PLBuyer: Pizza Products – Rollin’ in the Dough
By Lori Seidler
Through a special arrangement, what follows is an excerpt
of a current article from Private Label Buyer, presented here for discussion.
According to Information Resources Inc. (IRI), refrigerated pizza crust/dough and pizza sauce experienced double-digit increases in dollar sales throughout the 52 weeks ending Feb. 24, 2008. Even more impressive is private label’s overall performance in these segments – store brands experienced double-digit increases in both dollar and unit sales. In fact, private label dollar sales increased by a whopping 43.7 percent in the refrigerated pizza crust/dough segment, while the total subcategory saw a 22.1 percent rise. And in unit sales, private label increased 29.2 percent, while the total category realized a 17.1 percent increase.
IRI data shows that ready-made pizzas (frozen and refrigerated) are doing well, but the real growth is in the “make-it-yourself” segments (e.g., dough, sauce and other pizza-making products). Consumers have less disposable income these days, and making pizza at home enables them to create and enjoy their favorite pies without having to sacrifice a significant portion of their grocery budget. It’s no wonder private label is experiencing substantial growth in this area of the pizza category.
Growth in the overall pizza category, however, is being attributed to an evolution of sorts in pizza products. The quality of items is improving, making them more attractive to an even wider variety of consumers. The focus on products in the pizza category has gone from the familiar (and beloved) greasy cheese and pepperoni-type offering to more healthful versions with whole-wheat crusts, organic veggies and/or low-fat cheese.
“The trend toward more healthful eating has been a significant catalyst in the growth of the pizza [category],” explained Giacomo Fallucca, president and CEO of Palermo’s Pizza. “More and more pizzas feature cleaner ingredient decks with fewer artificial components, and many include all-natural and/or organic ingredients.”
The organic trend is also really making its mark with consumers in the pizza aisle. But for today’s health-conscious consumer, it’s not just what’s on top of the pizza that counts.
“The biggest change [in the overall category] has been the wide variety of new crusts on which pizzas are being offered,” observed Vincent V. Fantegrossi, president and CEO of Richelieu Foods. “The trend is toward thicker crusts, thin crusts, extra thin crusts, whole-wheat crusts, etc.”
As the pizza category continues to evolve in various directions, retailers will have to work hard at convincing customers to explore what’s new.
“In order to keep pace with the national brands, as well as improve customer acceptance and loyalty, store brands would be well-served to bring their offerings up to a premium product,” Mr. Fallucca suggested. “Sample [private label] aggressively in order to get consumers to try it, and place the products appropriately in a case that’s segmented by product quality levels.”
Ron Frump, president and CEO of Frozen Specialties Inc., Holland, Ohio, agreed. “Quality and innovation are areas of opportunity for private label pizza products. It’s important for retailers to get out there with their store brand pizza programs and offer customers more variety and value. If this happens, private label pizza products are looking at a pretty good future.”
Discussion Question: What are some obvious and perhaps less so obvious reasons that frozen and refrigerated pizza products have turned into such a blockbuster category at supermarkets? Secondly, what improvements in private label frozen/refrigerated pizza items have you noticed that other categories can learn from?