Competitor Analysis Example Shows Red Flags for New Market

Frozen complete meals are a large category, reported at $4.5 billion in grocery stores, and as high as $9.1 billion in total retail.  A competitor analysis example demonstrates a challenging competitive environment for new entrants.

Millennial Parents are Cool with Frozen Meals

Competitor Analysis Example Shows Red Flags for New Market

Frozen meals meet consumers’ needs for convenience, good price/value, and portion control.  While the category had experienced declines in the early 2000s, today’s Millennial parents with young children are attracted to the convenience and have become an important target market.  In addition to families with children present, frozen entrees also provide a good option for smaller, one and two-person households. Occasions primarily include work lunch and dinner, but there are also breakfast offerings.

Top Competitors in Frozen Meals

According to Statista, leading frozen single serve dinner manufacturers and their brands are:

  • Nestle (Stouffers, Lean Cuisine) – approximately $1 billion in frozen dinners
  • ConAgra (Marie Callender’s, Banquet, Healthy Choice) – approximately $500 million in frozen dinners (total business, including pizza and pot pies, is $3 billion)
  • Kraft Heinz (Weight Watchers Smart Ones) – approximately $125 million
  • Bellisio (Michelina’s) – approximately $160 million in frozen dinners
  • Amy’s Kitchen – approximately $140 million in frozen dinners

In this competitor analysis example, a CPG (consumer packaged goods) company considered investment in an innovative, premium frozen entrée offering. Additionally, our firm was hired to identify the target customers, and a potential white space for positioning. 

Competitor Analysis Example Shows Red Flags for New Market

Competitor Analysis Example Sources and Areas of Investigation:

The competitor analysis looked at several areas, e.g.,

  1. Cost of raw materials (the food itself)
  2. Cost of packaging
  3. Estimated manufacturing costs
  4. Brand advertising investment
  5. Brand positioning (from analysis of advertising and marketing)
  6. Brand promotional investment
  7. Frozen food distribution costs
  8. Slotting fees and turnover requirements from retailers
  9. Category price points
  10. Product line turnover, new products needed to maintain the line

A number of data sources were used, including scanner and household panel data, advertising investment, analysis of competitor’s financials, interviews with industry experts, interviews with retailers, qualitative research, and others. 

Chances for Market Viability were Slim in this Competitor Analysis Example

Key findings of this competitor analysis example pointed out a number of red flags for market viability, including:

  • The new brand required significantly more expensive packaging, providing a cost disadvantage
  • Existing brands had a considerable advantage, having invested for years in building their brand name with consumers
  • Heavy, ongoing promotional investment required to be competitive in a category that was prone to promotions and deals
  • High slotting analysis costs
  • While several large players had introduced premium offerings, over the course of several years, these lines often failed. The dominant brands were more mainstream price points. There appeared to be a price/value threshold for the category

After reviewing the competitor analysis, the CPG company chose not to pursue the investment.  Another important factor in their decision was that food was a relatively small category in their portfolio, and they had no other business in the frozen channel.

Would your brand benefit from a competitor analysis before entering a new market? Contact us to start a conversation with the Insight to Action experts.

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