Milling & Baking News - June 26, 2012 - 33

Pizza premiumization
Natural, organic players enter the frozen case
hree years ago, more than 1 billion frozen pizzas were purchased in the 52 weeks ended May 17, 2009, according to SymphonyIRI Group, a Chicago-based market research ﬁrm. In the 52 weeks ended May 13, 2012, that number had slipped to 967,749,200 units, down nearly 6% over the previous 52-week period and down 4% from 2009. In many respects, not much has changed in the category in recent years. Manufacturers that in 2009 were just beginning to shift to higherpriced, specialty pizzas with a focus on natural and premium ingredients continue to do so in 2012. The difference is a few new players have entered the market looking to make a splash. One change felt in the pizza market is the recovery in the economy. “The frozen pizza industry capitalized from the recession as pizza-loving consumers sought a better overall value proposition and lower absolute costs,” said Technomic, Inc., in its “The Pizza Consumer Trend Report” issued in April. “However, the economic recovery, continued use of coupons to drive food service pizza purchases, and increased promotion of take-and-bake retail options challenge the market.” Leader of the pack Nestle USA, Inc. remains the top player in the frozen pizza category with dollar sales of more than $1.4 billion in the 52 weeks ended May 13, according to SymphonyIRI. The Glendale, Calif.based company, which offers pizza under the Tombstone, California Pizza Kitchen, Jack’s, and Stouffer’s brands, generates most of its sales through the DiGiorno brand. With dollar sales of $702,331,100 in the 52 weeks ended May 13, DiGiorno accounted for about 22% of total category sales. In late May, Nestle unveiled plans to branch out the brand with the launch of Pizza Dipping Strips. The product features a thick crust and is portioned into 12 pull-apart strips. Each Pizza Dipping Strips package comes with
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two dipping sauces in marinara and creamy garlic ﬂavors. The strips are available in three ﬂavors: pepperoni, three-meat and four-cheese. DiGiorno also introduced a line of Italian Favorites frozen pizzas in three varieties: meatball marinara, chicken Parmesan and meat trio. Nestle’s decision to try and capitalize on the popularity of the DiGiorno brand ﬁts in with a trend identiﬁed by Technomic in its report. “DiGiorno increasingly outpaces other top brands as consumers’ most preferred frozen pizza,” Technomic said. “Branding appears to be more integral to the frozen pizza category than low absolute prices.” Private label still has punch Despite Technomic’s assertion that consumers tend to prefer brands to private label, data from SymphonyIRI tell a slightly different story. In the 52 weeks ended May 13, dollar and unit sales of private label frozen pizza were up 14% and 9%, respectively. More than 128.7 million frozen pizza units were sold in the period, which topped the 127.5 million units sold under the DiGiorno brand. David Browne, senior analyst with Mintel, Chicago, said private label sales have ﬂuctuated in recent years. He said

he wasn’t sure what has led to private label’s growth during the past year, but suggested it may be that a retailer has made a bigger play or added new lines. Small players making larger footprint Amy’s Kitchen, Petaluma, Calif., and Newman’s Own, Inc., Westport, Conn., each generated about $45 million in sales in the 52-week period ended May 13. While their share represents less than 2% of all dollar sales in the frozen pizza category, they were among just a few of the top 15 brands to generate unit sales growth during the same time period. Amy’s pizzas have garnered a niche among consumers who aren’t able to tolerate wheat and want pizzas with a gluten free crust, or who want a nondairy cheese pizza alternative. At an average retail price of $6.48, Amy’s frozen pizzas are among the most expensive in the category. Newman’s Own pizzas, at $5.87 per unit, also aren’t cheap, but have been just as successful in drawing in new consumers. The pizzas feature a prominent “all natural” label on the front of the packaging and the company claims they include “top of the crop toppings.” Unit sales of Newman’s Own were up 42% in the 52 weeks ended May 13, while dollar sales increased 47%. The newest player in the market is Annie’s, Inc., Berkeley, Calif. The company went public earlier this year, and recently launched an initiative called Frannie, which is short for Frozen Annie’s. The effort includes the introduction of a line of certiﬁed organic rising-crust pizza. “In March, we announced the launch of our made-with-organic line of rising crust pizzas into broader natural, grocery and mass merchandisers beginning later this summer,” said John Foraker, chief executive ofﬁcer of Annie’s, in a June 6 conference call with analysts. “Product presentations have been happening over recent weeks, and customer reception has been strong.” MBN
— Eric Schroeder
Milling & Baking News June 26, 2012 / 33

Dr. Oetker to build frozen pizza plant in Ontario
LONDON, ONT. — Dr. Oetker Canada Ltd., maker of frozen pizzas under the Ristorante, Casa di Mama and Panebello brands, has received federal funding from the Canadian government to build a frozen pizza plant in London. The London plant, which is slated to open by early 2014, is expected to help Dr. Oetker produce up to 50 million frozen pizzas per year for the Canadian and U.S markets and “source high-quality ingredients such as cheese, ﬂour, meats and tomato sauce from Ontario farmers and food processors,” the company said. Nearly one in three frozen pizzas sold in Canada are Dr. Oetker pizzas, and the new facility is expected to serve as a production hub for North American pizza operations. MBN

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Pizza Update
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Milling & Baking News - June 26, 2012

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