From The January/February 2003 Issue of Natural Grocery Buyer

Frozen Assets

Steve Taormina

Quality, convenience and taste: These three attributes are leading many crossover consumers to buy natural and organic prepared foods, suggests Rachel Berliner, co-founder of Amy's Kitchen, based in Santa Rosa, Calif.

Vegetarian entrées, low-fat meals, gluten-free foods and products that are made with organic ingredients and do not include genetically modified ingredients or hormones are lures for today's shoppers who choose all-natural prepared foods, says Terry Mayo, vice president of Cedarlane Foods.

Both Amy's and Cedarlane are leading a category that still has plenty of room to grow. The companies ranked No. 1 and No. 2, respectively, in sales of frozen entrées, pizzas and convenience foods in mainstream supermarkets, according to a sales report by SPINS/ACNielsen for the 52 weeks that ended April 20, 2002.

Sales of natural and organic brands represent less than 6 percent of the estimated $6.5 billion frozen prepared foods market in the United States, reports Nutrition Business Journal.

"We try to target specific items that there are specific niches for," says Cedarlane's Mayo. The Carson, Calif., company manufactures more than 30 fresh and frozen prepared products, including three varieties of stuffed focaccia breads as well as low-fat vegetarian wraps.

Organic packaged, canned and frozen foods lure shoppers—most of the time. Among shoppers who say they buy organic foods or beverages every time/sometimes when they shop: 12 percent always... 55 percent sometimes... 31 percent rarely/never... ... purchase organic packaged, canned or frozen foods.

Other brands reach out to crossover consumers by making healthier, vegetarian versions of traditional American-style dishes. "We've taken Americans' favorite foods ... and made them from nutritious soy, giving [consumers] a delicious way to eat better without sacrificing the flavors they love," explains Deanie Elsner, senior category business director for Boca Foods, a Madison, Wis.-based division of Kraft Foods.

The company recently introduced Rising Crust Pizza made with organic wheat and soy-based pepperoni and sausage toppings. Its new meatless Chik'n Buffalo Wings are also made from soy protein and contain no cholesterol and half the fat of traditional chicken wings, according to the company.

"We reach out to what we call the healthy optimist—someone who approaches how they live and what they eat in a very positive way," says Elsner. "This is a consumer who wants to eat better but doesn't want to sacrifice on taste. She hasn't quite made the leap to meatless but is aware of the category and its benefits."

A similar philosophy underlies the product development and marketing at Lightlife Foods, a ConAgra Foods brand. The Turners Falls, Mass., company believes that people do not want to fundamentally change the way they eat, but many would like to cut back on their meat consumption as a way to lower intake of saturated fat and cholesterol. The company caters to these consumers by offering a line of frozen meat-substitute products in addition to prepared meals.

Its seven Smart Menu frozen products are soy-based alternatives to traditional favorites such as breakfast patties, burgers, meatballs and chicken. Its refrigerated products include soy-based, meatless hot dogs; deli slices such as ham, turkey and bologna; and bacon and steak alternatives.

Lightlife had a 31 percent dollar share of the refrigerated/frozen meat alternative category for the 52 weeks that ended Sept. 30, 2001, according to SPINS/ACNielsen.

Perhaps the fastest-growing segment of frozen prepared foods is ethnic-inspired dishes. Ethnic prepared foods, including conventional brands, accounted for $2.2 billion in supermarket sales in 2001. Sales of Mexican-styled frozen entrées alone increased more than 20 percent from 2000 to 2001, according to the American Frozen Food Institute.

Asian-American prepared foods, such as the Pad Thai, Japanese Soba Noodle and Chow Mein meal kits sold by Annie Chun's, based in San Rafael, Calif., are also bridging crossover consumers to the natural and organic side of the aisle. The company's Chow Mein Noodles with Garlic Scallion Sauce won a top honor for "Outstanding Pasta, Rice, Bean or Soup" at the 2002 National Association for the Specialty Food Trade product awards event.

Even the college-dorm-room-staple cheap meal—ramen noodles—has gone organic and upscale. Koyo brand from Affinity Foods in Houston has introduced three "gourmet" ramen instant meals. Each is made with organic "heirloom" wheat noodles.

From organic ramen noodles to vegetarian stuffed focaccia breads, more organic and all-natural prepared foods coming to market means grocery buyers and consumers have more choices for high-quality, convenient foods. The question now is whether they are willing to spend a little extra money on organic brands.

"I think for most people it is not a decision of cost as much as it is a decision of time," says Mayo. "What is their time worth?" he asks. The answer for many people, it seems, is that convenience should not involve a sacrifice of quality and taste.

Steve Taormina is a freelance writer based in Nederland, Colo.