Break the Ice for Profit
By D. Gail Fleenor
Grocers weigh in on the best ways to pair complementary products in this challenging segment.
Cross-merchandising is fundamental to grabbing extra profit through increased impulse sales opportunities. Salad dressing in the produce case, stir-fry veggies in the meat case, wooden spoons for sale almost anywhere — all generate easy additional sales. The frozen food department, however, bears burdens most other departments do not face in cross-merchandising.
"Frozen is an extremely difficult category to cross-merchandise," notes Neil Stern, partner, McMillan & Doolittle, a Chicago-based retail consultancy. "It is equipment-dependent, of course, and space is finite. The best examples almost always involve taking products out of their traditional home and bundling together with similar products, frozen or nonfrozen."
What's a frozen food category manager to do? Progressive Grocer asked several top grocers to give their opinions about cross-merchandising frozen foods and describe promotions they use for extra sales.
One popular way to
cross-merchandise frozen items is alongside complementary frozen options. For stores that have the case or door space, this can be a successful venture. Joe Dortch, frozen food and dairy category manager for Richmond, Va.-based Ukrop's Super Markets, says he makes cross-merchandising recommendations for frozen to his stores quite often.
"Within each weekly merchandising plan, I typically recommend that certain complementary frozen items be merchandised together," Dortch says. "In most cases, by doing this, I am trying to recommend a quick meal solution to the customer. To me, this makes for an easier shopping experience and also provides the customer with some meal ideas that he or she may not have thought of before." Ukrop’s operates 28 retail food stores, Joe's Market (a regional specialty market) and a central bakery and kitchen.
Dortch thinks cross-merchandising frozen can be as strong as it is for any other department. He points out that in all cross-merchandising across the store, there is only a small percentage of customers that want, need or like both of the products being cross-merchandised. "My experience is that the same holds true in frozen," he says. "This doesn't mean you shouldn't try to cross-merchandise, but I do think it means that you can't expect massive sales lifts on both items just because they work well together."
Vendors suggest cross-merchandising to Dortch "all the time," he says. "The larger frozen companies, like Heinz, ConAgra and Nestle USA, are always recommending opportunities."
These promotions are not only within their own brand portfolio, according to Dortch, but also with brands other than their own that would make a good match, such as Stouffer's Lasagna and Brand X Garlic Bread. "Stouffer's doesn't own a garlic bread brand, but they think that if they display their lasagna with garlic bread, they will sell more." Other companies, like Heinz, typically recommend displaying several of their brands together in a sort of "family event," he explains. "It might be a display that shows all the frozen products available from Heinz that you might want to use to feed your family and may not have known existed."
Pizza, dinners and entrees; frozen vegetables; garlic bread and the meal solutions category such as Bertolli all lend themselves to this type of promotion, says Dortch. "Plus ice cream — you've got to have dessert!" He believes frozen can be cross-merchandised year-round because no matter the season, customers are pressed for time. "Cross-merchandising, hopefully, provides quick ideas and cuts down on preparation time for consumers," he says.
Retail consultant Stern suggests taking the ends of freezer cases and creating solution-oriented areas. "Creating a Super Bowl theme of appetizers, pizza, etc. can be very effective," he says.
The Cold Facts
Portable freezers provided by vendors would seem to be a perfect cross-merchandising vehicle. The portable cases are helpful when shelves can't hold enough product during holidays and seasonal items are in and out, or can serve as end caps to tie into other departments, according to Dave Gaither, frozen food category manager, center store department for St. Louis-based Schnucks. He uses the freezers to cross-merchandise single-serve ice cream treats from frozen stations near checkout. Stern says spot freezers are also useful near the dairy department to create breakfast-themed promotions. Schnuck Markets, Inc. operates 105 stores, including five Logli stores, in Missouri, Illinois, Indiana, Wisconsin, Iowa, Tennessee and Mississippi.
Liability can be an issue with portable freezers. "You have to think about what happens if they get unplugged," says Gaither. "Vendors all think if they have an extra display, they will sell more, but that's why we have frozen shelving. Extra cases can junk up a store." One of the biggest issues with spot freezers is energy cost. "We don't use these cases a lot because the freezers are expensive to run. It takes more energy to run them, and you have to take this into account," he says. "Cross-merchandising within the frozen food department is the easiest method and most economical."
Another option for cross-merchandising is bringing products from other departments into frozen. Gaither is testing a cross-merchandising system on the doors of his frozen departments. "We are developing suction-cup holders for items such as private label ketchup on the french fries door, or coffee with sweet goods," he notes. Gaither is testing the door cross-merchandisers to make sure they will hold the weight of paired items. "For example, we would like to put Parmesan cheese on the pizza door," he explains. "The plan at this point is to rotate products with the seasons and incorporate a lot of our private label brands."
"A large percentage of the frozen aisle can be cross-merchandised with other departments," says Chris Banta, VP, grocery center store merchandising for Indianapolis-based Marsh Supermarkets. The regional Midwest food retailer operates over 100 stores throughout Indiana and Ohio. "Due to current restrictions and available freezer door space, we are limited in our ability to do extensive cross-merchandising." He explains that, throughout the year, his company asks its stores to display tie-in items from other departments near certain products in the frozen aisle.
Marsh works with vendors on cross-promotions, as do most supermarkets. "Heinz has an annual program that combines their grocery lines, like ketchup with Ore-Ida Potatoes and their line of frozen snack items," notes Banta. The grocer uses cross-merchandising during Frozen Food Month in March, and the Heinz promotion in fall and the November/December holiday season. "Honestly, we try to make it work whenever possible if the tie-in can drive additional sales," he says.
Giant Eagle has also used cross-merchandising of frozen within the frozen department. "We’ve done 'Buy two Bertolli dinners and get Ben & Jerry’s ice cream' within the aisle," says Diane Roberts, senior director, frozen food, for the Pittsburgh-based chain. "Results were okay but not great." Roberts prefers to run manufacturer promotions such as one she has coming up with Unilever: "The customer buys a certain dollar amount of products and gets dollars back, which they can use instantly when shopping or on the next order," she explains. Giant Eagle operates over 150 corporate stores and over 60 independently owned supermarkets in western Pennsylvania, Ohio, north central West Virginia and Maryland.
Publix Super Markets also cross-merchandises within its frozen food aisles, according to Maria Brous, company spokeswoman. "For our ice cream sections, we are able to place a j-hook on the freezer door and offer customers ice cream scoopers," she says. "We are always looking for ways to remind customers of items that may be needed to complete or complement any meal or dessert." The Lakeland, Fla.-based chain of over 1,000 stores sometimes displays bananas near the ice cream section to remind customers to buy the fruit needed for banana splits.
Charles Willson, frozen category manager for Lufkin, Texas-based Brookshire Brothers, says his company cross-merchandises frozen foods only for ads or demos. "If we are running frozen vegetables on the front page of our ad, we will tell our stores to merchandise lasagna, garlic bread, etc. for the display." Ice cream with cones or toppings work well together, he notes, as do desserts and whipped topping. The key to most cross-merchandising, says Willson, is seasonality. Brookshire Brothers has over 70 locations in eastern Texas.
Winn-Dixie has developed vendor partnerships to offer discounted pricing on one frozen item when customers purchase a paired item, according to Robin Miller, company spokeswoman for the Jacksonville, Fla.-based grocer that operates over 500 stores in the Southeast. "Typically, we try to make each frozen display a meal plan with accompanying items such as Stouffer's lasagna with garlic toast, fish and chips, assorted appetizers during major sporting events, etc."
One beneficial attribute of frozen, says Miller, is the ability to cross-merchandise year-round. "As customer demand for meal variety, quality and long shelf life grows, we find that frozen foods always work as a purchase solution for our shoppers."
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