—————. >- «you ‘-a.,- v . . .. . ' - c v a " 3 .' . 4 . . .. . ' v , .. _.. .. I I . u . ., ‘ O b I I‘ u l. . ._'q .'_ . I I o '. . . . o . .. . ' .-¢ '/ C v‘. .u‘ ‘..° “..O.‘..I 'J .g.’ I { - ' A C .‘ . . x\ J. .4 ‘,’ '.‘..-.‘ AN INVESTIGATION OF THE mmlm OF FROZEN FOODS A THESIS Submitted to the School of Graduate Studies of Hichigan State College of Agriculture and Applied. Science In Partial Fulfillment of the Requirements for the Degree Easter of Arts Curriculum in Food Distribution Department of General Business by Walter Herman Bos tic 1951 THESIS mmommms The writer wishes to express his appreciation to the Kroger Company for their help in making this stuw possible. Special thanks go to Mr. W. C. Smashey, Little Rock Branch Manager and Mr. C. L. Arnold, Personnel Director of the Kroger Company, Cincinnati. Recognition is also due the nan: companies and individuals who have contributed information for this thesis. Thanks is also due Dr. Kenneth Wilson, Director of the Curriculum in Food Distribution, for his interest, supervision and helpful sugges- tions in the preparation of this thesis. ‘ r: \fi ‘ A4 f3\)€51%'3 I TABLE OF CONTENTS CHAPTER , man 1‘ mnommlm e 0 e o e e e e e e e e e e e e e e e e e e e e 'l'hePurpose of the Inwestigatim . . . . . . . . . . . . . HHH Valuetol'oodDistribution............. PreviewofOrganization................. I'D Procedure .... Definitionof’l'ermsUsed................. Irozenfoods............. ..... Q11ck-freezing..................... Concentrates............... ...... . Specialtyfoods..................... II. HISTOEYCIIIEEIROZENFOGDINDUSTR! ...... l’ornsofPreservingl'ood........ ..... Primitiweforns.................... Canning ........................ Electronic sterilisation. . . . . . . . . . . . . . . . Dehydrating........... .......... . Frozenfoods.......... .......... .. Experiments ofClarenceIBirdscye. . . . . . . . . . . . . \o-q-qmmmmuum-F'uuwuu The Development of Zero Storage and Display Cases . . . . RetailingofFrozenFoods ................ H H III. EMAILERSOTTROZENFOODS . . . . . . O O O H \J'I fhefiuperllarket..................... p.- \J'I 'l'heSmalllIeighborhoodStore.. . . . . . .. . . . . . . ...: N TherrozenloodSpecialtyStore .. . . . . . . . . ...: KO iii CHAPTER PAGE HoneDeliveryRoutes................... 22 heluockerPlants.................... 25 IV. nan CWITITE POSITION or FROZEN FOODS . . . . . . . . . . 29 Percent of Stores Handlizg l‘rozen roads . . . . . . . . . 29 Voluneoi'Sales..................... 32 PerCapitaConsunption.................. 3" Comparative Prices of Canned, Frozen and Flesh Products . ’46 V.MER)EANDISDJGMEEIHOD8................... 1&8 Brands and Varieties . . . . . . . .......... . us Cabinet. ............ ......... 52 LocationofCabinets............ ....... 5h Promotions................. ....... 56 VI. SWOONCLUSIONS AND SIBGESTIQIS 1‘03 mmsmm . . . 61 SmaryandConclusions................. 61 Suggestions for Thrther Study . . . . . . . . . . . . . . 63 smxmmm............... ........... 6’4 TABLI I. II. III. IV. V. VII. VIII. II. II. LIST 03' TABLES Stores With Facilities for Handling Frozen Foods May 1919 Stores Handling Certain Frozen Juices August 1950 . . . . Frosted Feeds on the Family Table - :By Family Income Group Frosted Feeds on the Family Table - By Population of City Approximate Consumption of Food Per Capita Retail Weight Equivalent....................... Comparison of the Consumption cf Canned, Fresh and Frozen VegetablesInPoumls.................. Comparison of the Consumption of Canned, Fresh and Frozen FmitsInPounds . Comparison of the Consumption of Canned, Fresh and Frozen CitrusJuicesInPounds ........ Frozen Fruit and Vegetable Pack in Percent of Corresponding CannedPacks..19M2-h8 Comparison of Frozen Packs with Canned Packs by Type of Distribution on Selected Fruits and Vegetable Products 19h6J+8 Comparative Prices of Selected Fresh and Processed Products PAGE 30 31 33 33 35 36 37 38 1+3 LIST OF FIGURES PIG/(Bl PER l. Purchasesotorangeprodnctsbyconsuners.......... ”-0 2. Frozen concentrated orange Juice - cmsumer purchases and Pflus paid . . . . . O . . . C C . C O O O O O O O O O 1‘8 0mm I INHODWIICU he retailer of teday has four principal nethods ef distributing perishable foods. Two of these methods, namely: distribution of foods in the fresh and canned state are alnest universally accepted by all grocers. he third nethod. dehydrated foods. has gained little popular- ity except during war years when other forms of foods were in scarce supply. rho fourth method, frozen foods, has grown in popularity very rapidly in the past twenty years. Ioday, new food retailers are adding, “How important are frozen foods to the retailer?" I. m PURPOSE OF THE INVESTIGATION The purpose of this investigation is (l) to show the progress which has been made in frozen food retailing up to the present time: (25 to compare the consu-ption. sales and price of frozen foods with the canned and fresh product: (3) to show the importance of frozen foods to the retail grocer: and 0+) to point out some of the merchandising techniques used in promoting the sales of frozen foods. II. VALUE ‘10 1001) DISTRIBUPICH This investigation has brought together many of the articles written on frozen foods and has pointed out sons of the trends in frozen food retailing. Sons of the surveys which have been lads on frozen foods have been used to point out specific examples of amounts of frozen foods purchased, where they were purchased and other points of interest to the retailer. his investigation has been an attempt to present the true {3,911 on frozen food retailing as they are today. In this report, no attempt has been nade to present frozen foods as being a prednct that the retailer should or should not carry in his store. Instead, ease of the advantages and disadvantages of handling frozen foods have been presmted which could help the retailer decide for hinself if he should carry frozen foods. III. PREVIEW 03‘ OEANIZAIION Ihis is the order in which the investigation will be presented. 1. History of frozen food industry with emphasis on the retailing faction. 2. he retailers of frozen foods with some enemies and results of sales by depart-out stores, grocery stores, locker plants. specialty stores and the direct delivery routes. 3. be competitive position of the frozen food industry. A com- parison of the consuptien of frozen foods with the consumption of the fresh and canned product. and some comparisons of sales and price at the retail level. )4. Merchandising methods. brands and varieties sold, promotions. types of cabinets. product information and location of cabinets in the store.- 5. Smart, conclusions and suggestions for further study. IV. 2300mm he original plan of investigation was to compare the dollar sales of selected frozen co-oditios with the sales of the fresh and canned counterpart. In the investigation it was found that data on the dollar sales of the commodities were not available. he plan was then changed to compare the consuption of selected frozen foods with the consmtien of the canned and fresh counterpart. Iaterial for the investigation was obtained from periodicals, hooks, government documents, correspondence with companies in the frozen food industry and flireugh personal observation. V. DEFINIIION 01' TERMS 031D M 229.41- In this report the torn “frozen foods“ will include, fruits. vegetables. concentrates and speciality foods. Prozen meats, poultry, fish and ice cream are emitted as each of these oonodities have been developed separately and are often displayed separately in the larger food stores. W. This term is used to distinguish foods frozen at a low tesperature of zero or below, from 'cold-pack' or foods frozen at 10 to 15 degrees fahrenheit. W. Concentrates will apply to all citrus Juices, coffee, apple cider, tomato Juice. grape Juice, lemonade base and other liquids which are concentrated from their eirgle strength. W {9911. Ibis tern will include any frozen food item other than those listed above. In this list such items as pies. cooked foods, bakery products and unusual foods are usually considered to be specialties. CHAPTER II HISTCBI O! m 1102111 1001) mean I. WWPWPOGD m an... In the early stages of evolution. man learned either by accident or experience to provide against famine and starva- tion through the storage of foodstuffs at harvest. Primitive man kept feed in natural caves and later. with the discovery of fire, learned that neat cooked with fire usually lasted longer and tasted better than raw flesh from wild bear and game. londreds of years later salt come into use as a preservative for foods. Probably in its earliest form salt was used more to hide the disagreeable flavor of already decaying food than to prevent food spoilage. Smoking or curing of feed by heat 1 treatment and salt then came into practice. Down through the ages food habits have had to adjust themselves to the availability of foods. In most climates this he been greatly affected by the facilities to preserve and store foods during seasonal or famine periods. Ca__n_§_in_;g_. Canning of foods was developed in France during lapeleonic times when war was making fierce demands on the food supply. lapoleon offered a prize to meme who could discover a better method of preserving 1 Clifford 1'. Ivers. Frozen Food Industry. W and, W W "OWE-53. Deco-bar. 19%. 6 food. So from a necessity created by war we have the process of canning. Canning was first introhced into this country about 125 years ago by Villiam Underwood in low England.2 he great advantages of canning foods are that canned foods are substantially imperishable and convenient for use. to big disadvantage is that they must be sterilized after they are put in the can. Sueh sterilization, except in very acid products. requires so much ceohng that the canned food does not resemble the fresh product. W Wm, There has recently been announced a laboratory method for sterilizing meats and fish in cans by high fre- quency electronic treatment. Another method calls for use of very high supersonic waves. Foods treated by these methods have lost none of their fresh flavor and can be stored without refrigeration for long periods of time. his method should be very competitive with other methods of pre- serving foods if it can be developed on a commercial scale. W. The art of drying er dehydrating perishable foods is very old. lore than 3.000 United States patents have dealt with the subject. Dehydrated feeds naturally have a great economic force behind them. hey are light in weight and compact to ship. For instance. one carload of' canned spinach contains as many edible portions as seven car- loads of fresh spinach. (his carload of quick-frozen spinach is equivalent 2 Clarence Birdseye. Future Development in Food Preservation. WW. Soptoobor 19W. p. 219. 3 bid. to eleven carloads of fresh spinach. But, one carload of dehydrated spinach contains as many portions as a train load of 21 refrigerated cars carrying fresh spinach. Economies of storing, retailing and holding in the home are proportionate. During times of war, dehydrated foods are manufactured in tremendous quantities. Before World War II there were about 20,000 dry pounds of fruits and vegetables processed in the United States each year. This went up to 29,000,000 poundsuin 1915. After the war, production dropped faster than it had increased. M MI.- llan undoubtedly began freezing flesh foods Just about as soon as he moved into areas which became frigid in winter. It would seem, therefore, that comercial freezing is very old. Actually it is less than 100 years old. Blow freezing came into use about 1865 with the artificial freezing of fish and poultry: this was followed by the freezing of meat about 1880 and of small fruits for remanufacture about 1905.5 The commercial freezing of vegetables and fruits for table use is of much more recent origin. It was started in 1929 and is usually considered as being the beginning of the quick-freezing process. II. WIS OF CLARENCE 3mm Clarence Birdseye, on a huting and fishing trip in Labrador, noticed that fish frozen in file minus 30 to 140 degrees fahrenheit weather was as It Ibid. 5 Ivero. Elfin... p. 2251 tasty and good as the fresh product when thawed and cooked. Since he knew that to more freezing of a food would not preserve its natural flavor and texture, he decided that the rapid freezing at the extremely low temperatures of the region had accomplished the miracle.6 'hen Birdseye returned home he began experimenting on the quick freezing of food products by artificial refrigeration. His first multi- ple quick-freeze was a new garbage can containing a layer of steel plates and fitted with coils through which passed a refrigerant of sodiu chloride brine. l'illets of cedfish and rabbit meat were placed between the steel plates and frozen at minus “0 degrees fahrenheit and kept for five weeks. 'hen thawed and panned they were as tasty and fresh as from the game bag or met.7 Vhat Birdseye proved was that the faster a food can be frozen at deep temperatures of around minus "0 degrees fahrenheit, the less chance of forming the large ice crystals of the slew freezing at zero. It is those ice crystals that tear down cellular walls and tissues, leaving gaps through which escape the natural Juices, nutrients and flavor. After mew experiments, Birdseye was ready to go into commercial production of quick-frozen foods. The first full line of the Birds lye Brand of frozen foods - including meats, poultry, seafoods of various kinds, fruits and vegetables - went on sale in twelve stores in Springfield. Massachusetts in 1930. hey sold 80,000 packages that year, 800,000 in 1931 and 1,200,000 in 1932. 6 ll ém‘l‘hgmkm General Foods Corporation. New York. 1 2. p. . 7 1'31", QELQJL. P0 2251 9 In 1929 Birdseye sold his rights in the lultiple-plate quick-freezing process to General l'oods Corporation for (a reported) 22 nillion dollars. III. NE NW! G" 21:30 SW]: AND DISPLAY OASIS The introduction of quick-frozen foods into the retail selling field resulted in a naJor problen which had to be solved to insure connercial success in the sale of quick-frozen foods. This problen was the selection of low tenperature, nechanically refrigerated cabinets or display cases adaptable for use in the retail store. be general requirenents were (1) a temperature of 0 degrees Fahrenheit to «I 5 degrees l'ahrenheit, with a nininun of temperature variation, (2) the storage space to be conven- iently accessible and to afford sufficient space for an ample supply of the varieties of product and (3) the initial cost and operating expense to be as low as possible.8 Since frozen foods were new to the public, it was believed that dis- play of the actual promote was necessary if they were to be sold. Early designs which were acceptable from a refrigerating and mechanical stand- point had the disadvantage of high cost. fhis initial high cost of the early display cases, together with the construction difficulties, ude it necessary that thought be given to further development of a non-display type of cabinet. Ice cream cabinets were on the market which could min- tain the required temperature but their construction features and general appearance did not make them coupletely adaptable for use in retailing 8 Donald K. Tressler and Clifford I. Evers, ml'gggzing P e - m 2; ma. New York; The Avi Publishing Germany, Inc. 19 35 p. 132 10 frozen food, After much research and testing, a cabinet was designed exclusively for the merchandising of frozen foods. This cabinet, which was first placed in service in 1931}, provided a combination of storage space and a display feature. A second type of cabinet used for the retail distribution of frozen foods is the blind storage cabinet, so called, as it has no provision for actual display of the products. It has been estimted that approximately 90 percent of the stores selling frozen foods in 1911 used a cabinet of this type.9 These cabinets are much like ice cream cabinets in design and construction and are adapted for use of frozen foods by the addition of displu' boards, lights and colored photographs of the products. The cost of the first retail cabinets. which Birds lye sold to its distributors. was from $1,200 to $1,800 each. These cabinets were expen- sive to operate and, with a few exceptions, the grocers found the overhead and operating emense too high for the volume of sales. for this reason many gave up the distribution of Birds lye products. The price was lowered to $900 but they were still too expensive. me cabinets, which were designed exclusively for frozen food retailing and placed in service in 1931}. cost around $300 and were rented to the grocer for $10 per month. lheee cabinets were for the storage of Birds lye products exclusively. In 1937 and 1938. my reliable nanufacturers entered the field offering cabinets for sale direct to the retailer and on extended terns of pas-ant. The price of these cabinets ranged from $170 to $550. 9 Ibid. p. 566. 11 The relative merits of display and “blind" cabinets have been a live subject of discussion in the industry. Practical considerations against the display cabinets are higher first cost and operating expense. According to reports. the original display-type Birds Eye cabinets required six to eight kilowatts per day as compared to two to three kilo- watts for the non-display cabinet. A nore even comparison nay be nado of cabinets listed by one manufacturer in the l'ood Industries' Directory.10 A 19.6 cubic-foot blind cabinet weiQs 1,300 pounds and is operated by a one-third horsepower motor: a 20.7 cubic-foot display cabinet weighs 1.700 pounds and is operated by a one-half horsepower notor. Since 19’45 the display type cabinet has gained in popularity. Visi- bility in this type cabinet is attained by display above it through the use of pictures, nirrors or by having the cabinet so designed that the packages will be visible through the side walls. ll'his cabinet is well suited to self-service nerchandising. IV. RETAILDG OF FROZEN FOODS In their first retail sales operations, Birds Eye usually selected the largest independent retail grocers with the highest-class trade to handle the new food products. But with no national and practically no local advertising, the grocer, who had invested $1,200 - $1,500 in a fresai food cabinet, found that his customers did not demand quick- frozen foods and probably had never heard of then. 10 Harry 03’1““: 2M. Jung? I’m 1 (Knoxville, Tennessee: University of Tennessee frees. 19 l p. If}. 12 he retail grocer, who had installed an expensive case, found that its cost and maintenance were eating into his profits. If he had a fresh- fruit, vegetable and neat department, he saw no reason for spending tins and nonoy promoting frozen foods which added to his expenses but did not increase his overall volume. Host of the early frozen foods were of poor quality - caused in part because they were frozen so slowly, The quality was so poor that prices were low: that in turn, meant that still lower grade raw natarials were used. Added to this poor quality, were poor nethods of retailing the product in the store. The frozen product was often allowed to stand all day on the grocer's counter. being put in the ice cream cabinet only at night. Sena frozen products, especially fish. were allowed to thaw and then sold as the fresh product. Such practices as these, and the sale of cold storage products as frozen foods, have given frozen foods some very bad publicity which is hard to overcome. As an example of how frozen foods were accepted in the early days, consider two of the laws passed in New York State. One of the laws stated that it was illegal to use frozen fish in Sing Sing Penitentiary. Another was, every store that retailed frozen foods had to have a sign eight inches high posted over the door, saying. Frozen foods sold here. By the summer of 1935 retail distribution of frozen food was in a state of collapse, except in New York City, Boston. Bocheetor and Syra- cuse where Birds Eye had tried out a new experimental sales policy. The 11 main features of this new sales and promotion policy were! 11 Ibid. p. 8. 13 1. Betail efforts were concentrated in the Northeast. 2. A less expensive mechanically refrigerated storage case was offered the retailer on a rental basis. 3. An established wholesale grocer was given exclusive distribution in each district. 11, A prominent food-advertising agency was given direction of the promotional advertising. Advertisements were directed to the housewife through her local daily paper. Following out the new retail distribution policies. Birds Eye had 1,200 stores equipped with cabinets by the end of 1935. By 1937 there were several other brands of frozen foods on the market besides the Birds Eye Brand. Among‘these was Honor Brand, which was a distributing agency for independent packers. As more brands came on the narket, there was more advertising and more outlets for frozen foods. In 1937, it was estimted that. 60 percent of the frozen food pack wont to processors for remanufacture, ‘50 percent to hotels and institu- tions while only 10 percent wait to the retail trade.12 During the war years, frozen foods. like most all food products. were in heavy demand and sometimes in scarce supply. lauy of the new packers who altered the field at this time did not pack a quality prod- uct. Iortunatelv, few of these packers are still in the business today. 'ith the addition of frozen concentrates to the frozen food line in 1915, the inmstry leaped ahead with unbelievable speed. citrus concen- trates were almost an immediate success. sparked with extensive 12 Garlton. @911. p. 63. 1h advertisizg campaigns, the grocers were given a frozen food item with a fast turnover-like bread or milk. Sales of other frozen food itms increased. Larger cabinets were installed in many stores: thousands of other retailers added frozen foods to their line and yet thousands of other retailers added extra cabinets for the sale of concentrates alone. he umber of stores handling frozen foods was estimated at from 35 to 55 parent Of the total of the l”WOOD grocery stores in the Mited States in 19,49}.5 Tor ease types of stores. such as large super markets and sole groups of chains, the number of stores handling frozen foods approached one hundred percent. But. one-half of all grocery stores retailing frozen foods indicate that frozen foods are not the expensive luxury its they were in 1930. 13 J. Stanford Larson. James A. Nixon and E. Clinton Stokes. mm 1am - Lanna whoa... (United States Depart- ment of Igriculmre, Washington. 19!"; p. 122. was III m mums 01' new IOODB It has been estimated that about 56 percent of all cannercial frozen food is distributed through facilities at the retail level. me other 1114 percent reaches the consumer through wholesalers and distributors. Out of the 56 percent going to consumers in retail-size packages, it is estimated that by far the larger part is marketed through retail stores. The remainder is sold by house-to-house salesmen and through locker plants.1 In view of the fact that selling frozen foods through the retail grocery store is a new development in the industry and considering how little the possibilities of such outlets have been promoted, it is believed that herein lies a great potential field for increasing outlets for farm products. The growth and expansion of froze: foods, especially in the imdiate future, depends to a large extent men how they are presented to the public at the retail outlets. I. MSWIRW The super markets appeared on the American retailing scene in the early 1930's but. as many food shoppers know, they are new institutions that are unique in the field of food merchandising. Irho super larket Institute defines a super market as 'A departmentized retail establish- l J. Stanford Larson and others. W m M - Fagin- nil)“ W. (Washington! United States Department of Agriculture: 19 9 p. 122. 16 sent having the four basic food departments! self-service grocery, meat, produce and dairy plus any other departments and having minimum annual salcs of $260.ooo.' his self-service type of store is a “natural“ for frozen foods and the small compact frozen food package is well adapted to the self-service system. In these large stores which offer complete “one stop“ shopping for the customer. frozen foods is a must. In a survey made by the Iational Association of Food Chains, the present median of sales for large volume stores with cabinets was 24/11 percent of total sales in frozen foods.2 In most locations, competition will force the super market to add frozen foods to the line of items sold even if customer demand is not strong enough to justify the expense. is stated by one operator, “I put in a line of frozen foods. not to sell, but for some of my customers who would shop somewhere else if frozen foods were not available in n store.‘ Large stores with an annual volue of business of over one million dollars often require thirty-two linear feet and more of displav cases for frozen foods. Besides this. many stores have additional cases for frozen fish. concentrates and ice cream. In mailer stores an eight-foot displav case is the minimum size ' display if frozen foods are to be merchandised pronerlv. In the survey made by the National Association of road Chains. nineteen linear feet 2 lational Association of Food Chains. 726 Jackson Place. Washington, 13.0. Survey was conducted in Tebruarv. 1980. Reported in , a Bulletin to member comanies. larch. 1950. 17 was given as the median length of display cases used in stores with less than one million dollars in annual sales. I In constructing or remodeling stores. some consideration should be given to the future need for frozen food display cabinets. “any of the stores constructed in 1996. 1997 and 19138 were equipped with onlv one or two eight-feet sections of display cabinets. As more people started buying frozen foods and as more items were added to the frozen food line, additional display cases were needed. IIhe installation of these new cases often required some major changes in the store. To avoid such changes in the future, some space at the end of the frozen food cabinets could be planned to be used for special displays or for some other purpose which could be eliminated or moved to another part of the store without changing the store layout. The super market is ideal for the retailing of frozen foods. Besides offering a complete ”one stop" shopping service. super markets operate on a cash and carry basis and are in a better position to offer frozen foods at a lower price than the other retailers. II. m sun. EIGEBOEOOD STOBI This type of store has long been a part of every American calamity. 'hile some of their business is I'on the spur of the moment'. purchases .such as bread and milk. many shoppers use them for making all or the larger part of their grocery purchases. These stores are about the only remaining retail food establishments where consumers can establish charge accounts and have foods delivered to their hues. 18 The type and size of frozen food case best suited for the neighbor- hood narket will depend on the method of selling used in the store. If the store is the self-service type. an open displav case of adequate length to display all the items. which the retailer wishes to carry. will be best suited for this store. In the seni-self-servics store. the open display. closed displav or "blind” storage cabinet can be used dspmding on whether the retailer wishes to Iake his frozen foods avnil- abls on a service or self-service basis. 'ith service type stores and telephone orders. the closed It blind storage cabinet is the most economi- cal to operate and. since the customer is "waited on" bv the clerk, the display abilitv of the frozen food cabinet is not as important as with the self-service system. The number of neighbomood grocery stores far out-number the super narkets but the indications are that the proportion of neighborhood stores who retail frozen foods, is less than the pronortion of super markets retailing them. However, the existence of the neighborhood grocery stores in large numbers. their large aggregate volume of business together with their nearness to the consmer, set hen up as strong potential outlets '5 for frozen foods. Irozen foods offer the slall retailer an opportunity to carry a comlets line of meats. fish and ponltrv without having a meat deparhent. In a rslativelv small frozen food case, this type of retailer can offer seats. fruits and vegetables. ice cream. concentrates and specialty frozen 3 Larson. Qa...§n.. p. 12?. 19 items. In effect. he can offer a complete line of food in a minim of space. Frozen foods can give the small retailer one more advantage in the battle for his share of the consmer dollar. III. we FROZEN I'OOD SPECIALTY smear. Irozen food mecialtv stores exist as independent retail establish- ments and as sections in deparhent stores. Ihe history of the indspm- dent specialty store is an interesting story in the field of food distribution. During and shortly after 'orld War II. these specialty stores came into existence almost overnight. Their growth was widespread but they became more abundant in the metronolitan areas. Their existence was possible because of the short supply of foods in relation to the tremendous demand. Trozen foods were obtainable by merchants when other foods were not and consumers were buying almost all kinds of food on the market. 'hen the nation's food supply began to adjust. itself after the war. these stores found themselves in an unfavorable economic position. The consequence was widemread business failure within this groan. In a survey, reported by the United States Department of Agriculture of fifty cities, it was revealed that there were only a. very few frozen food specialty stores still in operation in l9h9. In all successful cases observed. the frozen food specialty store was dependent on some other products to round out the business. In some instances, applim ces. particularly home freezers, were used as the supporting factor. In other cases. home delivery service was conducted in conimction with the operation of the store. lost of the stores. however. carried multiple food products. and in a strict h‘ Lanai. 99.913. p. 123. 20 sense were actually independent grocery stores that were featuring frozen foods. Two or three of these multiple food establishments were outstanding in their technique of operation. Actually these establishments were retail self-service food stores that had all of the perishable and staple commodities built around the frozen food section. Perishable and staple compdities were presented in such a way as to supplement or serve as a complement to a full line of frozen foods. cabinets used were, for the most part. of the open type and were so placed as to attract attention whm customers first calls into the store. Managers of hose stores indicated that busi- ness was good and it was their belief that theirs was the store of the future. Plans were being laid by these Operators to expand their facilities.5 In a publication. Retailing Irozen Foods, issued by the Iew York Department of commerce in 1916. several suggestions were made on opera- ting a retail frozen food business. The initial capital investment for fixtures and freezers was estimated at $34,000 to $6.000. stock, $1,000 and suggested working capital of at least $2.000 as the store would probably operate at a loss for the first three to six months. A small retail store dealing exclusively in frozen foods was not considered practical in 19%. It was suggested that other merchandise be included in the inventory as unit sales of frozen foods were small. due to lack of storage space in the home, and the more serious handicap of not being able to provide an adequate variety of frozen foods. other handicaps listed against the retail frozen food. store included lack of customer education to the benefits of frozen foods: competition from other types of retailers such as department stores, grocery stores and home delivery routes: delivery of fresh produce by air: and difficulty in finding a suitable location with high value of traffic not too far from the consumer's home. 5 Larson. 92.9.1.1... p. 123. 21 'ith such handicaps as these to overcome. it is not surprising that many of the retailers. who sold frozen foods exclusively, failed. lven todav. with manv of the earlv handicaps removed. there is some doubt if the 100 percent frozen food store would be profitable. In the last eight or nine years, a number of the nation's leading department stores have added frozen food retailing to their selling activities. These frozen food sections usually combine the retail section in the store with a hue-delivery service and at the same time associate both with the sale of homo freezers. In this respect they combine the functions of a retail specialty, .- home-deliverv agent and an applialce dealer. the joining of these various sales and services has certain advantages. Perhaps the biggest advantage lies in the application of some of the established principles of department store selling to the retailing of frozen foods. For example. they can easilv extend their charge accalmt system to cover frozen food sales. Irborough the sale of. frozen foods they can enhance the sale of hue freezers and vice versa. Iheir organization is well adapted to educating the consumer on the use of frozen products and. with their large financial support. they can afford to make long range plans for expansion of their frozen food busi- mess. Ihe actual retail section of the department store Operates .iust about the same as any specialty store except that nonfrozen foods usually are not carried as a supplement. similarly. the home delivery operation is conducted about as any other agency would perform it. ‘s stated before. the department store has some definite advantages in the retailing of frozen foods. Ihose advantages are heavv traffic, 22 delivery service. home freezer sales. charge accounts and facilities for consumer education. However, the markup in department stores is tradi- tienally 2‘5 to to percent. When compared with the markup of super markets of 16 to 20 percent. the comparison is not too favorable for the depart- ment store. 17. EM DRIVER! BOO!” The development of hone delivery routes for frozen foods was at its peak at the end of 'orld war H in 19’46. This system depended on people living out of their home freezers and there were only a handful of American homes that had the required freezer space. It was a case of too nany companies entering the field with too few customers to support then. he idea of home delivery has merit but because of the shortage of hone freezers and the high cost of this service in relation to the small sales value the system has not worked too successml for many operators. In the field of house—to-house selling only neal sill: nosiery, roller Brush and a few others have been very successful. Ihey were selling a high markup item which did not require an expensive refrigerated truck for the distribution of the product or special storage space in the hone. Bread. milk. coffee. tea. spices and other staples have been success- fully seld from house-to-house but these items benefit by quick tumcver when a large percent of the customers are in one block.6 lost of the routes of Jewel 1'ea and Grand Buion route sales divisions are in the urban area as customers are too far apart out in the country to be serviced at a profit. 6 1”est, Present and l'uture of House-to-House sales. 911mm Innis. November 1915, p. 61. 23 7 In the survey. reported by Larsen and others, of fifty cities. there were only eighteen house delivery services of any consequence in existence. i'hese eighteen do not include the few retail grocery and frozen food specialty stores whose house delivery service is merely incidental to their Iain operations. Of the eighteen establishments participating in house delivery, nine were departmentstores. three were ice delivery con- panics. one was a wholesale distributor. and the other five were specializing in hone delivery with a retail frozen food specialty store as a supporting fmcticn. In nest of the cases. the hone delivery ser- vices are operated in coniunction with home freezer sales. The aim is to get cabinets into the home and then service then with frozen foods. Bone operators rent the cabinets hoping to convert the rental to a sale. Other concerns sell the cabinet outright. Bone rental of cabinets involves a large outlay of capital and the responsibility of giving technical service to the cabinet. Rental fees are $2.50 to $3.00 per month which will usually apply toward purchase price if the freezer is bought later. Some companies in the delivery service have been taking orders by telephone. mesa companies compile a list of homes with zero storage space and solicit the owners by telephone for their orders. Orders are delivered on regular routes and the'prices charged are about the sane as at the local retail food store. When home delivery companies become stable and large enough to buy in carload lots and when a large percent of all homes have zero storage space for frozen foods, the home delivery routes may be able to undersell the retail store. 7 Larson. Q4. 91.1.. p. 125 2M Ihejprinary function of the home delivery agency is service. lost of these agencies are in a good position to broaden these services to include consumer education in ways to use and prepare frozen foods. Those fires that have been successful in home delivery have, for the most part, concentrated on serving the people in the upper income brackets. Ibis would indicate that nany'people who own deep freeze units are in the higher income brackets and. to a degree. that frozen foods are still considered.to be more expensive than other forns of food. he requirements for the successful operation of a home delivery service as listed by members of the trade include these factors: 1. Study the area to be served.as to home storage facilities, income, eating habits and general attitudes on frozen foods. 2. .Ayoid door-to-door selling and set up a delivery route system whereby customers are contacted and their orders taken in advance of delivery. 3. lave a minim number of ponds per customer that will at least cover the approximate cost of delivery. 1%. Either sell hone freezer units directly or have a working relationship with a local appliance dealer. 5. Allcwjprice discounts for quantity‘buying. thus giving the consumer an advantage over the usual retail price for the sane product. Hone delivery of frozen foods offers a challenge to present methods of distribution. If the system is properly applied. it nay aid the developnent of the frozen food industry. The home delivery companies are due considerable credit from the industry as a whole for their*sissionary work in acqoainting many custoners with the advantages of frozen foods. 25 V. m LOOm PLANES 8 Ihe first locker plant was started in Ohico, California about 1903. he local ice plant rented space to merchants to store eggs. apples and other produce. By 1908 this storage service was extended to farmers who stored meat and other products in wooden boxes. In 1913 locked boxes were used. The business had grown until a number of people were storing foods in the plant and some method was needed to protect the property of each patron. By 1917 the demand for storage space was so great that special storage rooms were built with lock boxes. About this same time (1917), an ice plant manager in Gentralia. Washington rented space to some of his friends for freezing and storage of wild game. The service was so successful that space was rented to farmers where meat, poultry and other food items could be stored. A number of other locker plants were started in the following years but it was 1936 before the freezer-locker was extended to all parts of the country and especially to the great meat producing areas of Iowa, Nebraska. Illinois and other mid-western states. Probably each of these "first” frozen-locker operations were original in that they started spontaneously in response to a demand. he trade divides freezer-locker plants into two general classes - 'limited service” and "complete service' - but there is no distinct dividing line. Generally, the limited service plant was operated as an adjunct to some other business, such as a butcher shop, creamery or cold 8 J’ . Raymond Adams. Lockers as Related to the Frozen Food Industry. WW- “1321‘. January. 19’41. 26 storage plant. It was the general opinion in the Northwest that less than five hundred lockers could not be operated economically as an inde- pendent business. In some parts of the East, small plants were installed and operated by grocery stores. The modern complete service plant is a well organized and well equipped food processing and storage plant with sufficient income frat various sources to constitute a profitable independent business. he services which are offered range from picking up the live animals on the farm. butchering, chilling. ageing, cutting up. wrapping, freezing in a modern quick freezer or cooking and curing and placing in the locker - to delivering the frozen products back to the farm as required. Some locker plants have installed equipment and prepare fruits and vegetables for freezing for their patrons on a free basis. The addition of facilities for retailing commercially frozen foods was Just a natural development for many locker plant operators. For other plant operators, especially those offering only limited service, the addition of retailing facilities was an economic necessity. The locker plant patron is an ideal prospect as a customer for commercial frozen foods. The locker plant patron is already sold on the advantages and benefits of frozen foods since he has zero storage space in his home or at the plant. 'hen stopping at the locker plant. his attention is on frozen foods so he should be receptive to displays and other sales aids within the plant. ‘Ihe locker plant is also an ideal place to retail frozen foods from a plusical viewpoint. fhe locker plant is usually located where it is convenient to a maJority of its patrons: zero storage is available for I2! 1 (A. r‘ 27 the wholesale storage of commercially frozen foods: the lobby of the plant is an ideal spot for display cabinets as all patrons pass through the lobby} parking space is umually'available which is very important to most am retailer. As more and more locker patrons purchase home freezers, the locker plant operator not secure other means of bringing in revenue.9 This may be accomplished by increasing the services offered customers in freezing their own products or by selling commercial frozen foods. the farmer who produces most of his own food is a good prospect for concentrates, ice creal, fish and other products which he does not raise or process himself. he urban locker patron may be a prospect for all or most all of his frozen food products. In a survey which was conducted by the Curtis Publishing Conpany, released in January, 1951. the grocery store held a four-to-one edge on the frozen food locker plant as the place of purchase for frozen “0(1th The locker plant is well suited and partly equipped to retail frozen foods. Perhaps in the future when the locker plant operator becomes more aware of the possibilities of retailing frozen foods. he will install more display cabinets, offer discounts on quantity purchases. stock larger sized packs for sale to home freezer owners and, in general, offer the consumer more for his frozen food dollar. There is plenty of room in the retailing of frozen foods for the 113% locker plants in the United Wm“ of hane freezers by large numbers of locker patrons may leave the locker plant operator without enough rented lockers to break even. 10 ll'nt'omn Foods Survey. 2n: MW 9.9mm- Janmry 1951. (Survey was conducted among the members of fifty-seven farm and rural women' s clubs. ) 28 States. American business is built upon competition. If the locker plants can retail frozen foods more efficiently than other retailers. it is possible that they will be much more important in the distribution of frozen foods in the future. CHAPTER IV OGDEN!!! POSITICU W FROZEN 100138 From modest beginnings a little over twenty years ago, frozen foods have developed into an industry which in a single year processes billions of pounds of fruits. vegetables. meat. poultry and other specialities. he position of frozen foods has changed, from an mwanted item by the grocer. to one. whereby the question is often asked. "Can a food retailer afford not to handle frozen foods?“ he answer is often as. especially when the complete line of frozen foods is considered. The food retailer of today who does not hndle ice cream. frozen fish and frozen fruits and vegetables is offering a limited food service to his customers and is probably losing business to his conpetitors. I. PERCENT CII' STORES MID 130231! 100138 Yhe percent of retail food stores who handle frozen foods has been 1 estimated by Larson and others at fro 35 percent to 65 percent. he variation resulted from differnces of opinion as to what is a food store and amount of frozn foods handled. 2 In a survey reported in the l'rozen l'ood Yearbook for 1950 as to the n-ber ef steree with facilities-for handling frozen foods. the results as shown in “table I were observed. l .J'. Stanford Larson. James A. linen and 3. Clinton Stokes. W 1! ozen 1199.1. (Washington, United States Department of Agri- culture. 1 9 p. 128. 2 laticnal 'holeeale Frozen Food Distributors. Inc. m M Yearbook. law York 17, law York. 1950, p. 76. [lullllillllll 30 Mill 8W8 WITH IADILI’IIES 1‘03 mum mm FOODS M1949 Chain Store Chain Store Self-Service Service Independent 2mm Pam: P3193; W 95 £1 11—— m 491 5L E...— W 95 ”EL u 11 a W 4.90 65 15 Int lozg cam; 9h 91 72 Wall: 9'5 86 51 8 Cent 95 9g 59 W 97 78 :m M _l90 1:90 55 1,391,139 :5 9h 89 Ihis survey was taken from the stores who report food prices for the Consumers' ,Price Index to me United States Department of Labor's Bureau of Inabor Statistics. he stores which handle certain ccncentrates as reported by he 3 United States Department of Agriculture are shown in Table II. 3 United States Department of Agriculhire. W 21 m, m and £22221 2min and incur soptember 1950. United State- Departmnt of Agriculture Publication. p. 16. 31 TIBIJII STOHS mum CERTAIN IROZIN JUICE AIEUST 1950 Orange classification Orange Grapefruit Grape- Grape Lemonade w m t d States 8 11 1 8 2151 19.9 3! Volume of Business Under $59,999 g5.) §._s 9.2 15.3 11.1 W 19.1! 23.3 m 35.1 W5 3.0-7 “My; M W 39.5 #6.! 63.2 52.1 55.}. By Type! of Management W ”3-8 “LL—.55.: elm; Regional and MM 9&9 3L5 W W1“. 35-2 ELL $13.3- 22.0 15.5 .L— Table I points out that he self-service chain store has the largest percent of stores with facilities for handling frozen foods. The percent- age is hidiest in the northwest part of the United States, reaching 100 percent in some areas. _ The largest percent of stores which handle concentrates, as pointed out in Table II are the stores with an overall volume of $100,000 or more in annual sales. In this table the national chains have the largest 32 percentage followed by the regional and local chains with the independents having the smallest percmt of outlets. II. mm 01‘ SAID In a survey by the laticnal Association of l'ood Chains through the cooperation of 51 members who operate ever 10.000 food stores. the averagle volume of frozen food sales was reported at 2-l/u percent of total sales. he latest survey reported by Chain Store Age indicated that approximately $0. 1‘!» out of each $10 spent in the grocery deparuent (excluding produce and meats goes for frozm foods.5 Sales of frozen foods in independent stores6were reported as: $1,000 per store in 19"? 2, 000 per store in 19%: 2.500 per store in 19319 3.000 per store in 1950 (estimated) To project these sales figures to all stores would mean a sales vol- ue of nearly two billion dollars. Actual sales in 1950 were about one billion dollars. 9 An American lagazine survey conducted among its subscribers, in 19%, showed that 82.7 percent of its respondents used frozen foods. he survey was broken down by income and city size groups and the results were as follows: 1t Iational Association of l'ood Chains. m M m. l'ebruary R1950. Washington, D. 0. Bulletin, March 1950. 5 Letter from Lawrence Drake. Editor, Grocery Edition, M an; Ass. 6 Gerald Ilenp, he Independent Retailers Yiews Irozen reeds. mm “”011 21. 1951- Po 3- 33 run In FROSTED roons ON THE FAMILY TABLE - BI FAMILY INCOME GROUP $2.067 $3 .000 T.ooo"“"$'s.'ooo $7.500 Under to to to to or $2s000 390001‘9000 5.000 7,500 More -..-...” in; 57.6 77.2 811.0 8% 86.11. 31.1 20 1191; Sam 22$ gas 15.9 1391 13.5 8.3 mm. IY FBOSTED FOODS ON THE FAMILY TABLE «- BY POPULATION OF CITY 500,000 100.000 25.000 2,500 or to to to Under Kore 500.000 100 .000 25. 000 2. 500 33p. 81.8 81.5 83,6 33¢ 3.319 The proportion of families purchasing frozen foods rose from 51 per- cent of those with incomes under $2,000 to 90 percent of those with incomes of $7,500 or more. In the lower income groups, frozen foods were served from five to seven times per week by 3 percent and in the higher groups by 16 percent. Thirty percent thought that frozen foods were too expensive, 19 percent never tried them. 17 percent prefer fresh foods, 9 percent disliked frozen foods, and 6 percent used home canned varieties. 3h Of those who bought frozen foods, NO percent bought them because thq' liked he flavor. 36 percent because they were convenimt. 22 percut because they were time saving. 10 percent because there was no waste and 9 percent because there was no cleaning. It is interesting to note that in Table IV the use of frozen foods varies little with the size of the city. It is probable, however, that in the larger cities more commercial frozen foods were used, while in the smaller cities a larger proportion of home frozen foods were used. III. Pn CAPITA GONSMPYICN hcept for a single year setback at the height of the war in 19h}, the per capita consumption of frozen fruits and vegetables has increased each year since 1935. During the three-year period ending in 19,48, average disappearance in the United States was five and six-tenths pounds per person. his compares with an annual average of only two-thirds of a pound during 1937-39 when the industry began to broaden the base of its distribution in cmsumer sizes.7 Before making my comparisons of the sales or consumption of frozen foods with other forms of food. it should be worth while to examine the total consumption of food. as shown in Table V. Using the average 1935-39 as 100. the total consumption of food was fine sue in 19u9 as it was in 1909. consumption of dairy products was up 10 percent in 1919 over 1909, but was down 9 percnt from 1946. Heat 7 Robert 3. Bottom. MW of in 1mm; Inns. and. Ingtgbleg m Business Information Service. United States Depart- ment of Genome. 99. Washington. D. 0. p. 11. 35 IDLIY APPROXIKATE GONSIMPTION OF FOOD PER OAPITA RETAIL WEIGHT EQUIVALENT Total in Pounde and in comparison with 1935-39 . 100 “—A L Leafy Other Total M.sne r sOt v . v Ve tIde -::‘_ T— 190; 368 35 161 a0" W 76 209 1.575 101: 1920 389 36 1’45 162 52 38 221 1,532 101 1930 385 no 139 M 60 as 216 1,522 100 19110 391 38 1M9 1'58 911 10h 23h 1.556 103 1916 #10 1+5 168 138 11k 129 253 1.70}: 112 1947 um. us 163 132 113 113 239 1.636 103 19113 1132 In 158 118 106 117 2'59 1.591 105 19kg ‘ 1129 159116“ .98_ 111 235 1,573 1011 consumption has remained almost level. Potato consumption was down 11-1/2 percent from 19% to 1949. Consumption of grain products was down but sugar consuption was increasing. The total weight of food consmed was down thirty-one pounds from 19116 to 19lr9. Tron this study of the consumption of food products, it can be assumed people are eating as much as ever but their diet is changing. People are eating less of the starchy foods, such as potatoes and grain products, and eating more vegetables, citrus products, eggs and sugar. In Table VI me cmsumption of frozen vegetables has been compared with the cmsuption of the canned and fresh product for the years 19% 6 3 .0312. em .33 nee—lung. .o .n Jonah-s: .aeulonoen casings no deform 6.33.323 we ocean—hen ..n :3. .33 dd: nag nag .afingaflflaflug .ecacous 2.3.2.8 3 28.3 is: b :3.- a "ll. 1|..II|».IIV'II.|I¢'.‘I -“"-‘IIVIUII -I‘sll‘l’lluitl"".lvv 31.1-! 1":"7 at w i - -- .... i. ....waqu mo. «q: j 85 as... 3. Juan. a: 52.11 a: 33143 1&8: anal 95 fig 5« mJH at mo. , 64.311 ac. aqmdw. am: 3 a4 la... and :4 DH 3? ii a Had! a a .m a ma. :4 7 34413 g: aiflwi. . mam. Ham.-- xii: .533: can 3 age Hugh 8 a .50 .3 302.3330 3 .5 saga HP :3 .871. a...“ .83 hoe—830m .od 533.23: 63333 on3d6§ no Ewan—5 .83333 no 303.399 .395 deans 2: ~33 3 .3335333 39509.. :4 . . . r . . ._ - . H u . .... c.7828 dalulwau 7: mm 1 3.. H fl: a. q in; new; 3 oq flu m. mnq flu wt i. m w. 3w «dag gem H— ...BHE gm.— 3 BE .go .8 Bum—fiance a ho Guam—Bo Hug . $1. lia‘ I.‘ 38 .omauah an .83 396038 .od $33.33: 6332303 cadet: no anon—pm .8393qu no 303.399 .33.". 33 £53 3 4353455333 Jonson... 3:33 83.: 3 .83.. :53 S... .338“ a uq €31.11: 3 w 8.: B. 3: 3 m5. WT: g H -1 a h am no 4.0.. an WHWJ‘ijioflfliJmfli -unwtca--aiia-wwmmomwowf 9de 53 ES mama . .n-gom_aH gaoE E3 :3 g E .go 3 355930 a U homage an: as 3'9 through 199. Peas have been the outstanding leader asong frozen vege- table packs from the beginning of this branch of tho industry. In 19in. peas accotmted for 38.2 percent of the total pack of frozen foods. he consulption of frozen peas has increased while the consumption of the fresh and canned product has declined.8 Idle. beans. second in imortance, accounted for 19.6 percent of the total 19147 pack of frozen foods and now leads the canned product in total ascunts consoled. Other frozen food itus which are conpetitive with the fresh and canned products are snap beans. spinach. corn, asparagus aid broccoli. l'rosen french fried potatoes have hem increasing in sales wol‘e but no figures were found on total consumption. he frozen pack of strasberries, as shown in Table 71! is such greater than the canned pack but nest of the strawberries are still con- sued in their fresh fern. there are far sore peaches consuled in the fresh and canned for: than frosen but the consumption of frozen cherries is significant when compared with the cmsulption of the fresh and canned for-I. table 1111 is a comarison of the cmsunption of citrus concentrates to the consuption of the fresh and canned product. Since all concen- trates are shown in one nusber. this table does not present the competi- tive picture of orange concentrate as clearly as figure 1. In figure 1 where purchases of orange products by consuers are shown on the basis of fresh orange equivalents, the sales of fresh oranges in 8 anummmw. mm m. United States Department of Agriculture. 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