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?
First of all, many of the newer pizza products taste better than past products. Second, there is a greater variety of tastes or pizza configurations. Interesting choices that taste good sounds like a good reason to buy more frozen pizza.
For many years, I worked with a producer of pre-made pie crusts. You know, the graham-cracker kind, not the pizza kind. But the pizza article triggered my memories of the other kind of pie.
The marketers for this leading brand used to tell me why their product was so successful–why their particular “ingredient” product had staying power and others didn’t. Based on studies, they said that there is an ideal preparation time (involving number of steps, other things you have to buy and mix, etc.) Too much, and you wonder why you didn’t just do it from scratch. Too little and you wonder why the product producer didn’t just FINISH the job.
Pie crusts, evidently, fall into a golden mean zone. The cook gets a sense of satisfaction, the product tastes better and fresher than if it were bought completely pre-made, and it’s not too difficult.
Anyone want some pie?
Frozen pizza is one of those categories that is constantly evolving and innovating. Also, there are well defined subcategories within the category. Quality and packaging have improved in leaps and bounds from 10 years ago. Well merchandised sections look great and are easy to shop which adds to the convenience factor of frozen pizzas. Now if only we could get Tombstone or Tony’s here in the Great White North!
The food quality and economy are certainly big factors. In addition, the price of gas is causing everyone to rethink food delivery. A recent study found 10% of restaurants have stopped free food delivery with many more adding delivery surcharges or smaller delivery areas. Bottom line: eating more cheaply and healthfully at home is in. Many frozen items fit that bill better than delivered pizza ever could.
I would bet that the majority of the Y-O-Y growth occurred during the latter 6 mos of that period, as the economy slowed considerably. This likely drove a lot of consumers to trade out of take-out pizza and trade-in to supermarket options. This is part of a larger shift back to DIY….
People young and old love pizza! I agree with others that the taste and texture of pizza you cook at home has dramatically improved. I also think that families looking to squeeze their pennies see that “going out for pizza” and soft drinks a couple times a week is costly and uses expensive gas for the car. Embellishing the base by adding a bit of extra cheese, maybe garlic, fresh basil or other toppings can create a very fine tasting and visually satisfying pizza at home for half the price of “going out.”
Agree that frozen pizza hits the sweet spot for many consumers today. One of the big drivers for a frozen pizza purchase was the convenience of having it on hand–available any time. Add to this the trend fewer shopping trips, and we will be seeing more frozen pizza in the stock-up category. Increasing costs for delivery and take out pizza are making it less attractive.
The quality of frozen pizza has improved markedly in the last ten years, since the introduction of Kraft’s DiGiorno. The rising crust products set a new standard in taste, while appealing to a broader range of consumers. An important part of the success was the new packaging. It was vacuum packed to protect flavor and keep all the toppings in place, making it more attractive than many of the less expensive varieties. The freshness message was reinforced by the cut-out on the carton. The shopper could see the actual product and consider this against the other “hidden” products. The category was reinvigorated; many new healthier versions as well as higher end specialty items are available, representing good value, healthier choices as well as convenience for shoppers.
The next step for some to consider is carton design for efficient storage in the home freezer. With more “stocking” trips, the home freezer will be used more; another opportunity for marketers.
I’ve always called frozen pizza “biscuit pizza” because their crusts were made of refrigerated biscuit dough. At BI-LO in the 80s we sold G&W frozen pizzas 3/$1. We used to call them “Gag & Wretch” (yes, I know that we really meant “retch,” but the “w” in “wretch” fit better). That’s changed somewhat through the use of yeast in the crusts as a leavening agent in addition to baking soda–but it’s hard to wake up those little yeasties from a frozen state. And, Boboli has significantly contributed to the home-made pizza trend. I wonder where Papa Murphy’s take-and-bake pizza falls in the at-home trend–are they in the same category as in-store take-and-bake pies?
However, regardless of the so-called quality improvements in pizza that’s frozen, home-made, or take-and-bake, it can’t compare in quality to delivery products like those from Round Table and a few others. You don’t have to “go out” to get great pizza, and you don’t have to pay an arm and a leg.
That said, how would I explain the growth in the pizza ingredients category? In-home entertainment. Big-screen TVs, NetFlix, the costs of gas and theater ducats, and getting everyone into the kitchen to design pizzas together. Picture the kitchen scene from “The Big Chill.” It’s a blast, and my grown-up-and-moved-out kids do it all the time. Plus, the refrigerated dough (rather than frozen) can be made with more yeast (easier to wake them up) and more high-gluten flour for a more genuine crust.
All the pizza restaurants are crying about huge ingredient inflation (flour, cheese). How does frozen pizza inflation compare to the pizza restaurant inflation? And when will the restaurants start serving breakfast pizza?