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Growth in chilled and frozen pizza

By: Glen Wells, Regional Director, Innova Market Insights (Australasia)
28 September, 2010

The pizza market continues to be dominated by the foodservice sector in most countries, but retail sales of chilled and frozen lines are showing good growth.

This is a result of ongoing product and promotional activity, often focusing on producing restaurant-quality options for in-home consumption. Recent launch activity recorded by Innova Market Insights has shown a focus on brand extensions, promotional tie-ins, authentic- and traditional-style products and healthier alternatives. 

However, the award for the most unusual introduction so far in 2010 probably has to go to Kellogg's for its Eggo Real Fruit Pizza extension to its Eggo frozen breakfast brand in the USA.

The Innova Database has recorded rising launch numbers for retail packaged frozen and chilled pizzas in recent years, with global introductions in the first 8 months of 2010 already nearly 90% of the total for the whole of 2009. As might be expected, the most developed convenience foods markets of the USA and Western Europe have dominated launch activity, accounting for over 80% of the total recorded so far in 2010.  

The USA accounted for about one-third of launches recorded, and activity focused heavily on frozen pizza, where sales are worth about US$4bn a year, in a total pizza industry worth closer to US$40bn.
Nestlé's acquisition of Kraft's North American frozen pizza business in early 2010 has given Nestlé between 35% and 40% of the market and five of the top 10 brands. 

Interesting product activity recorded by Innova in the first half of 2010 included the translation of the 100-calorie-pack concept from the biscuits and snacks market to the frozen pizza sector with the launch of Nestlé's Digiorno 200-Calorie-Portion Pizza in two flavour variants. 

Rival Schwan's initiatives focused on offering traditional pizzas using a fire baked crust concept, which included Red Baron Fire Baked Crust pizzas and, moving a step further, Freschetta Brick Oven Fire Baked Crust pizzas. Heinz also emphasised the traditional authentic nature of its Weight Watchers Smart Ones pizza with the launch of an Artisan Creations sub-range.

Meanwhile in Europe, Germany and the UK have the most developed retail pizza markets, although they differ in the dominance of frozen pizza on the German market, while chilled and frozen sales are much more evenly matched in the UK. One of the most interesting aspects of launch activity in the UK market so far in 2010 has been the high level of branded activity in the chilled pizza market, which is traditionally, as with the UK chilled meals market as a whole, dominated by retailer own brands. 

The Pizza Express restaurant brand sold through retail outlets has been extended further in 2010 with four traditional variants and two lighter products. An interesting development is that two new brands from other sectors of the food market have been extended into chilled pizza in the second half of 2010.

The first was Unilever's meat snacks brand Peperami in a microwaveable variant positioned as a convenient snack or light meal; the use of new packaging technology is intended to produce the same crusty base as traditional oven-baked pizzas. It was followed just a few weeks later by the launch of a range of chilled pizzas using the Tabasco hot sauce branding. Both of these product ranges are being made under licence by Bakkavor, already a leading player in the chilled pizza market via its production of supermarket own brands.

In the frozen pizza market, Dr Oetker, owner of the Chicago Town brand since it purchased Schwan's European frozen pizza interests in early 2009, has introduced a new range called Casa di Mama, as well as a special X Factor Pizza under its Takeaway sub-brand to celebrate its sponsorship of the TV show of the same name. 

Earlier in the year it launched a Chicago Town Footie Feast pizza for UK fans in time for the football World Cup, while in Germany it launched a South African Chakalaka Style Pizza for the same event. 

Frozen pizza dominates the German market and is largely a two-horse race between Dr Oetker and rival Wagner, which is now majority owned by Nestlé. Both have focused on premium quality and authenticity in 2010, with launches recorded on Innova including Wagner's additions to its premium Die Backfrische and traditional Steinofen (stone baked) ranges and Dr Oetker's launch of a Steinofen Tradizionale range.

According to Lu Ann Williams, Head of Research for Innova Market Insights, the retail pizza market has benefited more than most from the financial downturn, offering an attractive option in times of increased financial pressure, with consumers able to buy in advance for social nights at home as a cheaper alternative to home-delivery, take-away and eat-in in restaurants. 

She further contends that this has clearly been reflected in new product activity, with a focus on offering authentic, restaurant quality products suitable for sharing with family and friends that can be purchased on impulse, in advance or in anticipation and kept until required.

For further information on the Innova Database, the representative for Australia and New Zealand is Glen Wells (Glen.Wells@innova-food.com.au).

Source: Innova Market Insights (Australasia)

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