Scope and Methodology

• Market Parameters
• Report Methodology

The Market


• Two Product Categories
  • Entrees
  • Appetizers/Snacks
  
  
• Hand-Held Foods and Snacks Market Nears $2.4 Billion in 2001
• Hand-Held Entrees a $1.6 Billion Category
• Appetizers/Snacks More than Double, to $818 Million
• Table 1-1: U.S. Retail Sales of Hand-Held Foods and Snacks, 1997-2006 (dollars): Hand-Held Entrees, Appetizers/Snacks, Total
• Market Composition by Product Category
• Figure 1-1: Share of U.S. Retail Dollar Sales of Hand-Held Foods and Snacks by Product Category, 1997 vs. 2001 (percent): Entrees, Appetizers/Snacks
• Factors to Market Growth

The Marketers


• Major Marketers
• Chef America, Heinz, General Mills Are Leading Marketers
• The Competitive Situation
• Private-Label Penetration Small

Marketing and New Product Trends


• Marketing Trends
• New Product Trends
• $38 Million in National Consumer Advertising

Distribution and Retail


• Warehouse or Direct Store Delivery Distribution
• Supermarkets Move the Biggest Volume
• C-Stores, Warehouse Clubs, Vending Strong Secondary Outlets

The Consumer


• Product Usage Rates
• Users of “Frozen Hot Snacks”
• Users of Mexican Foods
• Users of Breakfast Foods

II. The Market

Scope of Report

• Market Definition
• Multi-Component Products
• Most Foods Meant to Be Served Hot
• Single-Serve, Pick-Up Products
• Other Products Not Covered
• Portable and Anytime

Product Categories


• Two Main Product Categories
• Hand-Held Entrees are Core of Market
  • Stuffed Sandwiches/Wraps
  • Hand-Held Mexican Foods
  • Sandwiches on a Bun, Biscuit, or Bagel
  • Breakfast Sandwiches
  • Corn Dogs and Bagel Dogs
  
  
• Appetizers/Snacks Round Out Market
• Single-Serve vs. Multi-Pack
• The Refrigerated Option

Background: History of Hand-Held Foods


• Hand-Held Foods Are Traditional Fare
• Enter the Microwave Oven

Product Technology


• Most Products Developed for Microwave Reheating
• Pitfalls of the Microwave
• Figure 2-1: Estimated U.S. Retail Sales of Hand-Held Foods and Snacks, 1997-2001 (dollars)

Market Size and Growth


• Methodology of Sales Estimates
• U.S. Retail Sales Approach $2.4 Billion in 2001
• Table 2-1: Estimated U.S. Retail Sales of Hand-Held Foods and Snacks, 1997-2001 (dollars)
• Hand-Held Entrees Category Nears $1.6 Billion
• Table 2-2: Estimated U.S. Retail Sales of Hand-Held Entrees, 1997-2001 (dollars)
• Appetizers/Snacks Top $800 Million
• Table 2-3: Estimated U.S. Retail Sales of Hand-Held Appetizers/Snacks, 1997-2001 (dollars)

Market Composition


• Entrees Are Two-Thirds of Market
• Figure 2-2: Share of U.S. Retail Dollar Sales of Hand-Held Foods and Snacks by Product Category, 1997 vs. 2001 (percent): Entrees, Appetizers/Snacks
• Frozen Foods Represent 90% of Sales
• Frozen Hand-Held Entrees Claim Nearly Half of Sales
• Figure 2-3: Share of Mass-Market Dollar Sales of Hand-Held Foods and Snacks by Product Subcategory, 2001 (percent): 6 Product Subcategories
• Supermarkets the Dominant Retail Outlet
• Figure 2-4: Estimated Share of U.S. Hand-Held Foods and Snacks Market by Retail Channel, 2001 (percent): 4 Retail Channels, All Other
• Sales by Region
• Table 2-4: Regional Usage Indices by Product Type: Hand-Held Foods and Snacks, Fall 2001 (index): 4 Product Types
• Winter Favors Sales of Hand-Held Foods and Snacks

Factors to Market Growth


• Two Key Consumer Groups
• Demographic Trends Affecting Hand-Held Foods and Snacks
• Table 2-5: Projected U.S. Population by Age Bracket, 2000-2010 (number): From Age Under 5 to Age 100 and Over
• Kids and Teenagers a Driving Force
• Fewer Sit-Down Meals
• More Snacking Occasions
• Fitting Adjustable Appetites
• The Quest for Convenience
• Nowadays, “Convenience” Means Even Faster
• User-Friendly, Mobile Foods
• Ethnic Population Shapes Sales and Products
• Table 2-6: Population Projections for Selected U.S. Racial Populations, 2000-2020 (number): Non-Hispanic White, Non-Hispanic Black, Hispanic, Asian-American
• Competition from the Fast-Food Industry
• Competition Across the Aisles
• Hand-Held Price Points Favorable
• The Well-Stocked Freezer
• Aggressive Marketing, New Product Introduction Drive Growth
• New Technology Improves Products
• Expanding Shelf Space and Distribution Channels
• Crunch for Freezer and Chiller Space
• Figure 2-5: Projected U.S. Retail Sales of Hand-Held Foods and Snacks, 2001-2006 (dollars)

Market Projections


• Market to Exceed $3.4 Billion by 2006
• Table 2-7: Projected U.S. Retail Sales of Hand-Held Foods and Snacks, 2001-2006 (dollars)
• Hand-Held Entrees to Approach $2.1 Billion
• Table 2-8: Projected U.S. Retail Sales of Hand-Held Entrees, 2001-2006 (dollars)
• Appetizers/Snacks Will Top $1.3 Billion
• Table 2-9: Projected U.S. Retail Sales of Appetizers/Snacks, 2001-2006 (dollars)

III. The Marketers

The Marketers

• Over 300 Marketers
• Chef America is Largest Player
• Next Three Largest Marketers Publicly Owned
• Major Privately Owned Marketers
• Significant Minor Marketers
• Marketers of Mexican-Style Specialties
• Marketers of Asian-Style Specialties
• Marketers of Other International Specialties
• Natural and Vegetarian Foods Marketers
• Refrigerated Fresh Foods Marketers
• Recent Divestitures, Mergers, and Acquisitions
• Table 3-1: The U.S. Market for Hand-Held Foods and Snacks: Leading Marketers and Their Top Brands, 2002 (115 Marketers and Their Brands)

Marketer and Brand Shares


• Data Based on Mass-Market Sales
• Chef America, Heinz, Pillsbury Lead Overall Market
• Chef America Sweeps Frozen Hand-Held Entrees
• Sara Lee, Pillsbury Lead Hand-Held Breakfast Entrees Sales
• Heinz Leaps to First Place in Frozen Appetizers/Snacks
• Table 3-2: Share of U.S. Mass-Market Sales of Hand-Held Foods and Snacks by Marketer and Brand, 2000 vs. 2001 (percent): 13 Marketers/24 Brands, All Other Brands, Private Label
• Table 3-3: Share of U.S. Mass-Market Sales of Frozen Hand-Held (Non-Breakfast) Entrees by Marketer and Brand, 2000 vs. 2001 (percent): 12 Marketers/25 Brands, All Other Brands, Private Label
• Table 3-4: Share of U.S. Mass-Market Sales of Frozen and Refrigerated Hand-Held Breakfast Entrees by Marketer and Brand, 2000 vs. 2001 (percent): 10 Marketers/14 Brands, All Other Brands, Private Label
• Table 3-5: Share of U.S. Mass-Market Sales of Frozen Appetizers/Snacks by Marketer and Brand, 2000 vs. 2001 (percent): 16 Marketers/29 Brands, All Other Brands, Private Label

The Competitive Situation


• Mergers and Acquisitions Reshaping the Landscape
• Multiple Branding for Different Preferences
• Smaller Marketers Invent New Products
• Some Marketers Focus on Non-Supermarket Channels
• Private-Label Penetration Small

Competitive Profile: Amy’s Kitchen, Inc.


• Corporate Background
• The Amy’s Line
• Natural Sector and Mainstream Distribution
• Vegetarian, Business, and Environmental Values

Competitive Profile: Camino Real Foods


• Corporate Background

Competitive Profile: Chef America, Inc.


• Corporate Background
• Product Lines and Distribution Channels
• Extending the Pocket Sandwich Franchise
• Lean Pockets, with Seven Grams of Fat
• Croissant Pockets Target a Slightly Older Market
• Less Successful Lines and Extensions
• Targeting the Breakfast Market
• Next Up: Hot Pockets Juniors, Pizzoni, and Quick Bake
• Competitive Strategies
• Current Strategies to Drive Growth
• Competing with Itself?
• Adding New Flavors, Tweaking Formulations, Updating Packaging
• The Power of Advertising and Promotions
• Pushing Competitors Out of the Arena
• Chef America Will Bolster Nestlé’s Frozen Foods Position

Competitive Profile: ConAgra Foods, Inc.


• Corporate Background
• ConAgra’s Hand-Held Foods and Snacks Participation
• Foodservice Brands
• Healthy Choice Hearty Handfuls Discontinued
• Swift Premium for Breakfast

Competitive Profile: General Mills, Inc./The Pillsbury Co.


• Corporate Background
• Merger Goes Less Than Smoothly
• The Pillsbury Co.
• Totino’s Appetizers and Snacks
• Pizza Rolls’ Success: Targeting Kids and Teens
• Identifying the Nachos Niche
• Totino’s Football Promotions
• Pillsbury Expands Hand-Held Breakfast Options

Competitive Profile: H.J. Heinz Co.


• Corporate Background
• Leaner and Meaner
• The Leader of the Snack
• Bagel Bites Line Relaunched, Expanded as Hot Bites
• Targeting Tweens
• Ethnic Gourmet Foods Acquisition
• Heinz Acquires Delimex Mexican Foods
• Anchor Foods and T.G.I. Friday’s
• Smart Ones Breakfast Offerings

Competitive Profile: Hormel Foods Corp.


• Corporate Background
• Spam and Beyond
• Limited Hand-Held Participation

Competitive Profile: Kellogg Co.


• Corporate Background
• Healthy Eating Through Worthington Foods
• Morningstar Farms and Other Labels

Competitive Profile: Luigino’s, Inc.


• Corporate Background
• Michelina’s and Yu Sing
• Luigino’s Pilot Vending Program

Competitive Profile: Nestlé S.A.


• Corporate Background
• The Number One Player in Frozen Meals
• Stouffer’s and Stouffer’s Lean Cuisine
• Competitive Strategy
• Chef America Will Bolster Nestlé’s Frozen Foods Position

Competitive Profile: Pierre Foods, Inc.


• Corporate Background
• Vertical Integration
• Co-Branding Ingredients

Competitive Profile: Pinnacle Foods Corp.


• Corporate Background
• Swanson Great Starts Breakfast Line

Competitive Profile: Ruiz Food Products, Inc.


• Corporate Background
• Expanding the Mexican Repertoire
• Guiding Principles for Success
• Mexican Foods Target Non-Hispanics and Hispanics Alike
• Multiple Promotional Activities

Competitive Profile: Sara Lee Corp.


• Corporate Background
• Sara Lee Hand-Held Foods and Snacks
• Jimmy Dean and Rudy’s Farm
• State Fair Leads Corn Dogs
• Sara Lee Pulls Calzone Creations After Successful Launch

Competitive Profile: Schwan’s Sales Enterprises, Inc.


• Corporate Background
• Number Two in Frozen Pizza
• Hand-Held Products
• Red Baron Tweaks Popular Formulas
• Changing for the Better?
• Schwan’s DSD Strategy
• Red Baron Promotions

Competitive Profile: J.R. Simplot Co.


• Corporate Background
• MicroMagic Frozen Sandwiches

Competitive Profile: White Castle System, Inc.


• Corporate Background
• Responding to Consumer Demand
• Growth Through Vending
• Targeted Promotional Program

IV. Marketing And New Product Trends

Marketing and New Product Trends

• Hand-Held Entrees and Snacks Merging
• Snacks and Minis Proliferate
• Sizing Up the Market
• Breakfast To Go
• The Stamp of Approval
• Reaping Sales in Alternative Outlets
• Package Sizes Accommodate a Range of Retailers

New Product Trends


• Expanding the Stuffed Sandwiches Menu
• Hot Off the Grill
• South of the Border
• Wrapping It Up with Fusion Flavors
• Spinning Off Corn Dogs
• Ready For PB&J?
• Pick Up Sticks
• Classic Appetizers and Fancy Foods
• Next on the Horizon: Hand-Held Pasta and Long-Life Sandwiches?
• Selected New Product Introductions
• Table 4-1: The U.S. Market for Hand-Held Foods and Snacks: Selected New Product Introductions, 2000-July 2002

Consumer Advertising and Promotions


• $38 Million in National Consumer Advertising
• Pillsbury, Chef America Lead Advertisers
• Ads Tout Taste, Convenience, and Fun
• Touting Product Features
• Reinforcing the Meal or Snack Positioning
• The Athletic Connection
• Cinco de Mayo Promos for Mexican Foods
• Coupons a Popular Promotional Tool
• Joint Promotions Team Up Brands
• Demos an Obvious Vehicle
• Sweepstakes and Merchandise Giveaways
• Recipe Contests
• Merchandise Promotions
• Industry-Wide Promotions
• Examples of Consumer Advertising and Promotions

Trade Advertising and Promotions


• Trade Advertising
• Trade Promotions
• Co-Op Offers
• Sampling Programs
• Trade Shows Are Vital

V. Distribution And Retail

Distribution

• Two Main Methods of Distribution
• Warehouse Delivery
• Direct Store Delivery
• Smaller Marketers Frequently Work Through Brokers
• Vending Machine Delivery

Retailers


• Supermarkets the Dominant Retail Channel
• Convenience Stores as Hand-Held Contenders
• The Lure Is Time
• The C-Store Foodservice Push
• Warehouse Clubs Growing in Clout
• Warehouse Clubs and Hand-Held Foods
• Natural Foods Supermarkets
• Vending Machines as Hand-Held Purveyors
• Foodservice Vending
• Product Assortments in Vending Machines
• Vended Foods Bullish on Breakfast
• Mass Merchandisers on the Move
• Drugstores Try for One-Stop Shopping
• Consumer-Direct Shopping

At the Retail Level


• Supermarket Merchandising Varies
• Refrigerated Items Housed in Deli
• The Snack Zone
• Supermarkets Strike Back with Bulk
• Refrigerator and Freezer Space at a Premium
• Slotting Fees
• Changing Space Allocations
• Moving the Frozen Food Aisles?
• Mobile Cases and Outpost Locations
• Signage and Visuals
• Price Points Range from Under $1 to $10
• Retail Margins

VI. The Consumer

Consumer Overview

• The Simmons Survey System
• Simmons Data on Hand-Held Foods and Snacks
• Product Usage Rates
• Table 6-1: Consumer Usage of Hand-Held Foods and Snacks, Fall 2001 (U.S. Adults)
• Table 6-2: Consumer Overview for Hand-Held Foods and Snacks, Fall 2001 (U.S. Adults)

Consumer Focus: Hand-Held Entrees and Appetizers/Snacks


Frozen Hand-Held Entree and Snacks Users
• Hot Pockets vs. Lean Pockets and Toaster Breaks
• Hormel Hand-Held Users
• Bagel Bites vs. Jeno's (Totino’s)
• Chun King vs. La Choy
• Table 6-3: Demographic Characteristics Favoring Use of Frozen Hot Snacks, Fall 2001 (U.S. Adults)
• Table 6-4a: Demographic Characteristics Favoring Use of Frozen Hot Snacks: Hot Pockets, Fall 2001 (U.S. Adults)
• Table 6-4b: Demographic Characteristics Favoring Use of Frozen Hot Snacks: Lean Pockets, Fall 2001 (U.S. Adults)
• Table 6-5a: Demographic Characteristics Favoring Use of Frozen Hot Snacks: Toaster Breaks, Fall 2001 (U.S. Adults)
• Table 6-5b: Demographic Characteristics Favoring Use of Frozen Hot Snacks: Hormel, Fall 2001 (U.S. Adults)
• Table 6-6a: Demographic Characteristics Favoring Use of Frozen Appetizers/Snacks: Bagel Bites, Fall 2001 (U.S. Adults)
• Table 6-6b: Demographic Characteristics Favoring Use of Frozen Appetizers/Snacks: Jeno’s (Totino’s), Fall 2001 (U.S. Adults)
• Table 6-7a: Demographic Characteristics Favoring Use of Frozen Appetizers/Snacks: Chun King, Fall 2001 (U.S. Adults)
• Table 6-7b: Demographic Characteristics Favoring Use of Frozen Appetizers/Snacks: La Choy, Fall 2001 (U.S. Adults)

Consumer Focus: Mexican Specialties


• 60% of Households Use Mexican Foods and Ingredients
• Burritos vs. Tamales
• Table 6-8: Demographic Characteristics Favoring Use of Mexican Foods and Ingredients, Fall 2001 (U.S. Adults)
• Table 6-9a: Demographic Characteristics Favoring Use of Mexican Foods and Ingredients: Burritos, Fall 2001 (U.S. Adults)
• Table 6-9b: Demographic Characteristics Favoring Use of Mexican Foods and Ingredients: Tamales, Fall 2001 (U.S. Adults)

Consumer Focus: Frozen Breakfasts


• Frozen Breakfast Entree and Sandwich Users
• Frozen Breakfast Entree/Sandwich Users by Brand