Sovos Brands is adding a brick-oven-crust pizza to the Rao’s Homemade lineup, which already includes sauce, pasta and frozen chicken parmigiana and lasagna.
The premium pizza, with a suggested retail price of $12.99, has sauce made with San Marzano Italian tomatoes, freshly sauteed garlic and onions, and fresh basil. It is available in four varieties: Five Cheese, Meat Trio, Fire Roasted Vegetable and Uncured Pepperoni.
The new items enter the frozen pizza category with a premium focus, but at a time when U.S. consumers are watching their spending amid soaring inflation.
At a time when many recent IPOs in the food and beverage space have struggled, Sovos Brands has been a standout and Rao’s is a big reason why.
Rao’s is one of the fastest-growing center store brands of scale in the U.S. and represents more than half of Sovos’ portfolio in terms of sales, according to SPINS. Rao’s, which has posted double-digit distribution growth every quarter since it was acquired in 2017 by Sovos, is on track to grow to a $1 billion brand.
Sovos’ playbook is to acquire and build “one-of-a-kind” disruptive brands that contain recognizable ingredients. The $1.4 billion company also owns Michael Angelo’s Gourmet Foods, Noosa yogurt and Birch Benders waffles and pancakes. Sovos then takes the brands and not only innovates the core offerings but also moves them into adjacent categories — for example, Rao’s into soups, Birch Benders into cookies and Noosa into gelato.
Rao’s move into pizza is a logical extension of the Italian-focused brand. And the use of fresh ingredients provides a way for the brand to differentiate itself from other products in the competitive frozen pizza category.
Despite the pizza’s $13 price point, Sovos appears confident that consumers will be willing to pay more to have the premium experience at home.
CEO Todd Lachman told Food Dive earlier this month that the company is benefiting from shoppers cutting back on travel and leisure, including dining out. While consumers are stocking their pantries with more private-label goods, Lachman conceded, they also are trading up to premium offerings as a way to indulge and more closely replicate the restaurant experience, but at a fraction of the cost.
It may be counterintuitive, but with inflation raging and shoppers cutting costs, a Rao’s pizza may now be a very attractive option for some consumers.
“Our brands are faring very, very well in this environment,” Lachman said before the pizza launch was announced. “It’s just supercharging already strong growth in regards to our ability to add households to our brands.”
Rao’s pizza will be going up against well-established, mainstream brands. In many cases, competitors’ products sell for much less, so they may continue to be an attractive option for many shoppers, especially those who are cash-strapped.
Frozen pizza sales for the 52 weeks ending Aug. 7 totaled $6.4 billion, a 6.7% jump from a year ago, according to IRI, a Chicago-based market research firm. Nestlé’s DiGiorno is the top seller in the category with nearly a quarter of sales valued at $1.4 billion during the period, followed closely by Schwan’s Red Baron at $1.1 billion and private label in third at $806 million.