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    Be a Cold Warrior in Refrigerated Category Management

    Effective merchandising of chilled items involves zeroing in on shoppers’ needs

    By Bridget Goldschmidt, Stagnito Business Information
    Fortun Foods, a maker of refrigerated soups and sauces, recently introduced revamped packaging and a display rack

    With more consumers than ever shopping the perimeter departments of the supermarket, refrigerated foods of all kinds stand to benefit, but making sure that store customers have easy ideas on hand for how to use products is key.

    “We’ve done a lot of work around occasions and dinner to better understand what goes together,” notes Jeff Mayrose, senior director, category leadership at Omaha, Neb.-based ConAgra Foods, manufacturer of a range of refrigerated and frozen products. “Our goal is to help our customers create solutions for consumers. For example, we recently paired Marie Callender’s frozen pies with [refrigerated] Reddi-wip. It’s a great example of us reaching across different departments to create a customer solution that wouldn’t have existed in solely one department or the other. The pairing is a natural one, and has been extremely successful in driving increased basket size per shopper, increasing cross-purchase and providing simple solutions for the shopper.”

    When it comes to cross-promotions, ConAgra is determined to think outside the box. “Old category definitions and locations can be limiting and prohibit incremental sales,” asserts Mayrose. “It’s important to include refrigerated foods where people expect to find them and where they’ll buy them. For example, Reddi-wip could be included in the coffee aisle, near hot chocolate, by fresh fruits and refrigerated pudding, etc.”

    Of course, this sort of merchandising can be applied across the company’s refrigerated product portfolio. “Creating merchandising options like pairing items on shelf around occasions or based on shopping behavior [is] critical,” he says. “We will also be focused on developing optimal product shelving locations for healthy, natural or organic items. This will not only help the retailer drive sales, but also provide solutions to the shopper and aid the shopper in finding the foods they are seeking.”

    Pure and Simple

    ConAgra’s plan to focus on healthy, natural and organic dovetails with the growing trend toward wholesome, clean-label products. “Consumers are looking for options with simplified ingredient statements,” affirms Mayrose. “For Reddi-wip, real dairy cream is our No. 1 ingredient. Some other whipped toppings are made with hydrogenated oils.”

    “Demand has never been higher for real foods [and] high quality standards,” notes Mary Shepard, director of sales for Kirkland, Wash.-based Fortun Foods, a maker of refrigerated soups and sauces for retail and foodservice. “Real foods equal fresh foods — not shelf-stable or frozen.” Shepard points to the fact that Fortun offers “the best refrigerated shelf life in the industry. No shrink, no waste, no short shelf life. We provide a double tamper-proof container and seal in our fresh ingredients.”

    The reason that freshness is so critical in supermarket refrigerated foods, she contends, is that such items “are competing with … restaurant fare, [and] many consumers are choosing to go to their grocery store versus a restaurant. The retailers have stepped up their game. It’s a win/win destination for shopping: and delicious meals to take home.”

    Product ingredients are also among the top priorities of Austin, Minn.-based Hormel Foods, where, according to Mark Thompson, director of category management for consumer products sales, “our approach is shopper-based. We focus on our categories that fit within our company’s growth pillars of healthy/holistic, on-the-go and multicultural. A good example of this is refrigerated snacking, where we have focused on the snacking needs of consumers and have built actionable strategies that we are sharing with retailers.”

    Hormel’s approach works well with this particular segment, Thompson maintains, because “changes in the way people are eating, such as smaller meals and snacks as meals, have brought shoppers to the center of the discussion.”

    As a result of its category management endeavors, Hormel has found “that retailers are embracing our snacking insights, and many retailers are developing refrigerated snacking destinations as part of their packaged meats wall,” Thompson points out.

    The Whole Package

    Speaking of animal proteins, a look at one major supplier reveals an all-encompassing category management strategy.

    Smithfield Foods has developed a comprehensive approach to supporting our retail partners to continue to drive sales and profit growth from refrigerated meat,” notes John Pauley, EVP of retail sales for the Virginia-based meat-processing company, the leading supplier of packaged pork in the United States. “Fueled by extensive consumer and shopper research, we have developed winning products and package sizes geared to meet the evolving needs of shoppers, and have helped retailers optimize their assortments. We support all these efforts with strong marketing programs. This integrated approach benefits retailers as well as our brands.”

    The strategy has made Smithfield Foods “one of the fastest-growing consumer packaged goods manufacturers in the country,” says Pauley, adding that the company teams “with many regional and national retailers to improve refrigerated meat case assortments and share shelving best practices. Marketing and promotional programs of Smithfield Foods’ brands, such as Smithfield, Eckrich and Nathan’s Famous, help to drive traffic to the stores as well.”

    Pauley believes the company’s breadth of products makes it “uniquely positioned to leverage the power of pork across all relevant categories, providing our customers with industry-leading sustain-ability, traceability and high-quality programs.”

    Delivering in Dairy

    The burgeoning yogurt segment of the dairy department presents a current example of refrigerated category management activity.

    “Our category management strategy begins with understanding the overall Lala brand strategy,” observes Desiree Johnson, director of marketing for the Lala brand at Dallas-based Borden Dairy. “Specifically, Lala delivers against a consumer need that wasn’t being met in the yogurt category: healthy plus hyper-convenience. Our portable Yogurt Smoothies not only deliver against better-for-you trends, but are also extremely easy to consume on the go. Consumers are time-starved yet want to eat healthy, and Lala Yogurt Smoothies deliver strongly against these consumer trends.”

    To that end, according to Johnson, the brand has “embarked on a national expansion which includes growing distribution from 29 percent … to 57 percent by the end of Q1 2016, and to 70 percent by Q3 of this year.”

    How does Borden propose to achieve this? “At the retail level, we have focused on our core assortment platform,” explains Johnson. “In other words, we place our best-selling flavors of core drinkable product with the highest appeal against the target consumer, and build from there. We fill in the gaps with size offerings and product benefits for various consumer needs. These include our best-selling 4-packs and 10-packs that are a huge hit with busy families. We also offer a variety of products, from core yogurt smoothies with 5 grams of protein to our new Greek Yogurt Smoothies with 12 grams of protein. All are low in fat and contain no high-fructose corn syrup [and] no artificial colors or flavors.”

    Additionally, since “drinkable yogurt, while well established in many other parts of the world, is an emerging category in the U.S.,” Lala is “partnering on an initiative with several large chains to implement ‘drinkable only’ sets within their yogurt sections,” notes Johnson. “This will begin in the next few months, and represents an easy way to attract Millennials and others to the category by highlighting drinkables and the important consumer benefit of hyper-convenience.”

    Harnessing Consumer Power

    How will refrigerated category management proceed in the near future? By most accounts, the discipline will only increase its attention to the shopper, with a growing reliance on technology.

    “The manufacturer community can continue to drive successful implementation by partnering with retailers to identify opportunities to reach more consumers and to fill unmet consumer needs,” notes ConAgra’s Mayrose, adding that the company’s goals are “to provide retailers category solutions that are consumer-centric and shopper insights … that build baskets, brand loyalty and improve shopping experience. These solutions should be based on the need states of the shopper.”

    For its part, Hormel has adopted a similar stance in response to rising consumer influence at retail, which the company expects to strengthen. “In recent years, we have worked to put the shopper at the center of all decisions, and e-commerce will magnify their power going forward,” Thompson notes.

    Coming up, he sees “Big data, targeted and personalized. With the transfer of power to the shopper, they are becoming more demanding and diverse. This will require advanced capabilities to get the right products, priced right, on the right shelves at their choice of point of purchase, with personalized communications near the point of purchase that can entice trial and expand usage.”

    Asked how refrigerated category management is likely to develop going forward, Smithfield’s Pauley replies: “Developing digital and social media strategies … and designing programs that target the changing shopper base will be an important part of the future of refrigerated foods. This is an ongoing challenge that continues to require the latest in insights, research and shopper analytics to stay one step ahead of the changing landscape.”

    By Bridget Goldschmidt, Stagnito Business Information
    • About Bridget Goldschmidt In addition to serving as Progressive Grocer’s Managing Editor, Bridget writes many print and digital features encompassing a range of grocery and fresh categories across the store. Bridget also enjoys on-site reporting assignments at such key industry events as the New York Fancy Food Show and the International Boston Seafood Show, in addition to visiting stores for PG’s prestigious Store of the Month feature. In her years with the magazine, she has developed into a knowledgeable voice on grocery industry trends, sought by such distinguished publications as The New York Times.

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