News

Frozen pizza sales rose last year, but Kraft's brands were down

January 18, 2004

NORTHFIELD, Ill.—Kraft Foods Inc., the world's No. 2 food maker, reported in a recent Securities and Exchange Commission filing that its frozen pizza sales dropped in 2003's third quarter after rising steadily for the past decade.

According to Crain's Business Chicago, Northfield-based Kraft is the nation's leading seller of frozen pizza, with more than 38 percent of the market. Its pizza brands include DiGiorno, Tombstone, Jack's and California Pizza Kitchen.

Kraft doesn't disclose financial results for its frozen pizza business, but according to Chicago-based market researcher Information Resources Inc. (IRI), its frozen pizza sales slipped 0.6 percent last year to $1.06 billion, after climbing 7 percent in 2002.

Kraft's decline came as industry-wide frozen pizza sales rose 2.8 percent to $2.78 billion in 2003, according to IRI, which tracks sales at supermarkets, drugstores and mass retailers excluding Wal-Mart Stores Inc.

Rival Schwan Food Co. (Freschetta Brick Oven and Red Baron Deep Dish Mini Pizzas) saw its frozen pizza sales rise 4.2 percent to $795.7 million.

Sales of store brands (private-label frozen pizza) jumped 14.5 percent last year to $188.6 million, according to IRI.

Though it's a small slice of its overall business, frozen pizza was a bright spot for Kraft.

"It's 3 percent to 4 percent of sales, but it's more important than that," said Andrew Lazar, an analyst at New York-based Lehman Bros. "The category has been growing."

A similar report on AdAge.com cited Chicago-based restaurant watcher Technomic, Inc., predicting the frozen-pizza segment will grow 6 percent through 2008. Another industry research firm cited in the report, Business Trend Analysts' Leading Edge Report, predicts the ready-to-eat pizza segment will grow just 2.3 percent this year.