Private Label: Own Brands Go Premium

Private Label

Fruit and vegetables have proved fertile ground for new product development in private label frozen food over the past three years, while drives towards premiumization and greater product diversity indicate a sector in pursuit of consumers with more adventurous and discerning palates, the latest research from Gama reveals.

By Tom Warden

Across the board, private label continues to be a significant force in the frozen food sector, as borne out by the latest data and insights from Gama Compass ™, Gama’s leading platform for innovation. Since 2014, own brand products have accounted for just over 20% of all frozen launches reported on Gama Compass™ in the food space, well ahead of ambient foods – where private label penetration in NPD was recorded at only 12.3% – and only slightly less than the 22.7% of launches in the chilled aisles that were determined to be own brands.

As with products in both the chilled and ambient aisles, mid-range products continue to form the greater proportion of all new product activity in frozen food, with a combined total of only 18% of new own brand launches represented by economy and premium brands. Nevertheless – and even within retailers’ ‘standard’ or mid-range offerings – supermarket chains in Europe and elsewhere are continuing to adopt a diversified strategy of brand launches to target a multitude of occasions, consumer groups and product trends.

Fruit and vegetables in rude health

While private label NPD has been well represented in many of the principal frozen food categories since 2014, the one sector that has been a particular focus of attention for retail firms is frozen fruit and frozen vegetables, as leading chains line up to capture a larger share of the frozen produce market. According to Gama Compass™, own brands made up 47% of all frozen fruit launches since 2014, while also accounting for 29% of frozen vegetable launches in the same period.

Aside from a desire to simply add greater breadth and more diverse options into their product portfolios, one of the key driving forces behind this renewed push into new frozen fruit and vegetable products appears to be changing consumer attitudes and behaviors, especially in relation to health and diet. As a particularly good example, the recent trend towards blended ‘raw’ fruit and vegetable smoothies – as a convenient means to increase fruit and vegetable intake – has led a number of UK supermarkets, including Tesco, Asda and Morrisons, to launch lines of fruit and vegetable blends specifically promoted for creating smoothies. Tesco’s Smoothie Mix line, for instance, comes in the varieties Beet & Berry and Peach Melba & Yogurt, sold in resalable pouches for easy portioning, while Morrisons’ Smoothie Mix is coded by color: Red, Yellow, Purple, Green and Orange. In both cases, the retailer boasts that 80g of the product counts as “1 of your 5 a day”.

Rarely passing up an opportunity to capitalize on in-vogue food fads, retailers have been quick to exploit the many ways that the use of fruit and vegetable ingredients in consumers’ kitchens is changing. For ‘smoothie mixes’ read also ‘alternative carbs’, with launches such as Trader Joe’s Organic Riced Cauliflower – hot on the heels of leading brands such as Green Giant – revealing the new role now enjoyed by frozen vegetables as low-carbohydrate substitutes for rice, potatoes and other staple foods. Other retailers, meanwhile, have focused on the health benefits of steam cooking, with both South African retailer Woolworths and UK chain Asda launching ready-portioned vegetables, sold in plastic pouches, designed to be steamed directly in the microwave.

Retailer Iceland leads the premiumization charge

Where some retailers are adapting their fruit and vegetables ranges in a bid to reap maximum rewards from evolving dietary fads, others are instead making a determined push towards higher-end and more sophisticated foods. This is particularly the case in categories such as ice cream & desserts, ready meals & prepared foods and meat, fish & poultry, where premium private label has represented 2.3%, 2.5% and 2.7% of all NPD recorded on Gama Compass™ since 2014, comparing favorably with the own brand foods as a whole.

On this emerging ‘premium’ scene – and with an eye on Europe in particular – leading frozen food specialists such as UK-based Iceland and France-based Picard are emerging as significant players, demonstrating efforts by such retailers to cast off frozen food’s sometimes downmarket image. Launching his firm’s new Luxury brand in September of last year, for instance, Iceland chief executive Malcolm Walker described his mission to tackle “the huge snobbery about frozen food being low quality”. In a similar bid to cast its product lines in a more sophisticated light, around the same time Iceland also unveiled a partnership with pizza restaurant chain Pizza Express, stocking a range of Pizza Express branded frozen pizzas, pasta meals, salad dressings and ice cream in a bid to convey a sense of ‘restaurant quality’.

Meanwhile – as Gama described when it reported on developments on the frozen food scene in France – the French frozen specialist Picard itself has been pushing similar notions of ‘restaurant quality’ through launches such as its Mini Sausages, Lentils and Mustard Sauce which invited consumers to “imagine being at the bistro”, and Picard Pasta Bake with Spinach, Leek and Comte Sauce which invoked a restaurant setting with its use of ‘chalkboard’ graphics.

Meat gets an exotic flavor

Premium, meanwhile, has also been an observable trend in meat, fish & poultry NPD – especially with efforts to replicate the world of fine dining – but the category also bears comment for its relatively strong activity at the lower end of the price spectrum.

In the luxury segment, premium cuts of meat and more exotic seafoods such as lobster appear to be gaining ground, especially through products presented as gourmet canapes or sophisticated dishes for special occasions: products such as Uncooked Lobster Tails from Iceland’s aforementioned Luxury line, as well as new additions to Spanish frozen specialist La Sirena’s Premium line, including Scallops in Champagne and Norwegian Lobster & Scallop Pots are giving retailers’ seafood ranges a more upmarket feel. Iceland, meanwhile, is among the retailers catering to consumers’ taste for more exotic meats, such as through its Exotic Meat Feast featuring kangaroo and crocodile burgers and ostrich fillets, while, in Germany, Rewe has recently expanded its upmarket Feine Welt line to include a Venison Goulash with Dark Beer Sauce, with the meat itself being sourced “from free range European red deer”.

At the other end of the scale, by contrast, consumers’ desire for meat and fish products on a budget has manifested itself in increased NPD within retailers’ value ranges, particularly in ‘staple’ items such as breaded fish and chicken joints. Altogether, economy private label accounted for 4.6% of all frozen meat, fish & poultry launches recorded on Gama Compass™ since 2014, compared to just 1.5% for frozen food as a whole in the same period.