This month Mintel is focusing on the frozen bakery and pastry sector and on the expansion of key market players, which help shape the industry.. Mintel has identified some of the key players across Europe as well as their current product expansions.
Frozen bakery and pastry continues to be dominated by Dr Oetker and Nestlé in Europe, with the brands mostly focused on frozen pastry dishes, primarily deep-freeze pizza, but diversifying their products. There continues to be expansion into frozen desserts from several brands, with innovation happening around sweet pizza from major players in the UK and the Netherlands.
Investments in innovation
Brands are also likely to invest in R&D for other frozen pizza-inspired dishes to expand into Europe, such as breakfast pizza which is in high demand in the US or croissant pizza, an innovation from Japan. Dr. Oetker, both with pizza brands like Ristorante and Tradizionale as well as the sweet frozen pastry range ‘MyDeli’ is the dominating brand in several Western and Central European markets, including Austria, Belgium, Netherlands and Poland. Dr. Oetker is also the dominant international player in France and the UK, although brands based in the countries remain more successful than the two global players. Nestlé holds the largest market share in Spain, Switzerland and Germany, particularly due to the popularity of its ‘Wagner’ Pizza brand, as well as the Pizza Brands Buitoni and Giorno. Dr Oetker is a close second in Germany however, and both brands are head to head in Italy. Both Nestlé and Dr Oetker have only a very small or non-existent presence in the Nordic countries, which continue to be dominated by the brand Orkla. Frozen bread remains a niche product in most of Europe, but due to its potential waste-reduction, represents a possibility for a range of brands.
Pizza & Pizza-type frozen dishes
Be it the convenience or taste of frozen pizza, it continues to be the most popular frozen food for all of Europe. Unsurprisingly, the major international players continue to be Dr Oetker and Nestlé, with both brands diversifying their range to speak to a larger variety of different preferences including – Thin Crust, Rising Crust, Chicago-Style, new and unusual flavors. Nestlé Wagner is even seeking to diversify into the adjacent frozen snacks category. To revitalize the German frozen snack sector, the company is preparing to launch a brand new range of Italian-style oven-baked breads under the name ‘Rustipani’, a product first launched by Nestlé in 2015 in Switzerland. In the UK, the biggest frozen pizza maker Chicago Town, which is owned by Dr. Oetker, has moved from dinner to dessert, with the launch of a chocolate pizza. Oetker’s decision to extend its market leader into new occasions follows a fruitful period for the brand. Chicago Town has benefited from a reinvigoration of the frozen pizza category in the UK over recent years, with the growing price gap between the chilled and frozen aisles benefiting cheaper frozen brands. Mintel’s Prepared Meals Review – UK, May 2016 report revealed that volume sales of frozen pizza increased by from 2014 to 2015, while volumes in the chilled segment declined.
Sweet Frozen Pastry
Dr Oetker launched a limited edition dessert pizza under their UK brand Chicago Town, featuring a chocolate dough base and a variety of milk, dark, and white chocolate toppings. The product launched in autumn 2016 is clearly targeted at family meals and other sharing occasions. Chicago Town claims the indulgent dessert represents a “natural extension” to its pizza range, and will help drive “incremental category growth” for the brand. Green Isle Foods-owned Goodfella’s, the third largest frozen pizza brand in the UK behind Chicago Town and Pizza Express, has also innovated in this area and won a national innovation award for the launch of Sweet Fella’s, a “delicious dessert pizza” that combines the worlds of pizza and dessert. The Sweet Fella’s range was initially launched in September 2015 with a single chocolate brownie variety, which was described as a stone-baked pizza base topped with chocolate sauce, chocolate brownie pieces, and chocolate chips, and an apple crumble dessert pizza launched earlier in 2016. Goodfella’s owner Green Isle Foods has also extended the dessert concept into other markets, with its San Marco American Style brand launching a similar range in the Netherlands earlier this year.
Frozen Bread
While many consumers do not show an interest in frozen bread, it is common practice for many consumers to freeze bakery or store-bought products to minimize waste. Mintel has identified opportunity for certain brands to leverage this tendency with frozen formats. Although many consumers still collect their bread fresh from the local bakery, convenience is one of the major factors in buying decisions for millennials and will drive frozen bread sales especially with younger consumers. Frozen bread has proven successful further afield in South American countries and European countries are likely to follow suit. While consumer confidence and incomes are improving, a savvy shopping mentality still prevails in the aftermath of the recession.
Providing economical as well as environmental incentives is therefore key to engaging consumers. A greater adoption of frozen formats could provide differentiation in the market and offer a greater level of sustainability for consumers, providing a tangible way to save money. Most bread products do describe on their pack how they are suitable for freezing at home, but a limited number of bread products are actually sold frozen. Scandinavian players such as the Swedish brand Polarbröd have recently established a presence in this area, with its rye bread referencing how it has been frozen immediately after baking to preserve freshness, turning what initially seems like a downside, into a selling point.
Given the popularity of frozen foods in Germany, it is not surprising that the frozen bread market is doing surprisingly well, but new formats like frozen gluten-free bread has the potential to be a profitable niche market in Germany. With recent successful expansion of Dr. Schär into this market, it is clear that Germany offers new business opportunities for small-scale or independent domestic manufacturers in the frozen bread sector. There are not enough product options in this category and the available products are often not of sufficient quality in terms of flavor, texture and taste. The key challenge for the new market players however is the high level of R&D investment required for the formulation and manufacturing of gluten-free frozen bread products as well as securing access to the key distribution channels in the German gluten-free market.
