But manufacturers say the indulgent segment is outpacing better-for-you, creating a need for retailers to re-evaluate their assortments.
Despite a 3.9% drop in volume, frozen pizza dollar sales climbed 0.5% during the 12 weeks ended Oct. 3 (versus the same period a year ago). But compared with the same quarter two years ago, sales are up 20.8% to $1.10 billion across channels, as lapsed buyers “rediscovered” restaurant-quality products that bear little resemblance to the belly filler they remember.
Manufacturers say the discrepancy between dollars and units reflects not only the impact of burgeoning inflation but a continued shift toward more premium products, both better-for-you and indulgent (think stuffed crust, double-topped and Detroit-style). But in the past year, the latter has driven much of the growth as consumers seek high-quality at-home substitutes for pizzeria fare. So make sure your assortment reflects that change.
TOO MUCH SPACE FOR BETTER-FOR-YOU?
Unfortunately, say industry observers, many retailers are still giving too much space to better-for-you brands that simply don’t turn as fast. In a normal year, offering that kind of variety might be an advantage. But until the supply chain pressures and staffing shortages creating higher-than-normal out-of-stocks finally start to let up, retailers are better off using that space to increase holding power for best sellers. As one manufacturer put it, “Better-for-you is important, but it’s about having the most productive better-for-you SKUs in full distribution versus having the most better-for-you SKUs in distribution.”
Given the flood of new better-for-you products that entered the market over the past year — boasting everything from chickpea crusts to plant-based meats and cheeses to keto certification — how do retailers decide what justifies the space? One manufacturer suggests letting taste along with true better-for-you bona fides guide your selection since some “healthy” new items offer neither. As gatekeeper, it’s the retailer’s responsibility to only offer products that really deliver on their promises.
As far as merchandising better-for-you brands, most suppliers recommend an integrated-segregated approach. So go ahead and place plant-based products in the “regular” frozen pizza set so flexitarians and other shoppers looking to make better choices at least some of the time can see all of their options in one place. Same for gluten-free, keto and organic. Just be sure to highlight specialty products with shelf-tags or signage so consumers looking for specific attributes can locate them easily. And please try to front face boxes whenever possible instead of stacking them on top of one another, obscuring key product information, Yes, store-level labor is stretched thin and fewer pizza manufacturers offer direct store delivery, but packaging is the most important purchase driver there is.
While suppliers suggest a cautious approach to better-for-you brands, they’re much more enthusiastic about single-serves, which are under-represented in most stores. However, 17% of consumers only buy single-serves, and they’re 38% more productive on a linear shelf basis, making them profit-accretive to the category. Several manufacturers have rolled out high quality new items during the past year, giving retailers more choices in the segment. Do you have enough single-serve options for consumers working from home who are looking for a quick lunch rather than a family meal?
MERCHANDISE MEAL SOLUTIONS
While frozen pizza is considered the original meal solution, retailers that merchandise it as such can boost basket sizes considerably. Instead of filling an endcap with pizza alone, take a page from delivery’s playbook and add some frozen wings, breadsticks or cinnamon buns to the display as well, even at regular price. Meal deals that pull together products from across the store — bagged salad, beer or soda and dessert — make it even easier for consumers to get dinner on the table (bonus points if everything is merchandised together near the entrance to the supermarket).
Newer products such as dessert and breakfast pizzas are taking the category into new dayparts, while innovative ethnic-inspired varieties may help broaden its appeal. But retailers need to do their part to boost awareness of these new items by including them in displays, in-store magazines, social media posts, etc.
Finally, say manufacturers, online frozen pizza sales grew almost four times faster than in-store sales in the past year, boosting e-commerce share of the category from 5% to 9%. So it’s important to optimize the digital shelf by displaying the right images, creating search engine-optimized descriptions and placing top brands in top spots on the page.