Fresh & Easy Neighborhood Market Extending its 'eatwell' Healthy Foods' Brand Into Frozen Food Category

The frozen foods section in a Fresh & Easy Neighborhood Market store, home to the grocery chain's new 'eatwell' brand frozen items.

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Fresh on the heels of the recent extension of its 'eatwell' private brand into the dry grocery category, from its original fresh-prepared foods origin, Tesco's Fresh & Easy Neighborhood Market is extending the healthy foods brand into the frozen foods category, and is set to launch the first 'eatwell' frozen products into the stores soon, Fresh & Easy Buzz has learned. The brand was launched in April, 2010.

The initial 'eatwell' frozen category items being introduced aren't "original items." Rather, the first batch of SKU's in the line consists of duplicates of some of the existing 'eatwell' refrigerated, ready-to-heat meal and side-dish items. The 'eatwell fresh-prepared foods line also includes ready-to-eat foods like salads and sandwiches. Those types of ready-to-eat foods aren't a part of the frozen line.

Tesco's Fresh & Easy has reformulated the refrigerated, ready-to-heat 'eatwell' items its launching in the frozen line, changing or adding certain ingredients but with just slight variational differences, to take into consideration the fact they're frozen rather than refrigerated products.

One advantage of offering a frozen version of some of the refrigerated 'eatwell' meals and sides is that the in-store shrinkage - and thus Fresh & Easy's having to mark down the fresh meals by 50% near the end of the shelf-life, and throw product away when the sell-by dates are up, which it does regularly with its fresh-prepared foods - is significantly eliminated, since frozen foods have a much longer shelf-life than refrigerated products do.

Additionally, having 'eatwell' items in the frozen category could add both brand and overall sales, since customers could purchase the frozen SKUs to store in their home freezers for use at a later time, which is something shoppers can't do with the refrigerated, fresh-prepared meals and sides because of the short shelf-life of the products. We call this concept "freezer loading." It's the frozen food category version of "pantry loading."

On the other hand, offering identical or near-identical 'eatwell' brand items in both refrigerated and frozen (and dry grocery) versions runs a risk of diluting the brand as it was originally created, as a fresh, refrigerated product. But that's a challenge with all cross or multi-category brand extensions, although fresh-prepared foods, because of their special fresh attribute, are more critical because often the brand name is designed to define the key product attribute - fresh. Using the same brand name on fresh foods, canned foods and frozen foods therefore has the potential to create brand confusion with shoppers.

At present, Tesco's Fresh & Easy doesn't plan on eliminating any of the fresh-prepared 'eatwell' items being duplicated by the new, frozen varieties.

However, we suspect the grocer might monitor the situation closely. For example, if sales of the duplicate frozen SKUs are as good or better than the refrigerated SKU's of the same variety, considering the longer shelf-life/less shrink issue, it wouldn't be a stretch to think Fresh & Easy Neighborhood Market might consider eliminating some of the fresh duplicates - in a SKU cut-and-paste sort of way - in favor of the like-variety frozen SKUs.

However, according to our sources, there are no current plans to eliminate any of the refrigerated 'eatwell' items and replace them with the duplicate frozen SKUs.

It's clear Tesco's Fresh & Easy has decided to make its six month-old 'eatwell' brand a multi-category private brand, having taken it from its introduction in April of this year as a fresh-prepared foods brand, to its recent extension into dry grocery, and now its introduction into the frozen foods' category. Those three categories, along with fresh produce and meat, make up the vast majority of sales in the 163 Fresh & Easy stores.

Related Stories:

>August 18, 2010: Fresh & Easy Neighborhood Market Extending 'eatwell' Healthy Foods' Private Brand Into Dry Grocery Category

>April 2, 2010: Fresh & Easy's New 'EatWell' Healthier Fresh, Prepared Foods Brand to Hit Stores on April 7

>April 1, 2010: Tesco's Fresh & Easy to Launch New 'EatWell' Brand Lower-Sodium, Fewer-Calorie Prepared Foods Line

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