Consumers trading down from restaurants boost a burgeoning premium segment.
Although unit sales fell 1.9%, frozen pizza dollars jumped 11.7% during the 12 weeks ended July 10 to $1.43 billion, outperforming the department as a whole in both measures, according to Chicago-based market research firm IRI (iriworldwide.com).
The disparity between units and dollars, which started with the category’s “premiumization” several years ago, has widened in recent months as most brands implemented price increases. But even in the face of record inflation, units haven’t dropped off as much as they have in other categories. Although it may seem counter-intuitive, the premium segment has historically done well during inflationary periods, explains Brad Sterl, president and CEO of Pittsfield, N.H.-based American Flatbread. Their budgets may be squeezed, “But consumers still want a good food experience, so they opt for the premium frozen space over a restaurant.”
And thanks to the pandemic, says John Reaves, CEO of Carlsbad, Calif.-based Milton’s Craft Bakers, they already know there are excellent alternatives in the grocer’s freezer. “During the past two years, many consumers rediscovered the frozen category and found convenient options that are as good as or better than their restaurant go-tos,” he reports. So they already know that premium frozen pizza delivers “a great value” compared to local restaurant or takeout alternatives.
A SLICE ABOVE THE REST
Given the shift toward premium products that rival restaurant fare, it comes as no surprise that much of the new product development is happening at the high end of the category. Among the new items launching now is a new craft pizza brand from Bloomington, Minn.-based Schwan’s called Hearth & Fire.
Intended to turn even frozen pizza skeptics into believers, the artisan quality collection is created using a proprietary dough and production process, including 20 hours of fermentation and fire-roasting.
“But the crust is only part of what makes these pizzas a slice above the rest,” says Schwan’s CMO Roberto Rios. “We also created premium topping combinations that feature ingredients like roasted shiitake, portobello and cremini mushrooms; whole basil leaves; caramelized onions; whole milk mozzarella medallions and goat cheese.” Available flavors include The Margherita, The Pepperoni, The Bianca, and The Mushroom, all offered in innovative vacuum-sealed packaging to preserve the craft quality.
The line debuted in select Kroger divisions late last month, but consumers in several other markets will be able to purchase products for home delivery through the hearthandfirepizza.com website. Launched long before the collection hit supermarkets, “The website is essentially a hub where consumers can both learn more about our product and draw inspiration for their own craft pizza,” says Rios. “We want to be the leaders in craft-quality pizza. When someone types ‘How to make craft pizza’ in Google, we will be at the top of the search list.”
‘Something like ‘Buy a pizza and a case of beer and get a $5 rebate’ would not only increase sales but also get people in the door.’
Another new entry in the premium space comes from American Flatbread. “We constantly receive requests for a pre-grilled product from loyal customers who grill our pizza on the barbecue,” says Sterl. To save those folks some time, the company will launch three Grilled and Seared Flatbreads featuring its authentic sourdough crust this fall. Grilled and seared in a wood-fired oven and then layered with organic tomato sauce and fresh toppings, the lineup consists of Tuscan Margherita, Greek Isle and Truffle Fromage.
Newman’s Own, Westport, Conn., is also moving into the premium space with a new Stone-Fired Crust lineup imported from Italy that represents its first foray outside the thin and crispy and cauliflower crust segments. Stone-fired at a very high temperature to lock in flavors and create a light, airy, slightly crispy texture, the pies come in three flavors: Margherita, Quatrro Formaggi (Four Cheese) and Spinaci & Formaggi (Spinach & Cheese).
While new brands and sub-brands continue to enter the premium space, existing players are expanding their offerings as well. For example, Milwaukee-based Palermo’s added three new varieties to its Screamin’ Sicilian lineup, which boasts a buttery, stone-fired crust, whole milk mozzarella, a secret-recipe tomato sauce and “tons of toppings,” according to chief product and innovation officer Nick Fallucca. Described as “classic pizza flavors with a twist,” the newcomers include Sausage & Shrooms (“our take on a traditional Wisconsin flavor”), Bacon-Roni, and Ultimate Deluxe, the latter of which was created in response to demand for a supreme pizza different from the rest.
At the other end of the price-value spectrum, Palermo’s partnered with Netflix and Walmart to create a frozen pizza line inspired by the fictional takeout brand featured in Season 4 of the popular Netflix series Stranger Things. The pizzeria-style Surfer Boy Pizza lineup features a hand-tossed style crust crispy on the outside and airy on the inside, rich tomato sauce and whole milk mozzarella. Available flavors include Pepperoni, Multi-Meat, Supreme and Pineapple Jalapeno.
“[Fans] think Surfer Boy is as good as or better than takeout,” says Fallucca. “And at only $6.98, it’s a great value.”
NO TRADE-OFFS WITH NEW HEALTHY OPTIONS
While many new premium frozen pizza launches are of the decadent variety, plenty of new better-for-you options are also hitting grocers’ freezers in the coming months. And according to manufacturers, they’re better than ever. “Many frozen pizza brands require trade-offs between taste, health and real ingredients,” says Reaves of Milton’s. But its cauliflower crust collection featuring real cheese and top quality gluten-free toppings delivers pizzeria-style taste and texture — no sacrifice needed. The company expects to add a fifth variety, Grilled Chicken & Garlic, to its lineup in Q1 2023.
Another player in the cauliflower crust segment, Los Angeles-based Caulipower, is also expanding, adding a gluten-free white pizza with béchamel sauce, spinach and a blend of three cheeses to its gluten-free collection, which is now stone-fired. Called Tomatoes Have Left the Chat, the new variety delivers 14 grams of protein per serving, according to the company.
Chicago-based Conagra is also getting in on the cauliflower crust craze, adding three single-serve flatbread pizzas featuring a crust made with cauliflower, wheat and barley to its Healthy Choice collection. Available varieties include Turkey Pepperoni, Chicken Sausage Supreme and BBQ Seasoned Chicken, all topped with reduced fat mozzarella. Free of artificial colors and flavors, each pie delivers 18 to 22 grams of protein.
But not all gluten-free pizza is made with a cauliflower crust. Montreal-based Oggi Foods uses a proprietary gluten-free flour blend (and no eggs or dairy) to create its hand-stretched, Neapolitan-style pies — the only ones in the segment with rising air pockets, according to the company. The newest addition to its lineup is a pair of vegetarian flavors — Pepperoni and Supreme — featuring plant-based Beyond Meat toppings “so consumers can enjoy the most popular pizza flavors without feeling bad about it.”
Category newcomer Talia di Napoli, Brooklyn, N.Y., is also entering both the gluten-free and plant-based segments. The company offers authentic Neapolitan pizza made in the place where pizza was born — Naples, Italy — with non-GMO ingredients sourced from small farms in the region. Its retail lineup currently includes both Mozzarella and Margherita varieties, but according to co-founders Edouard Freda and Ludovico Bassetti, the company is planning to add both Gluten-Free Margherita and Vegan Margherita plus a third new flavor that features plant-based meat. “We want to make sure that everyone, including celiacs and vegans, are able to enjoy pizza for what it is and not a ‘close enough’ replica,” say the pair, who spent months searching for just the right mozzarella cheese substitute — and years perfecting their gluten-free dough recipe.
Available at a handful of U.S. specialty grocers, including select Whole Foods, Fresh Market, Good Earth and Tony’s Market locations, Talia di Napoli pizzas are fully baked and then frozen using cryogenic technology, so they only require 10 minutes in the customer’s oven, according to the company.
CONSIDER PIZZA MEAL DEALS
What can retailers do on their end to help grow their frozen pizza sales? Sterl says cross-merchandising and meal deals are underused strategies that could prove especially effective in this economy.
The folks at Oggi Foods are also big fans of bundling. “Something like ‘Buy a pizza and a case of beer and get a $5 rebate’ would not only increase sales but also get people in the door,” says director of operations Stefano Cataldo.
For premium brands in particular, Freda and Bassetti at Talia di Napoli also suggest more product sampling so customers can taste for themselves “why paying an extra $4 to $6 for a pizza is worth it.” They would also like some help highlighting the clean ingredients in their products versus conventional frozen pizza.
“Increasing premium pizza sales is in retailers’ own best interest because, even if velocities are slightly lower due to the higher price, the dollar profit…is immensely higher,” say the company co-founders.
That’s also one of the reasons Reaves gives for retailers to expand their better-for-you pizza portfolios. Not only would it be good for the bottom line, “They could also better serve the consumers who currently shop at multiple stores because healthier choices may be limited at certain retailers,” he says. n