Frozen pizza was introduced by Celentano Brothers in 1957. The next big technological leap did not occur until the 1990s, when new package films and better packaging technology enabled Kraft Foods Inc.'s DiGiorno brand to introduce a rising crust pizza. Finally, frozen pizza could compete with pizzeria or home delivery pizza.
The focus was on the quality of the crust and creating a pizza pie that was comparable to that of a pizzeria but available when and where you wanted it. As this technology transferred beyond DiGiorno in the late 1990s, many brands created pizzas that were "as good as" delivered pizza (which had become less differentiated via the dominance of a few national quick-serve brands).
Next, the pizza race focused on toppings and creating an impression of gourmet with less familiar toppings of meats, vegetables, even fruits. California Pizza Kitchen came to the fore with a variety of nontraditional cheeses, meats (chicken and ham) and pineapple, etc. As pizza innovation continued, Schwan Food Co., Marshall, Minn., created a Red Baron pizza that no longer emphasizes the crust at all, but focuses on the toppings to create a pizza that tastes fresher and more like "Napoleon" pizza than other branded frozen pizzas, or so the company claims. Red Baron does this with a familiar set of toppings but ones that can be perceived as more premium than gourmet.
Understanding the marketplace
Frozen, refrigerated and shelf-stable pizza products had a market size of $2.8 billion in 2004. This market is dominated by frozen pizza, which accounts for 92 percent of sales. The category grew 18 percent from 1999-2004, according to Information Resources Inc. Household penetration is fairly high with two-thirds of consumers reporting use of frozen pizza. At retail, consumers see Kraft brands (DiGiorno, California Pizza Kitchen, Jack's and Tombstone) and Schwan brands (Red Baron, Tony's and Freschetta), as well as house brands where the marketplace is (and always has been) highly price competitive. Growth is believed to be driven by gourmet or restaurant offerings.
Following explosive U.S. growth in the 1950s, pizza has had a fair amount of ubiquity. It has always been popular with kids. Even the pickiest preschoolers love it, and any teen or kid gathering typically revolves around it. Pizza is easy to eat, handheld, easy to clean up. In fact, it is the most commonly portrayed food in cartoons because it is easy to draw over and over.
Red Baron is focused on bringing more "premiumness" to pizza and moving beyond the crust. Can the product deliver a gourmet experience for those who really care, and can it move beyond this niche to mainstream for even higher growth and earnings?
Schwan is trying to meet the needs of the consumer for the 75 percent of meals that are eaten at home. The company is seeking to shift the value paradigm from quick, filling meals to quick, filling, nutritious, premium meals. Red Baron is trying to reframe the image of pizza from an easy, kid-friendly food to a higher-value, gourmet adult food. Can store-bought frozen pizza move to this premium world?
There are a lot of gourmet choices for the pizza consumer. Consumers can take home and bake a pizza from a pizzeria in their neighborhood. They can have it flown in via FedEx from their favorite pizza restaurant in Chicago. They can pick up fresh pizza from the grocery deli and they can consider frozen gourmet pizzas like California Pizza Kitchen and Wolfgang Puck. These pizzas primarily have created a sense of gourmet via unusual toppings. Red Baron is trying for that same sense with familiar toppings that are special in the way they look on the pizza and taste.
Our Crave It! process integrates up to 35 categories of linked conjoint studies to generate a database that can be used to understand the experience of foods. From it, we learn the key attributes for pizza are: taste, aroma, mood and brand. It is consumed most often at lunch and dinner when consumers are looking for a fast, easy, tasty way to fill up. When consumers are asked to trade off ideas about craveable pizza the top ones are about the toppings, the crust, quality and freshness. Branding ideas and ease of eating can only detract from the excitement of pizza, because they are expected attributes of the pizza experience, not delighters for the category.
Key trends that are impacting this category are:
- Family size:
- Households with children are more likely to consume pizza than those without children. As household sizes begin to decrease, the need to move pizza to a new paradigm, such as gourmet or premium, to entice smaller households will become increasingly important.
- Manufacturers are responding to consumers' hectic lifestyles by creating convenient products. Pizzas can be pulled out of the freezer as needed to feed the family.
- The premium/value dichotomy:
- Frozen, store-bought pizza is thought of as a value food; the whole family is likely to eat it. But the growth area for pizza is in the premium/gourmet area. This creates an issue for whole-family consumption: Will the kids still eat something that's a little more adventurous for the adults?
- Pizza has had its healthy halo damaged in recent years. People are becoming aware that pizza can be a high carbohydrate/high fat food. Consumers need reasons to consider pizza familiar and healthful.
|Testers said Red Baron met its upscale promise, not with exotic toppings but with premium appearance, flavors and textures.