July 12, 2007
PL Buyer: A Brave New World of Convenient Dinners
By Martin Schultz
Through a special arrangement, what follows is an excerpt of a current article from Private Label Buyer, presented here for discussion.
The food industry has finally taken seriously what their marketing departments have been saying for years. No one has time anymore to cook, and families want their children to eat nutritious meals rather than relying on a regular diet of fast food.
“Providing a convenient meal solution for people on the go and who have no time to make a meal from scratch provides a great opportunity for the private label processor,” noted Shawn Dellevoet, business development director at Toronto-based frozen food supplier, Morrison Lamothe.
Private label processors – moving beyond price alone – are increasingly fighting for market share in the convenience meal market on such attributes as quality, appearance and flavor. This involves marketing products that offer a different kind of taste experience, a more intense traditional flavor, or an especially attractive plate appearance or some added convenience attribute, such as extremely fast preparation time.
Also, more and more private label food manufacturers are offering items with a more pronounced nutritional emphasis, either with undesirable ingredients lessened or removed (such as sugar, trans-fat, saturated fat and cholesterol) or with ingredients deliberately included (like omega-3).
To put it all into perspective, it was just a few years ago that consumers purchased meal packs based only on convenience and price. No refrigerated pizza, for example, came close to tasting like the restaurant version. Today, however, grocery store refrigerated pizzas are offered in a variety of styles (thin-crust, deep-dish, four-cheese, California-style) that have an authentic flavor and aroma and come with easy-to-follow cooking instructions at a huge range of price points. The grocery store has discovered it can compete directly with pizza delivery, and it’s begun to take on other eating establishments too.
For instance, Alexandria, Va.-based Cuisine Solutions Inc. has developed a premium range of 300 fully cooked, vacuum-packed frozen entrees and sauces.
“Among our chef-created recipes, for example, we offer a Brazilian-derived Picanha seared beef sirloin dinner,” said Lilian Lau, marketing manager for Cuisine Solutions. “Each recipe comes with its own unique sauce. The dishes are all-natural, and have no added antibiotics or hormones. But what we think makes them especially attractive is that they suggest a feeling of sophistication.”
Morrison Lamothe produces value-type microwaveable dinner items, including pastas, meat pies and soups. But it also has a line of premium dinners for more discriminating consumers.
“We offer sharable appetizers like pastry-enrobed brie,” explained Mr. Dellevoet. “For the really sophisticated dinner party, we have a salmon wellington.”
Discussion Questions: Have you noticed a similar improvement in convenient dinner selections by supermarket’s store brands? What’s driving the improvement? What else could private label processors be doing to compete better with major brands or even restaurants?
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Private label refrigerated and frozen prepared meals historically have lacked perception of quality due to inferior packaging design, packaging quality, and sometimes, actual taste and portion quality. The pricing is sometimes at 50% of the national brand, which along with the other factors I mentioned, results in perception inferiority. Make a better product, design and package the product to a national brand standard, or better, deliver great taste, nutrition, and ingredients, and price your goods at about 80% of the national brand, and sales will grow.
Huge opportunity here when done right. An emphasis on providing proper nutrition and ingredient information is key. Many prepared meals use huge amounts of salt or sugar compared to what you’d use if you were cooking at home. Consumers are more aware of these dangers now, and if the retailer takes pains to market healthy, nutritious meals, they’ll win business.
I feel that the sky is the limit for retailer grocers today to expand and promote private label prepared foods. What foodie who is time strapped could pass up some great comfort food from their favorite store, packaged attractively and priced right.
All of the major grocery chains are racing to bring out exciting new lines of private label organics and comfort food with attractive labeling and value pricing. A&P more than 15 years ago started the trend of premium quality, value priced products when it introduced its Master Choice line. Their frozen Mac & Cheese entry is a knockout. A blend of delicious tasting cheeses, that makes any mac & cheese lover think that she/he has gone to heaven.
So I think, as grocers expand their private label lines, the customer will benefit from the process. Yes, it’s the packaging, the pricing, but most of all, it’s the taste that matters most.
The quality of most prepared dinners is so poor that they are not seriously considered by people that like to cook and have the time and resources to do their own. I believe that comment applies to name brand dinners and private label would be even worse. That being said, there is obviously a large and growing segment of the population that doesn’t have the time or desire to cook from scratch. Prepared meal choices that are properly prepared and competitively priced should have great appeal to these groups. As this volume increases it should become economically feasible to offer private label entrees. If the Costco or Trader Joe’s strategy is followed, it should be very successful. You must have good to excellent quality at a competitive price or you are wasting your time and giving the whole category a black eye. Unfortunately, far too many retailers are looking for the quick, easy solution and don’t approach it this way.
Some supermarket customers have 1 priority: price. They want the lowest price, private label or not. Some supermarket customers want quality at a discount. It’s the second group who offer an opportunity for brilliant, creative, fun private label. Those products need marketing: in-store tastings, coupons, publicity, taste-testing, focus groups, market research, cross-selling, unusual packaging, and time. Of all the tools needed, the most critical is time. Trader Joe’s wasn’t built in a day. It took years of persistence. it takes time for the right audience to find its new favorites. Not many grocers feel they can afford years of persistence. If the item doesn’t sell in the first 3 weeks, will it be assassinated, along with the associated buyer, supplier, and executive involved?
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Private label refrigerated and frozen prepared meals historically have lacked perception of quality due to inferior packaging design, packaging quality, and sometimes, actual taste and portion quality. The pricing is sometimes at 50% of the national brand, which along with the other factors I mentioned, results in perception inferiority. Make a better product, design and package the product to a national brand standard, or better, deliver great taste, nutrition, and ingredients, and price your goods at about 80% of the national brand, and sales will grow.
Huge opportunity here when done right. An emphasis on providing proper nutrition and ingredient information is key. Many prepared meals use huge amounts of salt or sugar compared to what you’d use if you were cooking at home. Consumers are more aware of these dangers now, and if the retailer takes pains to market healthy, nutritious meals, they’ll win business.
I feel that the sky is the limit for retailer grocers today to expand and promote private label prepared foods. What foodie who is time strapped could pass up some great comfort food from their favorite store, packaged attractively and priced right.
All of the major grocery chains are racing to bring out exciting new lines of private label organics and comfort food with attractive labeling and value pricing. A&P more than 15 years ago started the trend of premium quality, value priced products when it introduced its Master Choice line. Their frozen Mac & Cheese entry is a knockout. A blend of delicious tasting cheeses, that makes any mac & cheese lover think that she/he has gone to heaven.
So I think, as grocers expand their private label lines, the customer will benefit from the process. Yes, it’s the packaging, the pricing, but most of all, it’s the taste that matters most.
The quality of most prepared dinners is so poor that they are not seriously considered by people that like to cook and have the time and resources to do their own. I believe that comment applies to name brand dinners and private label would be even worse. That being said, there is obviously a large and growing segment of the population that doesn’t have the time or desire to cook from scratch. Prepared meal choices that are properly prepared and competitively priced should have great appeal to these groups. As this volume increases it should become economically feasible to offer private label entrees. If the Costco or Trader Joe’s strategy is followed, it should be very successful. You must have good to excellent quality at a competitive price or you are wasting your time and giving the whole category a black eye. Unfortunately, far too many retailers are looking for the quick, easy solution and don’t approach it this way.
Some supermarket customers have 1 priority: price. They want the lowest price, private label or not. Some supermarket customers want quality at a discount. It’s the second group who offer an opportunity for brilliant, creative, fun private label. Those products need marketing: in-store tastings, coupons, publicity, taste-testing, focus groups, market research, cross-selling, unusual packaging, and time. Of all the tools needed, the most critical is time. Trader Joe’s wasn’t built in a day. It took years of persistence. it takes time for the right audience to find its new favorites. Not many grocers feel they can afford years of persistence. If the item doesn’t sell in the first 3 weeks, will it be assassinated, along with the associated buyer, supplier, and executive involved?