Snag Those Snackers
Although consumption is down in the frozen snack and appetizer segment, retailers could win over new consumers with healthful formulations, new flavor twists and ethnic items.
Whether they are hosting a party or simply taming between-meal hunger pains, many consumers appreciate the heat-and-eat convenience of frozen snacks and appetizers. From zesty Buffalo wings and other standbys to fancier fare such as mini quiches, these folks also are finding a growing assortment from which to choose.
Despite the segment's convenience and variety, however, U.S. consumers appear to be indulging a bit less often than in years past. According to "Frozen Snacks — US," an October 2010 report from the global market research firm Mintel International, we can blame the current economic environment, demographic shifts in the population and rising concerns related to childhood obesity and nutrition.
Approximately 48 percent of American households purchase frozen snacks, Mintel notes. The heaviest users include blacks, young adults, parents and English-speaking Hispanics. More than half (58 percent) of all teens and 64 percent of black teens consume frozen snacks. Mintel notes that marketers should carefully consider these segments when developing new products and messaging in the segment.
Frozen snack users overall are most interested in seeing more healthful versions of products, Mintel says, as well as less costly options.
Flavor twists, ethnic appeal
Keith Chen, president of Toronto-based Culinary Destinations Ltd., advises retailers to look to the value and premium tiers for new product development.
"The mid-range items get lost in the 'me-too' category and do not make a statement to the consumer," he contends.
In addition to convenient, value-priced and better-for-you formulations, today's consumers are seeking quality, consistency and great taste, says Ricardo (Ric) Alvarez, president and CEO of Frozen Specialties Inc., Holland, Ohio. He says the successful national brands already are working to meet these requirements — and store brands must do the same. He adds that FSI's Pizza Bites "easily meet" those requirements.
Speaking of quality, James Johns, business director/assistant vice president for the Processed Food Division of Santa Fe Springs, Calif.-based Day Lee Foods Inc., notes that the technology used in frozen food processing is improving, resulting in higher-quality products across the board.
"It's meeting the demands of the consumer more," he says. "If you don't get repeat business, you're dead."
Frank Benso, vice president of Great American Appetizers, Nampa, Idaho, says a twist on core items also is a segment trend. He points to his company's ovenable/microwavable Macaroni & Cheese Bite as an example.
Frozen ethnic snacks and appetizers represent yet another store brand opportunity, as store brand penetration here is still low, notes Mike Ryan, vice president of sales and marketing for Tandoor Chef/Deep Foods Inc., Union, N.J. In fact, consumers are slightly less intimidated by new frozen snacks and appetizers than they are by new entrées, he adds, making them potential "gateway" foods to new and exotic flavors.
Ryan notes that Tandoor Chef is introducing private label Indian cuisine via familiar snack and appetizer formats — products such as Pizza Samosas and Pocket Sandwiches.
"They appeal to consumers as a familiar snack but add an innovative new twist through exotic flavors," he explains.
Source: The Nielsen Co. Food, drug and mass merchandiser stores, including Walmart, for the 52 weeks ending Oct. 2, 2010 (prepackaged, UPC-coded products only).
Indian fusion is rising in popularity, too, Ryan notes. And Tandoor Chef's consumers have pointed to better-for-you or all-natural ingredients and easier preparation as influencers in their purchasing decisions.
"Realizing this, we made every product microwavable and highlighted product health attributes on pack," he says.
When it comes to ethnic products, Asian dishes are growing faster than any other category right now, Johns says, adding that high quality is important here and that Day-Lee focuses on restaurant-quality Asian items.
Most retailers now offer some form of egg roll or Asian dumplings, says Peter Lee, CEO of Astoria, N.Y.-based Water Lilies Food Inc., another supplier of restaurant-quality Asian appetizers and entrées. But now consumers are clamoring for more authentic and specific Asian cuisine.
"They want, say, a more Korean flavor," he says. "People are more curious."
To help satisfy the demand for new flavors, Water Lilies flexes its creative muscle — combining pork with Napa cabbage, for example, or incorporating shitake mushrooms into dumplings. It also is developing pork and chive pot stickers, Lee says.
Both inside and outside the ethnic space, consumers are gravitating toward "new and different flavors and spices," Alvarez says. That's why FSI introduced two bold new flavors to its Pizza Bites lineup: Nacho Jalapeno Bites and Buffalo Chicken Bites.
Don't drop the ball in product packaging; feature an appealing photo of the prepared snack or appetizer.
Do consider the heaviest frozen snack users when developing new products and messaging in the segment.
Don't be afraid to merchandise frozen snacks and appetizers by ethnicity.
Sitting pretty
The right packaging also is critical to a store brand frozen snack or appetizer. First and foremost, the packaging must protect the product — a particular concern for delicate appetizers, Lee says. But it also must appeal to the appetite.
"Use a design that looks nice on the shelf; make it easy on the eyes," he suggests. "A pretty picture helps."
Johns agrees that store brand snack and appetizer packaging needs to have "vivid visual appeal" to draw shoppers in — photography depicting the prepared snack or appetizer is ideal.
Nudge 'em to nibble
A quality frozen snack or appetizer, in a quality package, makes for a great start. But a little marketing and merchandising magic still is needed to encourage trial.
Benso says the traditional "advertise for volume and merchandise for profit" holds true for the segment.
With the economy still in turmoil, Johns sees a big opportunity for retailers to market their own restaurant-quality products as economical alternatives to restaurant dining/takeout options. Retailers could merchandise their own frozen main dish entrées along with the appetizers, he adds, making it easy for shoppers to find an entire meal.
Education also is a good marketing strategy on the Asian appetizer side, Lee notes. For example, a number of retailers publish a magazine for their shoppers. That magazine could, say, feature Asian entrée recipes, and describe and suggest store brand Asian appetizers that would go well with those recipes.
Of course, the right placement in the freezercase doesn't hurt. Lee advises retailers to avoid the top and bottom of the case.
"Cross-sectioning the product really helps, too," he says. "We work with some companies where, at any given time when I walk through the stores, I see three different placements of our product — and that really helps to drive sales."
For ethnic snacks and appetizers, Johns suggests merchandising by ethnicity — Asian, Italian, etc. — a tactic that is used widely in the center store, but seldom seen in the frozen aisles. To spark additional sales, retailers even could position shelf-stable starches (such as pasta and rice) that go well with certain appetizers nearby.
Facebook and Twitter also present wonderful interactive marketing vehicles for retailers' store brands, Ryan believes.
Finally, Alvarez remains optimistic about the store brand frozen snacks and appetizers segment.
"As consumers continue to be wary of the economic recovery, they will continue to trade down and buy frozen versus eating at restaurants," he says. "With the convenience and value [they] offer, private label frozen snacks and appetizers have strong potential for 2011."
Do market own restaurant-quality snacks and appetizers as economical alternatives to restaurant dining/takeout options.
Top 5 Markets for Frozen Appetizers
- Birmingham/Hoover, Ala., Metro
- Pittsburgh, Pa., Metro
- Louisville/Jefferson County, Ky./Ind., Metro
- Oklahoma City, Okla., Metro
- Rochester, N.Y., Metro
Regions with the largest percentage of people with a tendency to buy store brand frozen appetizers, reported by Core Based Statistical Areas (CBSA) defined by the U.S. Office of Management and Budget.
Source: Buxton Co., Fort Worth, Texas.
