[Image of: RetailWire Logo and Tagline (for print)]

BUSINESS TIPS

IRI:
Shopper-Centric Execution
ChannelAdvisor:
Online Selling Strategies
RR Donnelley:
In-Store Marketing
LoyaltyOne:
Enriching Customer Relationships
 
[9 comments]

Are center store departments hamstrung by nutritional labels?

August 1, 2014

Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine

Frozen food units and volume haven't been down for the past few years because of all the dollar stores, club stores, drugstores and haberdasheries taking away share. If that were true, supermarket perimeter departments would be in the same boat. But they're thriving.

Anyone with a pulse can tell you that supermarket perimeters and foodservice have been cannibalizing frozen departments, weakening and picking off categories one by one.

Unfortunately, consumers believe frozen food is too processed, and has too many ingredients they can't pronounce. They say it has too much fat, sugar, sodium and cholesterol and way too many calories. And how do they know that? They read the nutritional labeling on the backs of the packages.

So what's their solution? Blissful ignorance. They buy more of their entrees, pizza and desserts along the perimeter, where there's little if any nutritional labeling. Those nutritional numbers on the center-store packages can hurt, and more people are reading labels than ever. So manufacturers have jumped through hoops making healthier foods with less salt, fat and sugar. By and large, people don't buy them as much. Whether it's an addiction to sugar and salt or just plain slovenliness, I'll leave up to you. But a fact's a fact.

Supermarkets seem on the cusp of heading much deeper into foodservice. Don't go and tell me that nutritional labeling is going to hit the perimeter departments, as well as every restaurant menu in America. After all, we're ultimately dealing with Congress here.

Meanwhile, so what if a Dunkin' Donuts Pretzel Salt Bagel has 3,380 mg of sodium? Or if Bistro Shrimp Pasta at The Cheesecake Factory has 3,120 calories and 89 grams of saturated fat? Or if the perimeter pizza has twice the fat, sodium and calories of the pizza behind the frozen door? How about fighting for a level playing field for center store and the perimeter?

Discussion Questions:

Are less stringent rules over nutritional labeling around supermarket perimeters and foodservice a large part of the reason frozen foods as well as center store has been struggling in recent years? What options do frozen food and center store vendors have?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Should supermarket perimeter departments have the same nutritional labeling requirements as those in the center store?

Comments:

No, nutritional labeling is not the issue here. There are shoppers who care about ingredients and read labels and then there's the majority that don't. There would not be an obesity epidemic or as many medical maladies affecting Americans as there are if most people really cared about what they eat.

Marketing/packaging/promotions trump nutrition labels every time for the majority of shoppers. If not, the stores would be dominated by non-GMO, organic and unprocessed foods instead of the other way around.

This is more of a marketing, positioning, display/layout, habitual issue than anything else. Please leave the poor nutritional label alone.

[Image of: View Braintrust Panelist button]
Ken Lonyai, Digital Innovation Strategist, co-founder, ScreenPlay InterActive

Menu labeling is part of the Patient Protection and Affordable Care Act which was passed in 2010. It is supposed to require chain restaurants and similar food establishments to provide nutritional information. Part of the proposed regulations broadens that definition to include any location where more than 50 percent of the store's area is devoted to selling food. That definition includes pre-packaged foods that already have nutritional information on them.

Should this proposal ever be put into effect it would address the dilemma frozen foods face. They are forced to disclose information and compete with other foods that don't. Will this bring customers back to the frozen aisle? That is unknown, because consumers are seeking "fresh" products, as they are perceived to be healthier. While this may or may not be true, like nutritional value the customers' perception is the reality we have to live with.

[Image of: View Braintrust Panelist button]
Steve Montgomery, President, b2b Solutions, LLC

It has less to do with labeling and more to do with the improved foodservice options that supermarkets are providing. Consumers perceive foodservice options as fresher, healthier, tastier, etc., than center store and frozen options.

The key is not to lament nutritional labeling issues, but instead to develop frozen products that are perceived as fresher, healthier and tastier. Plus, the convenience factor of frozen products needs to be highlighted. No planning or shopping the day of the intended meal is necessary with frozen entrees, sides and desserts.

[Image of: View Braintrust Panelist button]
Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

Warren raises a valid point about a "level playing field," but I don't think that would solve the issue of sliding sales in the frozen aisle. Accessible nutritional labels for some and not other foods is certainly part of the problem. So is the consumer perception that perimeter items are fresher that their frozen counterparts. Not necessarily so, as industry folk know.

The real issue is more basic, in my humble opinion. Shoppers can eat only so many pizzas, right? Among all the departments, how many do you suppose are offered? Cannibalization, dilution, call it what you will, there are a whole lot of SKUs drawing attention away from the freezer case.

[Image of: View Braintrust Panelist button]
Dan Raftery, President, Raftery Resource Network Inc.

Having "apples and apples" labeling certainly won't help the frozen food industry. Processed foods will always have more unpronounceable ingredients than the perimeter foods.

Beyond that, it is perception. The perimeter products look fresh and homemade. The center store and frozen food departments are "cooked in a factory."

Oh, and did I say they have to taste better?

[Image of: View Braintrust Panelist button]
Gene Detroyer, Professor, Independent

I'm skeptical of any statement based on "anyone with a pulse." There is research stating consumers are making an effort to eat healthier and to make every meal occasion count in terms of value, taste, and nutrition. I'm inclined to believe that has affected frozen food sales more than labeling.

Frozen food and center store vendors need to adapt to consumption trends. Innovate or die. It's that simple.

[Image of: View Braintrust Panelist button]
Carlos Arámbula, Managing Partner, MarcasUSA LLC

Only one thing perplexes me here. Say what you will about frozen foods, and some criticism is certainly valid. But this applies to canned, frozen and ambient foods in whatever kind of packaging: they all have to play by a set of labeling rules, and the perimeter doesn't. For example, I've put canned soup back on the shelf because of sodium content, but then bought it at the perimeter, and wondered. It's very obvious that more and more consumers are concerned with health, and more and more are reading labels. Why not just make the information available to everybody? (Granted, not everybody cares, but a significant amount do.) Bottom line, what's wrong with transparency, anyway?

[Image of: View Braintrust Panelist button]
Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

No. As much respect as I have for Warren, and I have a lot as I always finds his contributions—whether as author or commenter—both entertaining and informative, I don't buy the argument. "Fresh vs. frozen" is a common metaphor for lifestyle choices, along with "local vs. national," but "unlabeled vs. labeled" is not. Might a "level playing field" be a good thing (its effect on frozen sales notwithstanding)? Perhaps...but is it to be leveled with more fresh labeling or less frozen labeling? As for blaming Congress: they wouldn't be elected unless (at least a large portion of) the public supported their efforts.

'notcom'

I think that in the U.S., the economy has gained strength in recent years. Just take a look at the stock market, housing prices in most urban regions and automotive sales. This tends to drive consumers eating out and buying fresh department prepared foods. I don't think the stagnant center store/frozen sales are due to nutrition labeling. The average consumer doesn't look at the labels of a frozen pizza. They already know it isn't the healthiest thing to eat.

[Image of: View Braintrust Panelist button]
Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Search RetailWire
Follow Us...
[Image of:  Twitter Icon] [Image of:  Facebook Icon] [Image of:  LinkedIn Icon] [Image of:  RSS Icon]

RetailWire's
Getting Started video!

View this quick tutorial and learn all the essentials...

RetailWire Newsletters