A Cookin' Category

By Andy Hanacek, executive editor

With the International Poultry Expo looming next month, The National Provisioner takes a look into the fully cooked chicken segment to see where the market is headed for this skyrocketing line of products.
Convenience and quality are not attributes any processor takes lightly when it comes to product development. Consumers who love chicken love it because of the great taste and healthy benefits that properly prepared chicken gives them.
But fresh meat in today’s hurried world often gets a bad rap, indirectly, by consumers who simply don’t have the time to prepare and fry, cook or bake — it’s not that consumers don’t like these products, they simply don’t have the time.
Top 10 brands, IQF Frozen Chicken/Chicken Substitute (Latest 52 Weeks Ending Nov 4, 2007)
% Chg YAgo Dollar Share Unit Sales % Chg YAgo
1. PRIVATE LABEL $468,979,900 7.00 46.51 67,916,940 1.54
2. TYSON $125,336,600 (2.83) 12.43 17,437,020 (13.17)
3. PERDUE $50,738,770 95.25 5.03 6,818,969 73.45
4. PILGRIM'S PRIDE $28,417,490 (10.16) 2.82 4,565,803 (21.06)
5. GOLD N PLUMP $27,699,550 15.67 2.75 5,681,912 14.11
6. TENDER BIRD $27,344,440 (20.06) 2.71 4,316,408 (37.11)
7. BARBER FOODS $24,759,820 19.07 2.46 7,059,033 19.80
8. COUNTRY STORE $23,312,570 (20.11) 2.31 5,732,892 (31.16)
9. GOLD LEAF $18,645,020 5.45 1.85 3,355,960 (25.39)
10. GREEN PEAK $18,324,620 36.34 1.82 3,339,982 26.40
TOTAL Frozen Chicken/ Chicken Substitute $1,008,282,000 2.35 100.00 161,424,700 (6.44)
TOTAL IQF FROZEN POULTRY CATEGORY $1,289,171,000 7.73   234,734,200 1.80
TOTAL U.S. - F/D/Mx (Supermarkets, Drugstores, and Mass Merchandise Outlets (excluding Wal-Mart))
Source: Infoscan Reviews, Information Resources, Inc. (IRI) - the leading global provider of enterprise market information solutions.

That’s where fully cooked has taken a foothold. Products such as precooked chicken strips, nuggets, wings and a multitude of others have taken up residence in grocer’s freezers across the country and are snapped up by consumers quickly. What has caused this speedy ascent? Where does the category go from here?
The National Provisioner sat down with two poultry processors to get some answers to those very questions. One company, Advance Brands, has a large stake in the fully cooked chicken marketplace at retail. The other, Bell & Evans, has dabbled in fully cooked products, but is now taking a measured approach to introducing these products, making sure it is selling a product with which it is 100 percent comfortable. Neither approach, it should be said, is right or wrong. However, each sheds a slightly different light upon some of the concerns processors should have within this segment.
Billy McPherson, vicepresident of sales & marketing for Advance Brands
Jeannie Oliver, manager of marketing services for Advance Brands
NP: What are your overall thoughts on the precooked chicken market in your segment?
McPherson: One, the quality of the product has gotten better — not just ours, but competitors’ as well. In the overall category, there are a lot of very good products out there, giving the consumer a lot more choices. Along with that is the convenience aspect of it. It’s just a lot more convenient to pull something out of your freezer, pop it in the microwave and fix it up at home, versus having to pick something up at a Chili’s or TGIFridays or somewhere like that. So the quality of the product has gotten a lot better, and also, it’s a lot more convenient. That’s what has driven it. People are time-starved right now.
Oliver: I wholeheartedly agree about families being time-starved. At the same time, price is always an issue for families. I think that this is a less expensive alternative than takeout as well.
NP: It’s more of a longer-term development, but the improvement in microwave technology has also played a hand in improving the category as well, I imagine?
McPherson: I think so. A lot of what we watch is the trends in foodservice. We’ll look at the restaurant industry and see what’s happening there. We saw several years ago that what was growing in foodservice was the fast-casual type of restaurant, ... and what was growing within that segment was carryout. So we looked at that and said, “Why are you carrying it out?” It was perceived to be convenient versus fixing it at home. We developed our whole Fast Classics line around the idea of “equal to or better than what you could carry out of a fast-casual restaurant.” And the whole idea is to create that impulse sale in a grocery store to fix one more meal at home versus eating out.
NP: How much of a battle was it to convince the consumer that your products were as good as what they could carry out at a fast-casual restaurant?
McPherson: Creating the impulse sale at the grocery store really helped propel our business, in that consumers saw the product over and over and over, and would try it. If you go back just 10 years ago, consumers were very skeptical of frozen food — that it was TV-dinner quality, that it was just not very good and totally focused on price. Now retailers have really taken a step up, and there are some great products out there that the consumer can keep in their freezer, and that’s a great alternative to stopping at a restaurant and bringing a product home.
NP: Whom does Advance Brands target with these impulse displays at retail?
McPherson: The target is that consumer who is time-starved and goes after the carryout meal. It’s the same consumer who is buying bagged lettuce instead of head lettuce, or shredded cheese instead of chunk, bulk cheese. It’s all about convenience. It’s the same consumer who, 20 years ago, started buying microwave popcorn rather than a five-pound bag of popcorn that was a lot cheaper.
NP: Health and nutrition in home meals is obviously a big concern today, particularly in households with children. With this health trend, do you see a lot more moms jumping back on board with fried, precooked chicken items?
McPherson: Well, the category continues to grow. It keeps going up, so it’s not like there was ever some type of a dip where consumers went away. But, a couple of things contribute: zero trans fat, high in calcium and it is poultry. I think the consumer puts all that together and says it is pretty good. But, the best way to describe it is the saying we use in R&D when we’re developing a product: People will talk healthy, but they only will buy what tastes good. ... If you put something out there that’s high in calcium with zero trans fat, it better taste good, or the kids won’t eat it. Kids are picky. They have their own little things that they like. So, if you’re putting a product like that in front of kids, it better taste good.
NP: What about technical and quality innovations? What do you see in terms of the process that needs improving?
Oliver: Cook-in-the-bag is always attractive to consumers, particularly in single households or households where high school kids are doing the cooking. I talk to a lot of consumers, and that’s one real appeal for this kind of precooked product, the fact that mom doesn’t have to do the cooking.
McPherson: Also I’ve seen [resealable bags] that are microwaveable. They just came out recently. ... You seal it, throw it in the microwave for three minutes, and it steams it. And I’m looking at that saying, “Wow, consumers are going to have sandwich bags and now these cook-in bags. What’s that going to do to our category, since it makes it even easier?” So you’ve got the bag manufacturers who are coming up with ways to cook frozen products. It’s almost as though we owe them a thank you.
NP: Is there an area of the food supply where this type of innovation would fit well that processors have yet to exploit but are looking at — what do you see on the short-term horizon in terms of products?
McPherson: The easy answer is non-poultry products, because you see so many poultry products out there right now. You’d think there’d be more beef and pork items, and we’ve been playing around with some of those. But it just seems that poultry is so dominant right now. There should be these types of great items in other proteins, whether it is beef, turkey or pork. Certainly, there are some, but not to the extent that chicken has.
NP: Why has poultry taken off compared to the other proteins?
McPherson: Perceived health. It’s perceived as being healthy. And I say, “perceived,” because some of it is healthy and some of it may not be. It has that connotation of being a healthy protein.
Tom Stone, director of marketing for Bell & Evans
NP: Give your initial thoughts on the overall precooked chicken market in your segment. Are you surprised, impressed, not surprised at the rise in popularity of this line of products?
Stone: I definitely think it’s an expanding market, because there are more families out there with less time to prepare meals, looking for things that are quick, easy, good and good for them.
NP: What are some of the initial challenges that processors have since overcome when they first rolled out their precooked chicken products?
Stone: I think one of the challenges for any company when it comes to fully cooked is finding the right co-packer [unless they have their own facilities], and making sure the products are clean, healthy and safe for the consumer. When you’re giving the consumer something that is fully cooked, you have to be very conscious of all of your bacteria levels, including Listeria.
NP: Have we seen the pinnacle of product innovation as far as precooked chicken products go?
Stone: I don’t think so. We continue to look at different things that we can work on at Bell & Evans — different types of entrees or center-of-the-plate items. We’ve always been a company that looks outside the box a lot when it comes to what we want to produce, how we want to produce it and with what favor profiles. So, we’re continually looking at different partners, since we don’t process the fully cooked items ourselves.
NP: What about technical and quality innovations? Is quality where the improvement can come into play for this segment of the marketplace?
Stone: I think the quality is certainly getting there. We actively go out and look for new ways to retort or reheat the product — different technologies out there to give you a better product that’s easier to reheat and safe too. It’s all about being safe, in my opinion, when it comes to being fully cooked.
NP: What is your take on the health implications that challenge this segment, in particular trans fat?
Stone: Oh, it’s huge. It’s huge, especially in our business. ... I think one of the biggest issues that the consumer needs to know and doesn’t know is that there are naturally occurring trans fats in any meat product, and especially in dairy products. So, if you use a lot of butter, like we do in our butter crust on our pot pie, it’s a challenge to try to keep the trans fat level [low enough] to where it won’t show up [on the label] as one gram of trans fat, even though it’s naturally occurring. ... It’s not only trans fat, though. It’s salt, it’s fat, it’s people who have specific dietary needs, whether it’s low sugar, low cholesterol or gluten-free. And all those are certainly things companies should be focused on.
NP: Do they come into play more with these types of items than some of the fresh items?
Stone: I think so, because if you look at our fresh chicken program, our fresh chicken program is going to be naturally gluten-free, for example. There’s no wheat in a fresh chicken — it’s not there. And if you want, you can buy a boneless, skinless breast and have low-fat and low-cholesterol. It’s when you get into the further-processed products and what we as the producers are doing to those products to make them even more palatable for the consumer. That’s where we need to focus better at giving the consumer something that’s not only great tasting but is not going to clog their arteries, for example.
NP: Where do you think this segment is headed — what innovations do you see on the horizon?
Stone: I think that average consumer in the United States, unfortunately, doesn’t have the time anymore, so these products have become important for the American diet today. When I see products on the shelves, there are so many people out there trying to do it the cheapest, most profitable way instead of trying to give the customer something that’s good and tastes good, and trusting that the money will come. Instead of trying to put something as cheap as possible in a box, put something good in the box, and people will buy it.