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?
Insights
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.
- Convenience:
- 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?
- Healthfulness:
- 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.
The experience
Red Baron Gold Edition Thin Crust Pizza is available in a variety of flavors such as Supreme; Mozzarella, Tomato & Basil; Five Cheese; Ultimate Pepperoni; Italian Sausage & Pepperoni; and Meat Trio. Each package is 22 oz. and yields four servings; prices are $4.99-$5.49.
We tried the Mozzarella, Tomato & Basil. The package is black with a beauty shot of the pizza flavor type covering the entire front. Under this burst is a smaller definition of the ingredients that make up the particular variety. On the back is Red Baron's definition of premium quality, in effect a word picture of the food. "The product starts with a golden crispy crust, finishes with only the finest select toppings: savory meats, flavorful cheeses, and delicious spices to guarantee an extraordinary taste experience with every bite." The product looks upscale with less common red sauce and more large pieces of tomato and basil. This is not just cheese melted on a piece of bread with some ketchup-like red sauce.
Textural differences between the crust and toppings and flavors are critical to the perception of quality. The product looks appealing. No orangey red sauce or water-soaked green things. The crust is crisp at the edge and makes it hard to believe this came from the freezer. The sauce is upscale and tastes homemade or fresh from the garden, not sweet like typical frozen pizza sauces. The tomatoes taste like fresh tomatoes with a just-heated, crispy texture, not soupy, soft and overcooked. The mozzarella tastes like fresh mozzarella cheese with a chewy texture, not like the faux mozzarella that has been mixed with other cheeses to become a gooey, melted, fatty mass.
We found the product is consistent from edge to edge and package to package. Some other brands seemed to think that once they capture us as consumers, they can widen the quality range to make great just good enough. The idea of upscale is not easy to achieve. Using this pizza as a guide, it seems that upscale is about how many tomato pieces, their size and color and how much (or little) tomato sauce.
Our tasters had a variety of reactions. They were surprised at the fresher, more adult flavors. This tasted premium. Those with kids were concerned at the difference between this pizza and standard pizza. Would the kids actually eat it? Or was this a pizza for adult time, the kind of pizza they could serve at an adult party, familiar, yet special.
But what about the health aspect? When compared to Tombstone and DiGiorno, Red Baron had lower fat (13g vs. 19 or 14g), lower sugar (3g vs. 5 or 3g) and lower sodium (590g vs. 860 or 750g) than the other two. This is achieved at a comparable serving size of 270 calories vs. 380 or 260 calories. The freshness of the flavors and the textural differences reinforce the healthy halo of this pizza.
Does the product deliver?
The Red Baron pizza brand stands for "the ordinary becomes the extraordinary." This product delivers. The adult reactions acknowledged its familiarity yet specialness. By focusing on classic toppings but delivering upscale premium characteristics in the appearance, flavors and textures, Red Baron has met the promise.
How to make the idea bigger: This product is competing with other pizzas and appetizers for adult attention. Most consumers are unaware of the healthfulness of this premium pizza. This one delivers a great meal with nutrition that fits consumer behaviors and does not require them to change.
Can this pizza move to premium mainstream beyond the adult premium segment? The issue is the trade-off between a fresh tomato flavor and the more familiar, sweet tomato sauce. Kids are used to the latter. This one takes some getting used to. If this product is going to focus on the upscale niche, then it's already there. Expansion could be to smaller sizes for the individual or a larger sizes/rectangular form that allows it to be used for parties.
Rating: Red Baron Gold Edition Thin Crust pizza delivers on its promises. It creates a familiar, family-oriented meal with a touch of upscale adult premiumness without going to unfamiliar and unusual toppings.
Market potential: Good.
Hollis Ashman ([email protected]) is chief strategist and Jacqueline Beckley ([email protected]) is president of the Understanding and Insight Group, a strategy, business and product development firm. See www.theuandigroup.com.
