Chili's Finally Hits the Freezer Case -- Without Its Signature Items

Menu for Supermarket Line Is Different From Restaurant Offering

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Chili's is rolling out a grocery line, but you might not recognize the menu.

The chain's freezer-case of feature single- and multi-serving dishes comes a long time after other casual-dining chains like TGI Friday's and P.F. Chang's introduced frozen food at the supermarket. It also comes amid a protracted sales slump for supermarket frozen foods.

So why even bother? Chili's thinks it can bring something no other brand can. "We loved the brand and the idea of bringing Southwestern to the freezer, something that's been missing in frozen-entree category," said Mark Toth, VP-marketing at Bellisio Foods, which also markets Michelina's frozen foods and is working with Chili's.

Mr. Toth said that research showed that consumers are looking for two types of food: full-flavored items and better-for-you products. Chili's and Bellisio saw an opportunity to for "bold flavors" that consumers want, but found that what works in a restaurant might not fly at retail.

"The strategy is not to take existing products and force them into retail -- it's seeing the opportunities that exist in the grocery store," said Claudia Schaefer, VP-food and beverage development at Chili's. "Once we understood what works in the grocery store, we applied we those same formulas," to new products said Ms. Schaefer. Or, as she puts it, 'Chili's-ized' it."

The result was items in the new line including Bacon Mac 'N' Cheese; Cajun-Style Chicken Alfredo; Cheesy Chicken Pasta Florentine; Chicken Fajita Rice Bowl; Island Chicken & Rice and Mango Chicken with Rice. The line will be available June 2 at some 14,000 supermarkets.

Marketing will, at least for now, not include TV, and instead will focus on digital and social media, couponing and a significant in-store effort to have consumers sample items. The campaign was created by MDC's Colle & McVoy, Bellisio's new agency.

The Chili's products are hitting as several major marketers, including ConAgra, General Mills, Kellogg, Nestle, Heinz and Hillshire Brands, launch a campaign called "Frozen. How Fresh Stays Fresh." Created by Interpublic Group of Cos.' McCann, the push seeks to revive sluggish frozen-food sales.

The category is declining overall, but has pockets of strength. In the first quarter 2014, the category for single-serve frozen meals was down 5% in sales, according to Euromonitor. Multiserve entrees for the same time period dropped 4.5%. Yet, for instance, Healthy Choice Cafe Steamers was up 40%.

The move also comes as casual dining chains like Chili's and Red Lobster are seeing weak sales as consumers step down to fast-casual chains.

But Bellisio and Chili's aren't too concerned. "Despite the decline, frozen foods are still a multi-billion dollar industry and extremely relevant to consumers," said Mr. Toth. "We believe these products will help define the future of frozen meals and infuse the frozen food category with new energy, innovation and excitement."

Virginia Lee, senior research analyst at Euromonitor, said that Chili's frozen meals will likely have an initial spike of sales based on curiosity. "It can do well initially and will help Chili's brand recognition," said Ms. Lee, who cautioned that the category has trended down, especially for products with relatively few marketing dollars behind them.

That said, Ms. Lee noted that Chili's does have a unique position in the category. "I would agree that this is unique in the category. A lot of people are looking for bolder flavors and the Southwestern flavor profile is appealing to a lot of people."

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