Rethink the Assortment

Whether serving as an easy-to-prepare after-school snack or an elegant precursor to a formal dinner party, today’s frozen snacks and appetizers bring convenience to North American consumers’ busy lives. That convenience factor, no doubt, is one of the drivers behind the category’s high household penetration.

But according to “Frozen Snacks — US,” an April report from global market research firm Mintel, negative perceptions surrounding the segment’s processed nature could put a damper on future growth.

“Concerns about the nutritional value of frozen snacks will continue to be top of mind for consumers, says Amanda Topper, food analyst with Mintel. “Manufacturers will need to reformulate or expand their product offerings, ensuring these items meet consumer preferences for high-quality ingredients and convenient formats. More frequent snacking occasions will also impact product offerings, as well as the retail locations in which these products are sold.”

Consider a makeover

Consumers’ desire for better-for-them and higher-quality frozen snacks and appetizers means retailers might want to rethink store brand formulations here.

“Consumers are looking for higher-quality products and particularly organic and natural items,” says Al Greenwood, vice president, sales for Water Lilies Food Inc., New York. “The frozen department has fallen behind other departments in this regard.”

Anne-Sophie Mommessin, director of sales and marketing for France-headquartered Frial Inc. (with U.S. offices in Menlo Park, Calif.), agrees that healthful and high-quality are on trend, adding that her company has seen several high-end appetizers using ingredients such as kale and spinach introduced to the market recently.

Several category leaders here have let the quality of frozen snack and appetizer items slip so they are able to maintain a price point, notes Ray Gadd, chief marketing officer for Flagship Food Group, North America, Meridian, Idaho.

“The consumer is voting and wants restaurant-quality products that they can eat at home,” he says. “And who better to lead quality [and] this innovation than restaurant brands? Recently, we have seen two restaurants move into this space — Chili’s and Steak ’n Shake.”

Gadd points to Bentonville, Ark.-based Walmart as one retailer that recognized this trend toward restaurant quality in the launch of its own Sam’s Choice brand of appetizers within the United States.

Variety counts

In addition to a better nutritional profile and high quality, today’s consumers want to see more variety in the frozen snack and appetizers section. And that desire for variety also presents an opportunity for retailers to differentiate themselves from their competitors via unique store brand items.

“I think that there needs to be a bigger commitment to building unique items within an assortment,” says Teri Valentine, president and CEO of The Perfect Bite, Glendale, Calif. “It is so tempting to keep with the hot dogs in a blanket, quiches and spanakopita because of strong sales, but those items are available at every store in America,” she says, pointing to potential opportunities in egg rolls with interesting fillings, food truck-inspired items and spanakopita filled with kale and other “new” greens.

If a retailer is able to build trust with consumers based on the quality of more traditional store brand frozen snacks and appetizers, then those consumers likely will be more likely to try another less familiar item, she adds.

“And that SKU may become the destination item that sets the retailer apart from the competition,” Valentine says, “but this process isn’t instantaneous.”

Greenwood seconds the need for variety to meet consumer demand.

“As consumers watch more cable cooking shows, try new restaurants, travel or visit cooking websites, this demand is only going to increase,” he says.

High-quality ethnic items such as Asian snacks and appetizers can help fill the void here, Greenwood says, especially if they also address the shift resulting in snacking overtaking meals when it comes to the number of daily eating occasions.

“Items like spring rolls and dumplings are increasingly popular amongst consumers,” he explains. “We see retailers responding to these trends by developing frozen Asian product platforms — that is, full dedicated sections.”

Mommessin also sees opportunity to add variety through ethnic-inspired appetizer options, and adds Mexican items such as taquitos and European foods such as Arancini bites to the possibilities. And outside of the ethnic arena, downsized versions of traditional North American comfort foods — mac and cheese bites, mini grilled cheese sandwiches, gyro bites and more — also present an on-trend opportunity, she says.

Get ’em to bite

Whether new and improved or totally unique, store brand frozen snacks and appetizers also could benefit from great packaging, merchandising and marketing.

On the packaging front, Mommessin says consumers appreciate options such as steamable bags that facilitate the heating process, as well as formats such as microwavable black trays that allow them to heat and then eat directly from the packaging.

And when it comes to merchandising, cross-merchandising with complementary items can be helpful in building trial, but Valentine also advises retailers to educate consumers to support such efforts.

“In the case of appetizers, it would help shoppers to understand how to use the items to entertain,” she says. “We are seeing some effective blogging to communicate how to throw a party, the combination of products to buy, how much to plan on for each guest, etc.”

In-store demos can help, too, in the marketing efforts for store brand frozen snacks and appetizers, but Mommessin suggest that retailers get even more creative here. From appetizer-themed events with tastings/giveaways (such as the National APPetizer Day Monrovia, Calif.-based Trader Joe’s held earlier this year) to tie-ins with holidays and sports events, retailers have ample opportunity to turn the spotlight on own-brand items.

Yet another inspired merchandising/marketing opportunity is an in-store “to-go” pick-up spot for store brand frozen snacks and appetizers, Gadd says.

“Retailers could create an appetizer end-cap door close to the front of the store where consumers can see their offerings and run in and grab them,” he says.

Don’t wait

For retailers not perfectly positioned to take advantage of the trends toward a wide variety of high-quality, more healthful items — and the growth in snacking occasions — the time to act is now. As Greenwood explains, the trends apply to younger consumers, in particular.

“And that consumer is coming to the frozen department less than previous occasions, so it is important for the frozen department to get this right,” he says.

Above all, be a leader, Mommessin advises retailers.

“Being a follower rather than a leader within this category is one of the biggest mistakes we see,” she says, explaining that her company is able to create innovative custom recipes for each retailer. “That is the best way to differentiate store brand products from your competitors: Sell a product that is unique, that customers can only find at your store.”

Do add better-for-them options and unique items to the frozen snack and appetizer mix.

Don’t skimp on quality to maintain a certain price point.

Do consider Asian and other ethnic profiles in frozen snack and appetizer product development.

Don’t miss the opportunity to engage in creative marketing around events and holidays.