With Few Exceptions, Demand for Frozens
Strong in Canada Despite Great Recession
By MYRON LOVE, QFFI Correspondent

Chicken Stir Fry is part of the Hearty Bowls line under the Swanson range distributed by Pinnacle Foods in Canada.

Canadians want meals that are convenient and quick – but made with “real ingredients.” Processors offer more authentic products with simple recipes and full disclosure.

As recession-minded consumers have tightened their wallets, but not necessarily their belts, visits to restaurants – with the exception of value-priced QSRs – have fallen and trips to supermarkets among shoppers in North America have risen during the past year or so.

Steve Lutz, executive vice president of the Perishables Group, summed up the situation in no uncertain terms at a conference during the recent Boston Seafood Show, where scores of Canadian companies were exhibiting frozen fish and seafood products.

“Restaurants have been decimated in 2008 and ’09, as consumers have [opted for] high quality dining experiences at home as they sought more value for money,” he stated.

Lutz added that while shoppers are purchasing more frozen foods than was the case prior to the economic downturn, this does not necessarily mean that the rising tide of purchases is lifting all categories in the freezer case.

Dan Hua, vice president of marketing at Pinnacle Foods Corporation, reported that the single-serve frozen dinners and entrees category actually declined by 7% in units in Canada during 2009, as consumers cooked more at home to save money during what many people are now calling the “Great Recession.”

“Because of the economy, consumers are tending to look for value,” Hua said. “We are well-positioned to meet this need, as both of our Hungry-Man and Swanson Dinners brands deliver great value for the money. We actually saw our market share grow during this period.”

He noted that some “better-for-you products” did well during 2009, with ConAgra’s new Healthy Choice Steamers taking market share from Stouffer’s Lean Cuisine and Michelina’s Harmony. Swanson Hearty Bowls, which have a line-up of four better-for-you SKUs, grew by 50% over the course of the year, added Hua.

Laura Jones, senior brand manager for Dr. Oetker in Canada, reported that the outlook for the frozen pizza category remains very positive.

“The unfortunate downturn in the economy in 2009 resulted in a change in consumer habits, whereby occasions of eating out of the home decreased while in-home eating rose in frequency,” she said. “Frozen pizza benefited significantly from this change, with all segments in this category experiencing strong growth. We expect that the frozen pizza category will continue to grow as this shift is likely to continue.”

Citing the Nielsen Market Track Frozen Food Report from Aug. 29, 2009, Jones pointed out that frozen pizza currently ranks third in importance in total frozen food at $445 million in annual sales in Canada. It also remains one of the fastest growing segments.

A Nielsen report from Nov. 21 reveals that all segments are posting positive results, with rising crust up by 14%, thin crust advancing by 13%, and regular crust up eight percent.

“Dr. Oetker’s thin crust frozen pizza offerings, Ristorante and Casa di Mama, are experiencing double digit sales growth,” stated Jones. “The thin crust segment now sells more units than the rising crust segment.”

Innovation in the category is accelerating, she added, with all major manufacturers introducing new offerings to meet the growing demand for items in this category from consumers.

Dr. Oetker brings its Ristorante Mozzarella, Goat Cheese and Cherry Tomato Pizza to consumers in Canada.

“With pizza meal assortments expanding every year, retailers should allocate more space to this growing segment,” she suggested. “This can be achieved either at the expense of pizza snacks (where sales are declining) or other frozen categories. As the third most important segment in the frozen section, total pizza is currently under-spaced within the permanent frozen cabinet, with a space-to-sales index of only 76.”

Jones reported that Canadian consumers are increasingly looking for lower levels of salt in their packaged goods. As such, Dr. Oetker has recently cut the amount of sodium in a number of its pizza SKUs, and is looking for ways to reduce salt content even more.

TNS Survey Results Lead to Recipe Changes

A TNS Canadian Facts survey of 1,000 adults in Canada, commissioned by McCain Foods last November, found that 71% of respondents regularly purchase frozen convenience foods, with 20% claiming to buy such products once a week or more.

Younger Canadians (in the 18-24 age group) and those with household income of $80,000 and up bought the most frozen convenience foods – 88% and 75%, respectively, according to the survey – while 59% of Quebecers claimed to regularly purchase frozen convenience foods.

Almost half of the respondents (47%) said that they were “extremely likely or very likely to serve frozen convenience foods to their families when pressed for time,” while 58% claim they are more likely to consume them when time is short.

The survey also revealed that Canadians prefer so-called “real ingredients” in their frozen food. Nearly 90% would be more likely to buy frozen convenience foods if they were made with “real ingredients.” More than two-thirds of respondents claim to read the ingredient list (70%) and nutritional labels (71%) on frozen convenience food packages, and more than 80% of Canadians are avoiding foods that have excessive ingredients that look more like chemical names than real food.

Finally, 86% of respondents want food companies to be more transparent about the ingredients in their products.

In response to the polling results, Florenceville, New Brunswick, Canada-headquartered McCain Foods announced on Jan. 13 that the company is changing its frozen food recipes to utilize the same kind of simple ingredients that people typically use at home when making meals.

“With the McCain It’s All Good™ commitment, our products will be great tasting, made with simple ingredients, and be nutritionally sound,” said Fred Schaeffer, president and ceo of McCain Foods (Canada). This commitment is a first in the frozen food category.”

He added: “Instead of asking ‘What’s for dinner?’ Canadians are starting to wonder ‘What’s in dinner?’

We’ve heard them and are changing the way we make our products to meet their needs. Now, when shoppers turn over a McCain pizza box they will see simple ingredients recognized from their kitchen. And if we have to use an unfamiliar ingredient, we will explain what it is and why we use it.

“The McCain Culinary team is working tirelessly to develop each recipe to ensure the taste is as good as or better than ever,” added Schaeffer. “Not all McCain products are there yet. We are challenging our employees, partners and others to help us as we fulfill our commitment with each of our products.”

Full disclosure of ingredients and complete instructions for preparation are now found on the backs of packages containing McCain Rising Crust Crescendo Pizza.

Stouffer’s Bistro line features three cheeses in this stuffed crust Pizzeria offering.

The first McCain offerings to be launched under the McCain It’s All Good™ banner are pizza items. The New McCain Purely Potatoes™, which contain 100% real potato, are available in two varieties – Potato Chunks and Sweet Potato Chunks – that can be conveniently mashed or roasted.

Other products under the initiative include McCain Rising Crust Crescendo® Pizza (Pepperoni, Deluxe, Four Cheese, Roasted Chicken Deluxe, Steak and Mushroom Melt); Thin Crust International Pizza (Pepperoni, Canadian, Parisian, Sicilian, Texas Chicken); Premiere Traditional Pizza (Pepperoni, Deluxe, Three Cheese and Deli Lovers); and Deep ’n Delicious® Mini Pizzas (Pepperoni, Deluxe, Three Cheese, and Deli Lovers).

Vikram Bawa, Nestlé Canada’s director of marketing for frozen prepared meals, told Quick Frozen Foods International that new products especially targeting on-the-go consumers have been launched under the Stouffer’s Bistro brand. The objective, he said, is to “leverage the growth of snacking in quick service restaurants (annual sales top $4.5 billion in Canada), provide retailers with appealing choices for busy consumers, and bring foodservice quality products to the frozen food aisle in the grocery store.”

Bawa added: “The driver is that some of the younger consumers’ (those aged 18-35) eating habits are changing, and the notion of ‘tiding me over’ is becoming more relevant than ‘snacking.’ Eating is becoming less structured and food is being consumed as fuel, which is essentially to sustain them from one activity to the next. These consumers are busy and have little time to sit down and eat. Hence our on-the-go’ eating occasion brand is emerging in the market.”

Stouffer’s began tapping into this trend with the introduction of Bistro Crustinis in 2005, followed by Bistro Paninis in 2008, to bring more variety and formats to the forefront. Most recently, the North York, Ontario-based company rolled out Bistro Melts and Bistro Pizzeria to further leverage the trend for on-the-go consumption.