Wake-Up Call
Retailers need to beef up innovation, variety and packaging graphics to compete within the ultra-competitive frozen breakfast category.
At the crack of dawn, consumers often have too little time and too much on their still-sleepy minds to prepare breakfast from scratch. As a result, convenience and quality rule.
Maybe that's why handheld frozen breakfast foods have performed so well in recent years. Within this segment, the major players are using turkey sausage and other more healthful components to layer nutrition on convenience and drive sales, notes Shannon Brown, an analyst with the Packaged Facts division of Rockville, Md.-based MarketResearch.com.
In more traditional frozen breakfast areas such as waffles, Brown notes that pricing is a big opportunity for private label producers.
"But if they can match the healthy ingredients and unique flavors such as breakfast fruit pizzas that [Kellogg's] Eggo came out with … that's where they can try to gain more traction in this market."
She adds, "I also believe there is a niche out there for store brand manufacturers to produce healthier kid-friendly breakfast items that aren't so sugary and sweet."
Corey Henry, vice president of communications for the McLean, Va.-based American Frozen Food Institute (AFFI), agrees.
"Waffles may now have more whole wheat in them," he suggests as an example.
►Do consider handheld frozen breakfast products that incorporate turkey sausage or other healthful components to provide both convenience and nutrition.
Offer variety
By taking a tiered approach to this category, retailers could draw more attention from consumers, according to David Browne, senior analyst at global market research firm Mintel International. For example, retailers could offer a hearty, value-driven alternative, as well as a competitively priced natural or organic one, to bolster store brand share.
Don't forget about children — kid-friendly frozen breakfast items that go easy on the sugar will appease kids and parents alike.
"The big companies are taking this approach where they now offer egg whites and lower-sodium and lower-calorie options, yet they offer the very decadent breakfast foods that are made from croissants and cheese and are full of fat," he says.
Some private label producers are doing the same, offering retailers everything from breakfast bowls, skillets and conventional breakfast meat-egg-and-cheese sandwiches to mini-breakfast sandwiches on biscuits and croissants as the breakfast category diversifies, according to Peter Kroner, national sales director, Quality Driven Custom Packaging (QDCP), North Charleroi, Pa.
"The evolution of sales toward breakfast sandwiches, breakfast bowls, skillet entrees and egg substitutes and away from waffles, pancakes and French toast over the last few years has been phenomenal," Kroner says.
Although consumer spending has shifted in this category, Kroner adds, many retailers have not adjusted their product mix to reflect the new reality.
"Many of our retailer partners still commit a disproportionate amount of shelf space to the waffles, pancakes and French toast categories," he says. "We believe retailers should set their store schematics to favor this change in consumer demand and buying habits to ensure they maximize the sales opportunities and profit potential offered in the frozen breakfast category."
►Do treat portion control and better-for-you foods as an added benefit.
Just the spoon, please
That expanded variety on the frozen breakfast side now even includes health-minded oatmeal. Lee Rankin, director of sales for Wawona Frozen Foods, Clovis, Calif., notes that her company offers a frozen oatmeal for private labeling that is topped with fruit, includes a touch of brown sugar and cinnamon, and is packaged in portion-controlled cups.
"The consumer just has to microwave the cup to heat and stir, and it's ready to eat," she says. "All you need is a spoon. No bowl, no water to measure, no messy packets."
The challenge, Rankin adds, is to remain focused on convenience and energy, and treat portion control and better-for-you foods as an added benefit.
"Everyone talks about eating healthy, but it seems that consumers are looking for more convenient and grab-and-go products to start their day," she explains.
"A few years ago, fast-food restaurants added breakfast items to their menus to capitalize on consumer demand for quick grab-and-go breakfast items," she adds, "and just recently, they have added more healthy additions like oatmeal."
QSR's competitive wildcard
Competition from quick-service restaurants such as McDonald's, Burger King and Subway presents a huge challenge for retailers aiming to grow the frozen breakfast segment, Mintel's Browne notes.
In many cases, breakfast burritos and sausage biscuits can be found on the dollar menu.
"Nutrition plays a big role," Browne says. "In restaurants, it's not always easy to see all of the ingredients, and people can tune out the nutritional aspects."
Private label producers, therefore, should play up all-natural, preservative-free and other health claims on packaging, he says.
Closer to home, store brand items face fierce competition not only in the freezercase — where the Sara Lee/Jimmy Dean brand commands more than one-third of the market — but also in the bread and cereal aisles, dairy case, produce department and even the in-store bakery. The soft economy, however, might actually be store brands' best friend in the competition for share of stomach, Browne adds.
Packaged Facts' Brown suggests that retailers need to better educate consumers about the value they get from store brand frozen breakfast foods compared to a breakfast burrito they might pick up from a fast food chain, which, in many cases, is microwaved right before it is served.
Rethink merchandising, promotion
The category also could use some help from retailers in terms of marketing, according to Rankin. Retailers need to raise the profile of the frozen breakfast foods category and alert shoppers about how the category has evolved over the years. How? Through promotions, cross-merchandising with products in the produce department, and in-store demos and sampling programs that actually put the product in consumers' mouths, she says.
"Besides making the consumer aware of the new focus to healthier offerings, they need to make sure the products they are offering are a good value. Consumers are willing to pay for convenience and healthier foods, but they also need to feel they are receiving a good value for their shopping dollars," she explains.
Don't underestimate the communication value of packaging — call out a product's quality and convenience to attract the time-starved consumer.
Retailers also need to roll out new products more aggressively, which can be tough to do in the space-constrained freezercase. In some cases, Kroner says, expansion requires working with suppliers to take a category in a new direction.
"Improved packaging with enhanced, high-impact graphics also can help get the message out to consumers," he says. "The photo of the product on the principal display panel is vital to the success of the item on the shelf. When developing the label, the callouts stressing the convenience of preparation are also critical."
Look What's New
Fresh&Easy Multigrain Waffles from El Segundo, Calif.-based Fresh & Easy Neighborhood Market contain no artificial flavors, colors or preservatives. The frozen waffles — said to be an excellent source of 10 vitamins and minerals — are kosher-certified and can be prepared in the toaster. Each 9.9-oz. recyclable carton contains eight waffles.
New from St. Louis-based Save-a-Lot are Morning Delight Sausage Biscuits. The fully cooked, microwavable frozen breakfast sandwiches retail in a 12-count 20.4-oz. carton.
AFFI's Henry adds that packaging is trending toward environmental and cost-saving measures.
"There are new types of packaging in their shapes and look. One might notice that some breakfast bowls no longer have packaging on the sides — they might be open on the side, for example," he says. PGSB