might also want to take a second look at packaging.
Dornblaser challenges retailers to ask questions when looking for economical ways to make their store brands stand out on the shelf.
"For shelf-stable, can the Tetra Recart package (a squared-off aseptic carton) provide that point of differentiation?" she asks. "For frozen, [are] flat bags the best way to go? What about stand-up pouches or something different, especially for more premium-positioned lines?"
Consumers appreciate convenience-minded packaging enhancements as well. To up the convenience quotient on the canned side, Allen notes, Lakeside Foods now makes an easy-open lid available to retailer customers. And the company also continues to offer stackable cans for easy merchandising within the store.
"The stackable can allows cans to 'lock' into place when stacked upon one another," he explains, "thereby reducing store labor."
And on the frozen side, Lakeside Foods launched a stand-up steamable bag, which Allen says has driven incremental volume within the category.
Ray, borrowing from a statement made by an executive with the Packaging Machinery Manufacturers Institute, says the system innovations that are most highly valued are those that remove cost, improve/streamline manufacturing and distribution, meet the retailer's needs, and meet or exceed the consumer's performance expectations.
"This is why packaging is an important part of building canned and frozen vegetable sales," he says. "For instance, the technology behind Allens' SteamSupreme private brand line, microwave cooking right in the bag, affords consumers more time at the dinner table with family as opposed to in the kitchen."
Don't communicate a brand promise on which you cannot deliver.
Get the word out
No matter how innovative the fruit or on-trend the veggie, shoppers must notice it and "understand" it before they will be willing to buy it. So retailers need to do their part in communicating the right message.
Dornblaser believes retailers have the opportunity to promote value and quality — along with the "convenience of always being on the shelf at home" — within the canned fruit and vegetable segment. And because consumers see "freshness" as a key product attribute for fruit and vegetable items, retailers could use the concept of "freshly frozen" as a way to talk about their frozen offerings.
"This might be particularly effective for fruits and vegetables that are out of season or are not easily obtained in some parts of the country," she adds. "Look what the seafood industry has done to convey the 'freshness' of frozen seafood."
Retailers also could take advantage of National Frozen Food Month, Ray says, to promote their frozen fruit and vegetable items. Now held in March, which historically was the worst month for frozen food sales, the event is one of several annual promotions from the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA).
"This year, NFRA has added a special effort to include store brands in this promotion," Ray notes. "Astoundingly, both national brands and store brands grew in March this year!"
He adds that the Canned Food Alliance of Pittsburgh offers a similar program in its annual Canned Food Month (held in February).
Finally, Dornblaser stresses that retailers need to ensure their products truly deliver on any promises made.
"If it is a value positioning, the price must be right," she says. "If it is about superior flavor or a unique experience or what have you, the product must deliver. If it does not, consumers will turn to another brand."
Because consumers see "freshness" as a key product attribute for fruit and vegetable items, retailers could use the concept of "freshly frozen" as a way to talk about their frozen offerings.
A number of recent store brand frozen and canned fruit and vegetable introductions flaunt formulation and/or packaging spins that mesh well with today's consumer demands. A sampling includes:
• H-E-B French Style Green Beans with No Salt Added from San Antonio-based H-E-B. The beans come in a 14-1/2 ounce can.
• Kroger Recipe Beginnings Mirepoix Cajun Style Blend from Cincinnati-based Kroger. The all-natural frozen blend of onions, celery and green peppers is said to be ideal for classic recipes such as gumbo, jambalaya, soups and stews and retails in a 12-ounce easy-to-open pack.
• Mandarin Oranges in Light Syrup and Pears in Applesauce from Raley's Fine Foods of West Sacramento, Calif. The products are sold in cartons containing four convenience-minded 4-ounce plastic cups.
• Wegmans Special Blends Grilled Vegetables from Wegmans Food Markets of Rochester, N.Y. The frozen item is said to include fire-roasted eggplant, zucchini, red and yellow bell peppers and squash. It comes in a 16-ounce stand-up pouch.
Source: Mintel's Global New Products Database.
Top 5 Markets for Tomato Paste/Sauce
- Pittsburgh, Pa., Metro
- Tulsa, Okla., Metro
- Grand Rapids, Wyoming, Mich., Metro
- Allentown, Bethlehem, Easton, Pa., Metro
- Albany, Schenectady, Troy, N.Y., Metro
Regions with the largest percentage of people with a tendency to buy store brand tomato paste/tomato sauce, reported by Core Based Statistical Areas (CBSA) defined by the U.S. Office of Management and Budget.
Source: Buxton Co., Fort Worth, Texas.