Supermarket GROCERY Business: Cool ideas in frozens

It's one of those sultry July nights when it's just too hot to cook, so diners are streaming into ike, a popular restaurant on Second Avenue in the East Village. The menu includes such delicious fare as crispy coconut chicken with curried rice and mango-roasted pepper salsa ($12); whole wheat goat cheese ravioli with spinach, tomato, white wine, and basil ($11); and spicy seared tuna in coconut-wasabi sauce, and sauteed baby bok choy ($17).

But the most popular items on the menu are the classic fried chicken, mashed potatoes, and sweet corn; the Angus beef Salisbury steak with mushroom and onion gravy, green bean and carrot medley, and mashed potatoes; and the roast carved turkey breast with gravy, stuffing, and mashed potatoes with carrot and snap peas medley. At $6 each, these entrees are a steal--courtesy of Swanson. The restaurant lists them on the menu simply as "Classic TV Dinners."

Yes, trendy Manhattanites have discovered what the heartland has known for years: TV dinners make for mighty fine eating. But judging from the glacier that is slowly taking over the Swanson case at the neighboring Met Foodmarket, they still haven't quite figured out that the same meal can be had at home for about half the price.

TV dinners trace their roots back 50 years to 1953, when Swanson introduced its first TV dinner—turkey, cornbread dressing, and gravy; buttered peas; and sweet potatoes. The privately held company was eventually acquired by Campbell Soup Co., and today is owned by Pinnacle Foods Corp. of Mountain Lakes, N.J. Turkey remains among Swanson's bestsellers, along with fried chicken and Salisbury steak. The brand is so much a part of American culture that in 1986 its aluminum TV dinner tray was inducted into the Smithsonian Institution. An even bigger honor was bestowed in 1999, when Swanson received a star on the Hollywood Walk of Fame.

In recent years TV dinners—manufacturers now prefer the term "frozen meals"—have undergone a radical change, bringing them out of the rabbit-ears era and into the high-definition plasma screen age. Gone are the aluminum partitioned trays and, in most instances, the brownie dessert. Swanson eliminated desserts in 2001, after finding that most consumers no longer follow a meal with dessert, preferring to eat it later in the evening, and want a bigger portion of meat instead.

Frozen meal solutions

In are individually boxed family-size and single-serve microwavable and/or oven-ready entrees featuring braised short ribs, chicken Marsala, grilled white meat chicken with penne in basil cream sauce, angel hair pasta and seafood, vegetable lasagna, and side dishes including twice baked potatoes, sweet potato casserole, and spinach soufflé.

"What we've seen in the evolution of the TV dinner is a change from the traditional tray with compartments to frozen meal solutions that are ready-to-bake full meals with a center dish, as well as side items that are microwavable and/or oven-ready," says Brian Frey, marketing assistant at Giant Eagle in Pittsburgh.

Look for low-carbohydrate offerings to be the next big trend. At last month's Fancy Food Show in New York, one of the biggest buzzes centered on the Mike's LowCarb Gourmet booth, where the six-month-old company was promoting its line of low-carb frozen entrees, including vegetable lasagna (14g net carbs), roasted catfish (10g), and old-fashioned meatloaf (13g).

In a new twist on the TV dinner, buyers from the QVC television shopping network stopped by the booth to investigate the possibility of selling the line on the air. LowCarb Gourmet was also highlighted by Good Morning America when it singled out about a dozen products out of some 1,000 booths at the show, giving the brand about a minute of airtime.

"We meet the requirements for all of the popular diets, including Atkins," says Mike Caruana, president of Destin, Fla.-based LowCarb Gourmet. The meals achieve low carbs by reducing the amount of sugars and starches.

"We did extensive market research with focus groups and found that more consumers hated the taste of diet meals, which is one reason why they could not stay on a diet," says Steve Goodman, director of sales and marketing. "We found that men in particular found diet meals to not be very fulfilling, so when we went to recipe development, we created a line that keeps a certain amount of transparency between us and gourmet or restaurant-quality food, so people don't know they're eating diet food, even though they're on a diet."

The meals retail between $5.99 and $6.99, while the cheesecakes range from $12.99 to $14.99, depending on the variety. "We have plans to further develop both lines, add more SKUs and more flavors, and possibly go into other aspects of low carb as well," Goodman says.

Oriental express

According to ACNielsen, for the 52 weeks ended May 17, 634.6 million frozen dinners were sold, a 7.1 percent increase over the 592.5 million during the same period in 2002. Sales reached $7.4 billion, a 2.7 percent increase over last year. Dominating the field are ConAgra, the industry leader with its Banquet, Marie Callender's, and Healthy Choice brands; Swanson; Nestlé's Stouffer's; Heinz with Boston Market; and Luigino's Foods with the Budget Gourmet and Michelina's. There are also scores of regional, organic, and ethnic brands fighting for shelf space. One of the fastest-growing subcategories is two-food Oriental dishes, which exhibited a 21.4 percent unit increase to 17.3 million boxes, coming off a 95.5 percent increase in 2002.

The Oriental category is really set to take off, now that Kahiki is introducing its Bowl & Roll Combo line. The 12-ounce meals consist of a 9-ounce entree and three-ounce egg roll packaged in a patented tray with a susceptor sleeve that crisps the egg roll in the microwave. They retail for $3.99 and are available in six SKUs: General Tso's Chicken, Sesame Orange Chicken, Tropical Sweet & Sour Chicken, Teriyaki Chicken, Beef & Broccoli, and Mango Chicken. "We also include a little packet of sweet and sour sauce, which was our restaurant's signature sauce," says Alan L. Hoover, s.v.p., sales and marketing, of Columbus, Ohio-based Kahiki Foods, Inc.

Kahiki traces its roots back to 1961, when the Kahiki Supper Club opened in Columbus. Famous for its egg rolls, the Polynesian restaurant got into the frozen food business when executives from Kroger's Columbus KMA suggested that owner Michael Tsao manufacture the appetizers and sell them in Kroger stores. The egg rolls were initially made in the basement of the restaurant, named one of the Top 100 restaurants of the 20th century, as well as the most beautiful Polynesian restaurant in the world, thanks to its soaring peaked roof, actual rain forest, tropical aquariums, carved tiki gods, and hula dancers. Tiki gods may be able to garner dining awards, but they can't stop progress, and on Aug. 26, 2000, the Kahiki Supper Club was torn down to make way for another Walgreens.

Thankfully Kahiki lives on in the frozen food aisle. In September, the company will move from a 22,000-square-foot factory to a 119,000-square-foot facility in neighboring Gahanna, which Hoover believes will be the largest Asian food manufacturing facility under one roof in the United States. "As a small company, it's always tough for us to get shelf space, but where we feel we really have an edge is on the quality of our product and our authenticity," Hoover says. "A large number of our employees and our president are of Chinese descent. You can't get more authentic than that."

Indian cuisine

Consumers seeking authentic Indian foods are asking for products from Deep Foods, the manufacturer of the Deep, Curry Classics, and Green Guru brands. Products include Chicken Curry, Kofta Curry with Rice, Paneer Tikka Masala, and Channa Masala.

Deep was founded in 1977, providing mom-and-pop Indian stores with snacks and ice creams, and eventually expanding to frozen foods. A visit to the New York Fancy Food Show landed the Kings Super Markets account, giving the company a foothold in the traditional supermarket industry. Today the company has more than 65 SKUs of frozen Indian dishes. "I would say 80 percent of our customers are still Indian," says Archie Amin, v.p., marketing at Deep Foods in Union, N.J. "But the mainstream stores are expanding their ethnic offerings because of the growing Indian population and because the taste profile for mainstream clients has changed somewhat. Everyone has their Italian night and their Mexican night, and I think, little by little, they're having an Indian night, as well."

Most Deep products are packaged in one-dish, microwavable boxes. "What you want to do, if you want an Indian night, is take a bag of samosas, a box of a chicken item, and a pilaf, and line the boxes up on the table and make a buffet out of it," Amin says.

Deep's Green Guru line is all-natural vegetarian and vegan, meaning it contains no animal byproducts. It's getting some competition from Amy's Kitchen, which has just introduced Amy's Indian Mattar Paneer.

"This is our first Indian meal, and it is just flying," says Andy Berliner, president of Amy's Kitchens in Santa Rosa, Calif. "It is one of the fastest-growing segments and we will be introducing a second one in a few months."

Berliner says Amy's sales in mainstream supermarkets have been growing about 25 percent this year, and the company recently introduced several gluten-free products, including rice macaroni and cheese, rice crust pizza, and rice pasta garden vegetable lasagna.

Amy's has only one traditional multi-compartment offering, its Country Dinner, a vegetarian Salisbury steak with potatoes, string beans, and dessert. "With our entrees, we have been focusing more on the bowls and on whole meals, which is a main course and vegetables," Berliner says.

That's also been the focus of private label, which has received a renewed emphasis of late. In February, Albertsons introduced its new Essensia line of frozen main meal entrees and side dishes. Packed in sleek sliver boxes, Essensia is made in Canada and includes braised short ribs in a Polynesian sauce, fully cooked hamburger patties, lasagna, ravioli, and side dishes like twice baked stuffed potatoes and spinach soufflé.

Giant Eagle is marketing its frozen dinners under the Homemade Helpings sub-brand. "The brand title is a play on words," Frey says. "'Homemade' gives the connotation of quality ingredients, and 'Helpings' can mean side dishes, as well as the convenience of saving time in the kitchen to allow for more quality family time."

The line includes center plate dishes, such as macaroni and cheese, meatloaf, lasagna, and vegetable lasagna, as well as complementary sides like spinach soufflé, sweet potato casserole, and mashed potatoes. "We pick dishes and flavors that are comfort food that consumers are used to and have either been brought up with or have prepared in the past," Frey says, adding that Giant Eagle works closely with its vendors to create line extensions. About two to four new items are added to the frozen line annually.

"The biggest trend is offering a full, convenient meal so we can get back to the traditional setting where the family will eat dinner together," Frey says. "You don't have to spend time slaving over a hot stove. You just pop it into the microwave and spend more time catching up with the family."

Now that concept is sure to score blockbuster ratings.
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