Quick Stats

Quick Stats

    You are here

    Unfrozen Opportunities

    Recent industry data shows some areas where c-store retailers can unfreeze their freezer case potential.

    By Renee M. Covino, Convenience Store News

    "Chilly" sales can be a good thing for c-stores, especially now that frozen food is getting a better rap. Scientists found that in some cases, frozen food can offer higher nutritional value than fresh food. It can also be cheaper and more convenient -- perfect for today's economy. So where does that leave convenience stores in the category?

    While the largest c-store frozen categories are, far and away, ice cream and novelties, the two are "poised for stagnation," reported Mintel, a market research firm in Chicago. According to its "Ice Cream and Frozen Novelties" summary released in May 2009, "The ice cream segment remained largely flat between 2003 and 2008, and is poised to continue to do so through 2013."

    All together, packaged ice cream novelties, which includes frozen novelties; frozen yogurt, sherbet and sorbet; and ice cream, amounted to roughly $1 billion in dollar sales for c-stores for the 52 weeks ended July 11, representing flat growth (0.9 percent) from the year prior, according to The Nielsen Co. and Convenience Store News market research. Unit sales declined 4.5 percent for the same time period.

    Within the frozen dinners and entrees category, frozen handheld entrees are the largest subsegment ($202.5 million) for c-stores with 3.4-percent dollar growth for the 52 weeks ended Aug. 9, 2009. Multi-serve frozen dinners and entrees are a much smaller subsegment ($2.5 million), but generated 27.4-percent dollar growth for the same time period. This is definitely a growing opportunity for c-stores that have the room and the demographics (moms and dads on their way home from work) looking for convenient meal options for more than one person. Single-serve frozen dinners/entrees are currently a $23.8 million market, but with a declining dollar growth rate of 9.1 percent.

    Frozen breakfast handhelds make up the largest subsegment ($84.4 million) of total frozen breakfast foods, growing almost 3 percent for the 52 weeks ended Aug. 9, 2009. As the largest contributor, private label brands are huge here (almost $19 million), growing 41.5 percent in dollar sales. Clearly, c-stores already recognize frozen breakfast as a next category frontier, particularly handheld meal options that bear their name.

    Some convenience store retailers are taking cues their supermarkets counterparts and making available more "convenient meal" options within their frozen space.

    A leading example of that comes from Nice N Easy Grocery Shoppes, based in Canastota, N.Y., with 82 stores.

    "We put an emphasis on growing the category in the fourth quarter 2008 because we had invested in large coffin freezers with open tops. These are in all of our locations built in the past six or seven years," said Jared Sturtevant, director of category management. "These units get more attention from consumers than the freezers with doors, and we saw a need to offer more items that consumers wanted. [Also] they are large and use electricity. It was time to speed up the return-on-investment."

    Nice N Easy's biggest improvement was "adding Bertolli and Gourmet Dining Skillet meals, Digiorno Pizzas and Hot Pocket Multi Packs," according to Sturtevant. "It is no secret that Digiorno is the 'best of the best' in frozen pizza, but they were previously not available through our grocery distributor so we had to get creative by sourcing it through a specialty foods company in the area."

    Minute Market in Medford, Ore., with 13 stores, has increased its selection of frozen dinners, such as Healthy Choice, according to Phyllis Simpler, operations manager and buyer, because "the industry has finally offered more of a variety, so we're offering more and selling more." She said the convenience aspect is getting customers to look at the variety of meal options, so the chain wisely made sure it increased its selection as this new buying trend began a year or so ago.

    The highest dollar sales gains for supermarkets were in some of the relatively smaller sub-segments, namely frozen bagels, other frozen breakfast and frozen pretzels.

    By Renee M. Covino, Convenience Store News
    • About Renee M. Covino Contributing Editor Renée M. Covino is a veteran researcher, editor and writer with more than 30 years of experience in the mass retail sector. Her articles and columns have appeared online and in print for dozens of industry trade magazines, newsletters, metro newspapers, Fortune 500 company reports and college textbooks. Covino is a self-named “store connoisseur” who not only writes about retail, but happily supports it.
    • About

    Related Content

    Related Content