Pizza Ready to Roil
The increasingly popular meal option of frozen pizza has grown 3.8% annually since the year 2000 to top $4.4 billion in 2009 (Forbes Media’s Investopedia). Prospects for continued sizzling growth vs. the food market overall (2.7% annually in that same period, says NPD Group) explains why Nestle, the world’s largest frozen foods processor, swooped in to acquire Kraft’s leadership share in the U.S. business.
It doesn’t happen often that a new owner enters a category with the biggest share and the resources to shake things up. F3 anticipates that Schwan, the #2 market share leader, will fight hard to sustain or build on the popularity of its brands, while Nestle draws on its international experience to entice American consumers. This should be one of the more interesting categories to watch in the coming year.
Much is at stake. The U.S. accounts for 43% of global market value and is the largest frozen pizza market in the world, says Euromonitor International analyst Ildiko Szalai. It is also the fastest-growing market in total dollar size, outpacing Germany, Canada, United Kingdom and Italy.
Why is that? Szalai says, “Frozen pizza can feed many people. It is an ideal and easy solution for many families.”
The Technomic consultancy adds, “the quality perception of frozen pizza has improved. Today 30% of consumers think that frozen pizza is of equal or better quality than restaurant pizza, as compared to 15% two years ago.”
It has long been accepted that supermarkets would face a difficult challenge if they tried to unseat neighborhood pizza parlors as the destination of choice for this tasty, value-priced, communal food. (See SupermarketGuru.com article, Pizza: a tough chew for supermarkets, September 1, 2009.) But the continuing improvement of frozen pizzas has prompted the category’s growth surge partly at pizzerias’ expense, and F3 ponders if the industry is on the cusp of a new boom due to the new competition in place.
We believe the frozen pizza players frame their competitive set well beyond the glass doors they call home. To the extent that they vie for a larger slice of the national pizza market, it’s valuable to see findings of the new Technomic Pizza Consumer Trend Report, such as:
“Positioning pizza as a meal solution that is easy, convenient and affordable will resonate with many consumers,” says Technomic. “Operators and suppliers will want to consider what they can do to elicit consumer cravings through adding new items to their menus and emphasizing them through their marketing message,” noted executive vice president Darren Tristano.