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 Frozen Foods in North America - October 2009  |
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Organic Frozen Food in the USA Market: Big Opportunities as Well as Challenges
Organic frozen food and ice cream have shown rapid growth in recent years, but that was before recession-era penny-pinching. Private label lines may bolster sales more these days. Frozen organic food is more readily available in North America today than ever before. Supermarkets are increasing their commitment to healthy food, including organic. And while some producers are experiencing financial problems, if not courting disaster in the current economic climate, various companies continue to expand their markets. Not all consumers can afford organic food, but for many shoppers frozen organic food means value. The Organic Trade Association (OTA) compiles statistics on frozen organic food. When this story was filed, its field survey for 2007 and 2008 had not been released. Therefore the most recent figures compiled are for 2005 and 2006. The association’s senior editor/writer, Barbara Haumann, kindly furnished them to Quick Frozen Foods International. Sales of frozen fruits and vegetables reached $206 million in 2005 and $262 million in 2006, an increase of 27%. Ice cream receipts totaled $22 million in 2005 and $27 million in 2006, up 24%. In 2005, $605 million worth of frozen prepared foods were sold; in 2006 sales increased to $756 million, a gain of 25%. Purchases of frozen and fresh baked breads rose from $406 million in 2005 to $483 million in 2006, up 19%. Frozen juice sales remained level at $13 million in both 2005 and 2006. In 2006 sales of organic food and non-food products in general amounted to $17.7 billion, an increase of 21% over 2005, OTA reported. Organic foods accounted for more than 95% of the total, $16.7 billion. The association’s 2007 Manufacturer Survey estimated that organic sales were $21.2 billion, and predicted a growth rate of 18% per year for 2007 through 2010 for organic food products. The OTA’s figures were compiled in late 2007. However, various studies released in 2008 tend to bear out the optimistic view of the organic foods sector. A report by the natural market research group SPINS states that sales of organic products (defined as products with more than 70% organic ingredients) were 13.4% higher for natural food retailers in the 12 weeks ending October 4, 2008, than in the corresponding 12-week period in 2007. At conventional stores sales were 4.9% higher in the same 12 weeks in 2008 than in 2007. A report published by The Hartman Group in August of 2008 shows that 69% of US adult consumers buy organic products at least occasionally, and that about 19% purchase organic foods weekly. A Harris Interactive online survey conducted for Whole Foods Market last August concluded that 70% of consumers continued to buy the same amount of natural and organic foods in 2008 as previously. Pleasanton, California-headquartered Safeway, with some 1,740 supermarkets in the United States and Canada, is doing much to popularize organic foods. In late 2005 the chain introduced a private label O Organics line that began with 150 products but had by mid-2008 grown to 350 items, including an extensive offering of frozen foods. The company announced that it had put together a team that would market O Organics and another private label line, Eating Right, across all retail channels in the United States.
Safeway is already in overseas distribution with listings in Carrefour stores in Asia and South America, and D&S in Chile. It is marketing O Organics, starting with beverages, to the foodservice sector, and is testing private labels in its own restaurant, the Citrine New World Bistro in Redwood City, California. A major reason for the success of O Organics is that the items are priced at or, only a little above, corresponding non-organic items. A majority of consumers will buy organic foods if they can afford them. The Harris Interactive online survey, for instance, found that two thirds of adults prefer to buy organics if the prices are comparable to those of non-organic products. Safeway’s gradual renovation of all its supermarkets to a Lifestyle format with earth-tone colors and subdued lighting has helped give the outlets the ambiance of specialty food stores. O Organics may be positioned in a special section with other “healthy” products or on the “regular” shelves, depending on the store. Individual units that have already undergone the conversion have reportedly experienced double-digit increases in sales; and receipts for Safeway overall were up 5.2% to $42.3 billion in 2007. Cincinnati, Ohio-based Kroger, which rang up $70.2 billion in revenues in 2007 and operates some 2,000 supermarkets in the USA, does not intend to be deprived of benefits that accrue from selling organics. It is also expanding store brand organic offerings, although the retailer is not trying to sell private label outside its own stores. A new organic line is a result of the development of its private label offering in general. Approximately 10 years ago Kroger launched the Private Selection line of premium-quality products. The tag line in its promotion of the range was “Everything Premium (but the price).” In late 2002 it introduced a private label line called Naturally Preferred, which includes organic items. Then in 2007 it brought out a sub-category of Private Selection with the name Private Selection Organics. Initially made up of some 60 items, the line continues to grow. Kroger operates stores under a variety of names, among them Kroger Fresh Fare. More than 80 Fresh Fare supermarkets exist, all of which feature expensive meats and seafood, gourmet cheeses, natural and organic foods, and take-home meals prepared by chefs, in addition to the usual grocery items. Kroger continues to construct additional Fresh Fare stores, as it believes that economic hard times will increasingly lead people to buy high-quality food to eat at home instead of in restaurants, and shop in supermarkets rather than in specialty stores. Other Kroger units are likely to have an area devoted to “natural” products. The size of these areas varies greatly by outlet, but the level of transactions is not dependent on the square footage. A Kroger employee who manages one of these stores in Lexington, Kentucky, told QFFI the greatest volume of business is rung up by the store nearest the university, even though its natural foods area occupies little space. His remark jibes with studies of the clientele for natural and organic foods. According to data from Mintel, reported by the Natural Food Network, specialty foods, which include organics, are most frequently purchased by people in the 24-34 age group. Those over 65 or with a low income are least apt to buy specialty foods. The age group most likely to treat themselves with specialty foods or buy them as gifts are those 18 to 24, which includes college students. The variety of products crammed into the natural products areas in conventional Kroger stores is impressive. Kroger, like Safeway, by no means limits its offering of organics to private label.
Sales in these areas have not slowed down because of the recession, the manager of one outlet told this reporter. Some organic frozens at his store were on sale, but he said that this was just part of a normal rotation of specials. Consumers want the natural and organic products, and, when the price is reduced, they simply stock up. Kroger shelves its Naturally Preferred Organics and Private Selection Organics with non-organic items in the main part of the supermarket. The chain thus intends to make switching to organics easy for customers. They can pick up such items when going to the shelves in the store that they normally patronize. The initial frozen items in Kroger Private Selection Organics are vegetables and fruit, including mangos and a berry mixture. Among discount chains, Meijer is among the most advanced in the USA in terms of organic frozen food. The Grand Rapids, Michigan-headquartered operator has created the Meijer Organics line, distributed in packaging that is more subdued in appearance than that of Safeway or Kroger private label organics. At the top of the front of the package is a tan strip (as seen on this page). The color is repeated on an oblong that extends from the bottom of the left side of the front of the package to the top of the left side of the back. Both tan areas bear the words “Meijer Organics” in dark green letters, with a leaf decorating the “O” in “Organics.” On the back of the package, in addition to the obligatory panel listing nutrition facts, is a letter signed by Hank and Doug Meijer, explaining why the contents are healthy and noting that all Meijer Organics products are made with “dedication to renewable farming practices.” The frozen items in the Meijer Organics line are numerous. In a single store this reporter found six kinds of ice cream ranging from Mocha Java to Caramel, and Blackberry “made with juicy organic blackberries.” There were also three varieties of fruit, two flavors of waffles, six kinds of vegetables, and three varieties of pizza (Spinach and Feta, Uncured Pepperoni, and Mediterranean Style). Each pizza weighed between 14 and 17 ounces and cost $5.29. Calling attention to them was a sign above one of the frozen food cabinets, complete with a copy of the USDA organic logo, that read: “Meijer Organics – Naturally Good for You and Your Family.” Over another frozen food cabinet on the opposite side of the aisle was a sign referring to Amy’s Kitchen foods, though Cedarlane Natural Foods and Seeds of Change products were on display along with Amy’s offerings. Twenty-eight Amy’s items were present, 15 of which were discounted. A Bowl Made with Organic Pasta and Vegetables in a Cheddar Cheese Sauce was going for $3.59, down from $3.99. In frozen organics, Meijer appeared to be far ahead of a Walmart on the same side of the city. No private label frozen organic products were to be found in the Walmart, nor were many brand name organic products. The exception was So Delicious desserts from Turtle Mountain. The relative lack of organics at the Walmart outlet was in contrast to two years ago. Evidently the manager of that particular store has decided that its clientele will not pay for organic products. This is not necessarily the case with Walmarts nationwide, however. Around Chapel Hill, North Carolina, for example, Walmart stores are still selling brand name frozen organics, including Amy’s Kitchen. A Target store in the same neighborhood carried some branded frozen organics. Hannaford, part of Delhaize US, Salisbury, North Carolina, which has some 167 stores in the northeastern United States, is an example of a smaller supermarket operation that is emphasizing organics. The chain has organic retailer certification and sells more than 1,400 items that are certified organic. “There’s no need to make a trip to a specialty shop for your organic foods,” Hannaford advertises. Among the organics it carries are private label items under the Nature’s Place brand, which has now been adopted by other Delhaize divisions. The packaging is again conspicuous – basically white with a green and blue design and the word “organic” written on it prominently in green. Health Magazine in late 2008 ranked Hannaford fifth in a list of the 10 healthiest grocery chains in the nation (Safeway was second; Kroger didn’t place.). Hannaford’s championing of organic products throughout its stores has been a rapid shift. In 2008, a QFFI spot survey found few organic products and no private label organics in a Hannaford supermarket just south of Burlington, Vermont. The top chain in the list published by Health Magazine was Whole Foods, Austin, Texas, the leading natural and organic retailer in the United States with more than 275 stores in the USA and abroad. Whole Foods reduced the competition from other outlets when it acquired Wild Oats, the second-largest chain, in the summer of 2007. Even apart from an attempt by the Federal Trade Commission to block the deal on grounds of restraint of competition, the transition was not entirely easy. The Wild Oats outlet in Lexington, Kentucky, suffered a noticeable decline in its offering and customer count after it became a Whole Foods store. By late 2008, however, the frozen food cabinets sported an even greater variety of foods than in the Wild Oats days, and the store was humming with activity. Whole Foods sells more than 2,500 private label items, and it is in the process of expanding its 365 line of everyday products. A manager of frozen foods at a Whole Foods store told QFFI that the sale of frozen organic products is holding up, but that she did not think that this would be the case if not for the 365 line, which is positioned to represent value for money. In today’s difficult economic times, customers are starting to recognize and appreciate 365, she said. The remaining large specialty food chain in competition with Whole Foods is Trader Joe’s. Customers are enthusiastic about its pricing, made possible in large measure by a raft of private labels. However, large areas of the nation have no Trader Joe’s stores, and the offering varies from state to state and from time to time. Consumer-owned cooperatives are also a major source of organic food, and more than 100 such operations across the country work together to improve their service and offering. Among their joint projects is a periodic flyer, The Co-Op Advantage, listing specials, which always include numerous organic frozens. Some producers merchandise products in retail outlets of their own or from catalogs distributed in print or online. Ben & Jerry’s, however, has stopped selling ice cream from its website and shipping it to individuals. The site explains that it is well known that ice cream deliveries by mail cost “an arm...& a leg...& a toe,” and thus had to go. While a few firms have recently gone under or are thought to be faltering, others are known to be doing very well. A notable example is the Hain Celestial Group, which reported a 22% rise in profit for the first quarter of the 2009 over the same period during the previous fiscal year. In the same positive spirit, new companies are being created, and various firms that have been on the scene for awhile are just now receiving wide national recognition. One example of a new company doing well is Wise Acre of Blue Hill, Maine. It sells organic treats called Frosteas as well as tea-free Frostbites to natural food stores and supermarkets on the East Coast. Distribution was extended to the Midwest in September 2008. Breakfast One major innovation in breakfast foods is Amy’s Kitchen Organic Hot Cereal Bowls. There are four varieties: Oatmeal (with rolled oats), Cream of Rice (with brown rice), Steel-Cut Oats, and Multi-Grain (with seven whole grains), all sweetened with agave nectar. The Bowls weigh nine ounces and have a suggested retail price of $2.29, though Meijer recently offered them for $1.99. They can be prepared in a microwave oven or on the stove top. Van’s International Foods continues to offer Organic Blueberry Waffles. It also now sells Organic Flax and Organic Homestyle Waffles. Nature’s Path has rebranded and repackaged its main line of organic waffles. They are now sold under Nature’s Path’s own name rather than under the Lifestream brand, as previously offered. When the company changed the name, it made the entire line organic. The range now consists of eight organic waffles, all of which it lists as “new”: Mesa Sunrise; Homestyle (gluten-free); Hemp Plus containing Omega-3 fatty acids; Buckwheat; Pomegran Plus with Oat Bran, plus natural pomegranate flavor and pomegranate powder; Flax Plus with Figs; Flax Plus containing Omega-3; and Flax Plus Red Berry, with oat bran, raspberry purée, and elderberry juice. Nature’s Path also sells organic Gorilla Banana waffles under the brand EnviroKids, and Organic Optimum Power waffles containing flax, soy, and blueberries. Competing with the name brands in the waffle category are private labels, including the 365 store brand from Whole Foods and Meijer’s Organics. The 365 line features Organic Flax Waffles, Homestyle Mini Waffles (7.9 ounces for $2.99), Blueberry Waffles and Vanilla Waffles (eight ounces for $2.39). Meijer Organics includes Blueberry Waffles and Multigrain Waffles ($2.19 for six waffles, 7.4 ounces in total). Both Amy’s Kitchen and Fairfield Farm Kitchens sell organic toaster pops. Burritos suitable for breakfast are also available.
Amy’s burritos have become staples. Among them is a six-ounce Breakfast Burrito made with organic black beans and tomatoes in an organic flour tortilla. Phil’s Fresh Foods sells a Veggie Fajita Burrito, which includes organic whole wheat tortilla, black beans, white rice, and salsa in an organic flour tortilla. The tortilla weighs eight ounces and retails for $2.79. Phil’s was founded in 2001 by Phil Anson, a young college graduate who originally intended to finance a life of rock climbing by selling burritos. Today the company, headquartered in Boulder, Colorado, employs approximately 20 people, and sells products in more than 1,000 outlets across the United States. Morningstar Farms, owned by Kellogg Co., markets Breakfast Patties made with organic soy. At a Kroger supermarket outlet in Kentucky they were selling recently for $3.78 per eight ounces – marked down from $4.89. At Whole Foods they were priced at $4.99. Boca Food Company, acquired by Kraft Foods in 2000, offers Breakfast Links and Breakfast Patties, also made with organic soy, just as it did in 2006. Cascadian Farm now produces six flavors of frozen organic juice concentrate: orange, apple, lemonade, raspberry blend, grape and cranberry. They were all on sale recently at City Market, a cooperative in Burlington, Vermont, at $2.99 – down from $3.98 per package. The line is distributed by Small Planet Foods in Washington state. The source of the juice is not stated on the label. The Canadian company Evergreen still markets frozen organic Wheat Grass Juice. A 12-ounce carton at Whole Foods was recently priced $13.99. Lunch In organic breads, Ezekiel’s sprouted whole grain bread from Food for Life Baking Company is at or near the top in popularity. Managers of frozen food departments say things like, “It just flies out of here,” and “We can never have too much of it.” Food for Life has competitors, though. One that has been expanding its offering is French Meadow Bakery in Minneapolis, Minnesota, which has entered into a business alliance with Rich Products Corporation. French Meadow, which opened in 1985, launched 14 new products in 2008, among them three frozen organic “take and bake rolls”: Healthy Hemp Rolls (16 ounces for $4.49), Ciabatta Rolls (10 ounces for $3.49), and Sprouted Organic Peasant Rolls with Ezekiel Grains (16 ounces for $3.49). Long-time organic favorites from the bakery include Men’s Bread and Woman’s Bread. Both contain sprouted grains; the price of each is $5.50 for a 24-ounce loaf. The Men’s Bread, formulated to provide long-lasting energy, contains pumpkin and flax seed, fava beans and soy isoflavones. Among the many ingredients in the Woman’s Bread are dried cranberries and flax seeds. Garden of Eatin’ supplies organic whole wheat pita bread, which entrepreneur Al Jacobson dubbed “Bible Bread,” since pita was “the transitional bread served for thousands of years throughout the Middle East.” Priced at $1.99 per 12-ounce bag, the product is made with organic wheat flour, water, yeast, salt and organic sesame seeds. Founded in the early 1970s, Garden of Eatin’ became part of The Hain Celestial Group in 1988. Some retailers place frozen product in a cooler to thaw in order to increase sales among consumers who mistakenly think that non-frozen products are necessarily more fresh than frozen offerings. The head of frozen foods at a Whole Earth store told this reporter that the thawed bread sells better than frozen offerings. Aunt Trudy’s fillo pocket sandwiches from The Fillo Factory are ideal for a quick lunch. They come in Spinach and Feta, Broccoli and Cheddar, and 11 other combinations. Each weighs five ounces and sells for approximately $2.60. Both microwave and conventional oven preparation is recommended. A wide variety of burritos and vegetarian burgers, some with organic ingredients and some certified as organic, are available. Boca, Morningstar Farms, Amy’s Kitchen, and Sunshine Burgers in Ellenville, New York, are among the producers of the burgers. Sunshine Burgers in four flavors (Garden, Original, Barbecue and South West) are certified organic. Cedarlane, meanwhile, still sells burritos and enchiladas that are certified as organic. Dinner
Marked “New Product” in a Whole Foods outlet late last year was Organic Beef & Spinach Ravioli in the chain’s own 365 value line. The pasta squares in the basically blue envelope are filled with a blend of organic ground beef, spinach and Parmesan cheese, seasoned with organic herbs and spices. They have been par-boiled to shorten cooking time and prevent sticking. Preparation simply requires immersion in boiling water for two to six minutes, or zapping in a microwave oven for two minutes. Topping the past with Whole Foods’ 365 Tomato and Basil Pasta Sauce is recommended. Rising Moon Organics of Dayville, Connecticut, has created a new assortment of pizzas featuring organic ingredients. Pesto & Buffalo Mozzarella Pizza is made with organic soft wheat flour, tomatoes and traditional dairy mozzarella cheese. The 370-gram product was produced in Italy and features a thin crust baked on stone. At City Market in Burlington, Vermont, it cost $6.79. The pizza is meatless, while part of the mozzarella is made from cow’s milk and a smaller part from buffalo milk. The other pizzas in the line are Four Cheese, Margherita, Mushroom, and Grilled Veggie. The cost undoubtedly reflects the fact that “Every Blake’s meal is made from scratch on our fourth generation farm in Concord, New Hampshire.” Distribution is presently limited to the northeastern USA. Piccata with Wehani Rice, and Chicken Spinach Alfredo with Noodles are new Organic Classics. Organic Chilaquile Casserole, a hearty mix of red beans, vegetables and south-of-the-border spices layered over white corn tortillas and topped with grated cheese, is an addition to the Moosewood line. Caesar’s Organic Pasta Specialties sells a variety of pasta items, including Stuffed Shells Filled with Four Cheeses. The shells are to be served with a sauce, with which they are are cooked or microwaved. Utopia produces an Organic Chicken Pot Pie with chicken, peas, carrots and potatoes in a whole-wheat crust folded in half and sealed to form a “sandwich-to-go.” According to text on the box, the product may be heated on a paper towel in a microwave oven or on a baking sheet in a conventional or toaster oven, for 20 to 25 minutes at 400° F. The pie weighs 4.5 ounces and costs $2.49. Organic Valley Cooperative, which brings together more than 1,200 farms, sells frozen organic meat under the brand name Organic Prairie. Cuts of beef, pork, chicken and turkey can be ordered on-line or bought in various stores. If procured on-line, they are shipped in dry ice to the purchaser. The prices may seem high to someone accustomed to shopping for meat at a conventional supermarket. An organic whole young turkey costs $5.00-$6.15 a pound, plus shipping. |
