Unilever leads freezer fightback

With fresh and chilled foods rising in popularity, Rachel Barnes uncovers a revolution taking place in the freezer aisle.

For decades, Captain Birds Eye's friendly face has been one of the few cheerful elements in supermarket frozen-food aisles. But with the sector's sales in decline, Unilever has hit on a strategy to make shopping in the freezer section a more customer-friendly experience.

Starting next month in Asda stores, the FMCG giant will begin rolling out Unilever-branded zones within frozen-food departments. These areas will be designed to resemble the delicatessen, fishmonger and butcher counters in supermarkets.

Unilever hopes the initiative will boost the frozen-food sector, which has suffered from the increase in popularity of fresh and chilled food.

Marketing's 2003 Biggest Brands survey revealed that sales of frozen seafood and frozen ready meals fell by 5.8% and 2.4% respectively, according to Information Resources.

The scheme's launch follows trials in Safeway stores last year, conducted in conjunction with design consultancy Dalziel & Pow.

Pre-trial research of Safeway customers defined what they wanted from a freezer department and how shoppers used the aisles. According to Stephen Cowles, associate director at Dalziel & Pow, one of the major problems for the frozen-food sector is that consumers can't see products unless they lean over or open a door. 'We had to make the units easier to shop,' he says.

The research also revealed that the inaccessibility of the units meant consumers relied on the colour of packaging to identify products - associating green with peas, for example.

As a result, colour-coding of products will be a key feature of the branded zones.

Five-year plan

The Safeway trials were successful, prompting a 12% rise in frozen food sales. By contrast, the sector as a whole declined by 18%.

Following Morrisons' takeover of Safeway in March, the trials have been put on hold. Not to be thwarted, Unilever has drawn up a three- to five-year plan to roll out the programme in other supermarkets.

Asda is the first of the big chains to sign up for the zones. Alterations will begin in stores from the end of May (Marketing, 21 April), though the freezers will not appear for another two years.

Design details are being closely guarded, but Cowles says the idea is to give the freezers a more natural appearance, using a combination of graphics and 3-D elements to tie in with the way food is presented on the plate.

To overcome the two-year wait for the cabinets, the agency has been looking at ways of adapting existing freezers, fitting them with suspended banners and graphics. 'We're trying to give the fixtures and the department an identity that challenges consumers' current negative perception of frozen food,' Cowles explains.

Unilever thinks it can cash in by offering consumers complete Unilever-branded meals. Branded freezers will stock ready meals, 'carcass' meats and frozen vegetables, as well as ice creams and frozen desserts. The zones will also include a section devoted to children's products, such as fish fingers and chicken nuggets.

Although meal combinations may overlap, resulting in product duplication in some cases, this 'one-stop shop' strategy is key to Unilever's plans.

The company believes 'deals of the week' - similar to Iceland's 'meal deals' - are the way forward.

But Steve Gotham, senior retail analyst at Verdict Research, argues that consumers want more category choice than Unilever is offering. 'The cross-merchandising plan is ground-breaking, but is the Unilever name strong enough?' he asks. 'It's a big risk and expensive. Sainsbury's and Iceland have both offered price deals on complete frozen meals and it has to be backed with a substantial investment in promotional activity.'

More deals ahead

Cowles is confident that more supermarkets will come on board in the next two months. Chains such as Tesco, Sainsbury's, Somerfield, Londis and Co-op are all developing their own branded zones with Unilever.

'Without a doubt, all supermarkets will eventually do this,' he argues. 'Frozen foods are facing the same sort of revolution that supermarkets went through 10 years ago.'

Unilever has a strong case to put to the supermarkets. Its research shows a frozen-food unit could produce an average yield of £1500 a week, compared with £400 to £500 from a unit selling chilled foods. Given that there is a 20% profit margin on frozen produce, compared with 5% on chilled, it is clear why Unilever and the supermarkets are taking the freezer department's rebranding so seriously.

While Gotham agrees the freezer aisle is in need of a makeover, he contends that the responsibility lies with retailers rather than manufacturers.

Unilever's response is to point out that the problem affects 100% of its ice-cream and frozen-foods division, compared with 4% of Tesco's total food sales. It consequently believes that it must bear the burden of pushing through change in the sector.

If this change is successful, what Unilever describes as the 'white coffin' aisle could soon be revived as an in-store marketing hotspot.

DATA FILE

Frozen foods

Market Volume

value (tonnes)

£2000 4.21bn* n/a

2001 3.36bn 1.29m

2003 3.38bn 1.26m

2004 2.23bn 1.24m

*Mintel. Other figures from Unilever