R&FF Retailer: Under Five Percent of Shoppers Buy More Than 50 Percent of Frozen Seafood
By Warren
Thayer, Editorial Director, R&FF Retailer
Through
a special arrangement, presented here for discussion are excerpts of a
current article from Refrigerated & Frozen Foods Retailer magazine.
Did you know that according
to Catalina Marketing, only 2.6 percent of shoppers account for 54.3 percent
of dollar sales of all frozen breaded seafood? Or that 4.6 percent of shoppers account for 63.5 percent of unbreaded frozen
seafood? Neither did we.
Those percentages get
even more interesting at the brand level. For example, the following percentages
of all consumers within Catalina’s Pointer Media Network (76 percent of
the American grocery shopping population) make up 80 percent of the sales
volume for these frozen breaded seafood brands: Gorton’s, 6.16 percent; Van De
Kamps, 1.9 percent; Seapak, 1.2 percent; and Mrs. Paul’s, 1.17 percent.
So, in whatever manner
you choose to do it, it certainly makes sense to identify your heavy frozen seafood
shoppers and deliver incentives to them. Todd Morris, senior vp of business
development for Catalina, says it’s wise to offer not only incentives,
but perhaps something as simple as a recipe, a suggested new use for a
product, a new flavor/variety or merely a reminder to buy.
He points out that when
buying frozen unbreaded seafood, shoppers purchase two or more units only
33 percent of the time. On average, there are 1.5 units per transaction.
And for frozen breaded seafood, shoppers purchase two or more units only 22 percent
of the time. In this segment, the average transaction is comprised of 1.3
units. If you can trade these shoppers up to buy, say, three units instead
of two, you’re obviously onto something good.
“If people are buying
two units at a time, we might incent them to buy three on their next shopping
trip. Over 10 percent of the people we give that incentive to will come
in and buy three units within 14 or 20 days,” Mr. Morris notes.
One more reason to segment
your shoppers: the heavy frozen seafood shopper typically spends $121 a
year in the category versus just $30 for the light user, according to Catalina
data. Mr. Morris points out that it’s wise to target shoppers who buy in
the category more than once a year and try to build their consumption further.
He also noted that the Lenten season does not dominate the buying.
“We looked at a
number of (frozen seafood) brands, and about 75 percent of their volume
was moved in non-Lent weeks,” said Mr. Morris. “The trick is
to drive the business year-round.”
Discussion
Questions: If under 5 percent of
shoppers buy half of all frozen seafood, how should promotions be maximized?
What’s the best way to reach heavy users? How might promoting seafood
differ from other categories with a concentrated group of buyers?
I would turn the question around. If under 5% of shoppers buy the majority of frozen seafood, there’s a problem in the category. The question should be, how does the category prevent itself from becoming irrelevant? They not only need to keep current customers, they must take steps to promote growth of users in the category.
In terms of keeping the category relevant, how about handing out samples on heavy shopping days, along with coupons? If a huge percentage of shoppers is not buying the category at all, presuming the quality is there, sampling and coupons for some of the best selling/tasting items should help that, no?
The first two comments are definitely on target. I would add to the discussion by suggesting some answers and hypotheses lie in better understanding the fish category overall.
How much fish is purchased – frozen and fresh? What is the share by variety? Who is buying? Do fresh fish purchases profile as frozen fish purchases? Why? Why not? What is the relationship between these consumers and how they use fish and the occasions they prepare and serve it?
There’s a reference in the article to an average of 1.5 units purchased. This tells me that the analysis is short sighted. I’m guessing no one buys one half unit. So the average is not the way to look at the units purchased, but rather the distribution of number of units. Overlay this with the information I request above and you can begin to see what this market opportunity looks like.
From the article alone it would seem encouraging use through additional varieties is a viable answer. The consumer is buying a convenience food and now has an additional convenient variety to serve. If the small group of consumers is serving these varieties several times a week, we can’t be certain that the availability of more varieties will increase purchases. What is the saturation point?
Undoubtedly Catalina has a reason for suggesting incentives will influence further sales. How that reason relates to the data is unclear to me.
What about sampling? Also consider the impact of news reports of imported seafood. It is clearly being positioned as anti-American and unsafe as a result. What is the correlation to buyers of fresh seafood? I may not be typical but I regularly buy fresh seafood for the family, and frozen breaded for the kids.
Relevance is not the issue here. Fear of cooking is the problem. Preparing fish at home is a scary thought to the vast majority of shoppers. The answer is education, starting with those who like to cook. The most people, however, can be won over by some of the new valu-added products. Retailers who are not paying attention to these products are the ones at risk of being irrelevant.
The fish industry has many obstacles to overcome. Many people simply do not like fish. Midwesterners outside the large cities are often in that category. They were raised as meat eaters. Other folks who absolutely love fish are often not happy with the available store selection and are unsatisfied with the end result of their home cooked efforts. These people, however, may order fish entrees 80% of the time when they go to restaurants.
Quite honestly, lots of grocery store fresh fish markets don’t smell good. This turns many shoppers off and makes them leery about purchasing what’s in the case. The fish sampling I’ve personally encountered recently at grocery store grand openings, etc. are frequently not wonderful experiences, either, because the preparation apparatus on the floor is lacking so the sample quality suffers. Costco seems to manage to offer quality sampling, however.
Finally, to borrow a political phrase, “It’s the storage, stupid!” Whether fresh or frozen, keeping fish in top notch condition prior to consumption at home is difficult. This is likely a major factor driving the small “units purchased per visit” which the article describes.
Maybe a campaign akin to “Pork – the other white meat” would help. Also, the economic downturn could be a good opportunity to produce luscious seafood recipes to lure more of those restaurant-only fish lovers to their home grills and kitchens.
As with others who have commented, it seems to me that expanding the category is a more immediate concern than speaking to heavy users. However, purchase frequency is probably an issue. The competition for share of stomach is fierce. It would seem to me that a re-energizing of the category is important. Are there health benefits, taste benefits, convenience benefits coupled with taste benefits? Are there things that can be done to expand the imagery of some soggy fish sticks on a plate? (At least that’s the image that comes to my mind. My mother fed them to me on a regular basis.) Of course there are key holidays, like Lent, and then there are key constituents, like Kosher consumers for whom fish is an important “parve” food option. Just as the fast food retailers have trouble with this segment, so too the supermarkets. I believe a branding overhaul is in order.
“2.6 percent of shoppers account for 54.3 percent of dollar sales of all frozen breaded seafood.”
This shows a seriously uneven pattern of consumption. This is reminiscent to me of the fact that 80 SKUs (out of 40,000) can make up 20% of the total dollar sales of the store, while the 20,000 items at the end of the long tail contribute less than 4% of total store sales.
Or, how about the fact that 16% of all supermarket purchases are of only a single item.
All of these seriously non-normal distributions of really important facts, show how flawed reasoning and thinking in terms of “averages” are. There is more on “Average Quicksand” here….
Understanding shopping requires some SERIOUS non-normal thinking. 🙂