Fresh & Easy to carry Reed’s beverages
LOS ANGELES Fresh & Easy stores throughout California, Arizona and Nevada will begin carrying selected Reed’s and Virgil’s products in all of the chain’s 159 locations.
“Fresh & Easy is a true innovator, providing the highest quality, freshest food to neighborhoods in the Western United States with stores that are about a third of the size of the average U.S. supermarket,” stated Chris Reed, founder and CEO of Reed’s. “[Fresh & Easy’s] smaller size format and focus on quality and freshness makes this a perfect fit for Reed’s all-natural products. We are very excited to be working with them as they increase their footprint in the United States and position themselves to become one of the top supermarket retailers in the country.”
Gluten-free gains ground
Gluten-free products continue to gain ground in the snack food aisle, but drug chains have been slow to bring in these increasingly popular products.
About 3 million Americans suffer from Celiac disease, and the prevalence of the disease is on the rise. May has been designated Celiac Awareness Month, and as awareness has increased, more consumers are being diagnosed with the condition. Many consumers who don’t have sensitivity are opting for gluten-free products because they think they are healthier.
Sales of gluten-free products increased about 74% from 2004 to 2009, according to the Nielsen Co., and are projected to grow from 15% to 25% per year over the next several years. Packaged Facts projected that gluten-free product sales will reach $2.6 billion by 2012.
Companies that produce gluten-free products said the gluten-free portion of their business is growing significantly. Barbara’s Bakery, which makes gluten-free treats, estimated gluten-free product sales are up 30%. At Natural Foods, sales of its gluten-free snacks surged nearly 74% from 2004 to 2009.
Natural Foods recently introduced gluten-free curls, puffs, baked crisps and multigrains in single-serve bags to fill a niche for gluten-free products in snack-on-the-go sizes, according to Christine Brown, Natural Snacks marketing manager. “We wanted to get into schools with the products and also meet the needs of consumers who wanted to bring these snacks in their lunch or eat them on the go,” she said.
Even mainstream snack and cereal manufacturers are positioning their products as gluten-free. General Mills reformulated rice Chex to be gluten free, Blue Diamond is marketing its new Nut Thins as a gluten-free product and Quaker is touting the gluten-free aspect of its rice cakes.
Packaged Facts data indicated that supermarkets account for 30% of gluten-free product sales. Drug stores are carrying more products — CVS, for example, stocks Lundberg Family Farms rice chips in two flavors — but have no designated section for the category.
“Drug stores have been a bit slower to add gluten-free sections than grocery stores,” said Todd Kluger, VP marketing for Lundberg Family Farms. Kluger said that for retailers a special section isn’t necessary. “They can place gluten-free versions of food on the shelf next to products containing gluten. It’s all about helping a gluten-free consumer have as much choice as possible.”
Restaurants serve up home cooking for consumers
Restaurant-branded products are popular with consumers as people opt to prepare more meals at home. Consumer spending in restaurants in 2009 was down 3%, according to the NPD Group. All segments of the industry, from quick-service restaurants to fine dining, took a hit as consumers ate more meals at home in an effort to save money. The downturn began in summer 2008 and accelerated in mid-2009, according to NPD’s report.
At the same time, the popularity of celebrity chefs and restaurant culture among consumers continues to grow, driven in large part by the dominance of food-related media. There’s been a steady stream of restaurant-branded food products flowing into the market. “We’ve noticed more restaurant brands on the shelves of grocery and other retailers selling food, and the sales levels and trends for these products are significant and growing,” said Todd Hale, SVP consumer shopping insights at Nielsen.
Hale said for the 52-week period ended March 20, sales of a large sample of these brands across food, drug and mass merchandisers (including Walmart) reached $4.6 billion and were up 7.2% versus the prior year.
Dan Simons, principal of VSAG, a restaurant consulting and development firm based in Kensington, Md., believed more restaurant-branded products are on the horizon. “Anywhere a restaurant feels products won’t hurt the brand will offer potential,” he said.
“With fewer people going out to restaurants, chains are looking for new revenue streams, and bringing products to retail channels is a big opportunity,” said Eric Giandalone, director of research for Mintel Foodservice. “It’s also a way for a regional restaurant brand to expand its reach nationally.”
Giandalone said Hooter’s chicken wings and T.G.I. Friday’s mozzarella sticks have performed well across all three channels, since they are strong products that reinforce what those restaurants are known for. Packaged Facts data indicated that the Boston Market and California Pizza Kitchen brands have seen double-digit increases in sales.
One recent entry to the frozen entree category is Unilever’s P.F. Chang’s Home Menu line of eight frozen entrees. Inspired by the chain’s best-selling recipes, the line includes orange chicken, Shanghai-style beef, sweet and sour chicken, General Chang’s chicken, ginger chicken and broccoli, shrimp in garlic sauce and shrimp lo mein. All dishes can be prepared in 13 minutes or less and will retail for between $7.49 and $9.99. The product already is on shelves at Walmart and will be sold at Walgreens.
Rachel Porges, Unilever’s brand manager for the new line, said the company approached the new product line from an ethnic cuisine standpoint, and set out to find the partner for the brand. “P.F. Chang’s, with [its] great reputation for freshness and 200 bistros globally rose to the top of the list. It’s attractive to start a product line from a great brand.”
Giandalone called the product launch “the biggest surprise” in the category due to the restaurant chain’s upscale positioning. “Having the name positions it as a ‘better product,’ and if the line is treated right, it could be a big one. It will have to deliver on the promise,” he said.
Upscale branding and higher pricing has worked for Rao’s line of pastas and sauces, named for the tiny, 10-table, family-owned Northern Italian gem in upper Manhattan in New York City. The restaurant is notorious for an unyielding reservation-only policy and a several years-long waiting list—there is a standing reservation every night for all 10 tables, each “owned” like a condominium by Rao’s exclusive clientele. The brand has had double-digit increases despite top-of-category pricing on its jarred sauces, and has significantly expanded its distribution.
Frozen entrees isn’t the only food category seeing restaurant-branded introductions. Early this year, smoothie chain Jamba Juice launched a line of all-natural smoothie mixes. Available in Razzmatazz, Mango-a-Go-Go and Strawberries Wild—three of the most popular flavors at the chain’s nearly 750 locations—the 8-oz. smoothie package mix contains frozen fruit, nonfat yogurt and an antioxidant boost, and retails for between $2.99 and $3.29. Consumers only need to add fruit juice and blend to create their Jamba smoothie at home.
Starbucks is rolling out its Via instant coffee to food, drug and mass outlets. The company plans to roll out a stream of new products in the next year that debut in Starbucks retail locations and then make the crossover to mass retail outlets. Starbucks CEO Howard Schultz called consumer-packaged goods a “centerpiece” of the company’s growth strategy.