etter-for-you foods have hit the frozen food
aisle. And that’s good news for a center store
category that’s been taking a back seat to
A recent Packaged Facts report (Frozen Foods in the
U.S.: Hot Meals, Sides, and Snacks, 6th Edition) found
frozen foods losing ground to their shelf-stable and
refrigerated/fresh counterparts from 2014 to 2016, even
though frozen foods are considered the most affordable
and most convenient among packaged food products
consumed as hot meals.
The good news: The frozen foods category has a 99%
household penetration, and innovation—in the form of
new flavors and better-for-you formulations—is boosting sales.
“The market is being strengthened by robust investment in product innovation, which includes developing
bold and unique flavors, varieties inspired by world cuisines, product offerings that accommodate special dietary
concerns, and products with cleaner labels and healthier
nutrition profiles,” the report says.
Exploring the Category
Industry data paints a detailed picture of what’s
been happening in the frozen food space.
“In general, for the last several years, this
large category of $7 billion has fluctuated in the range of
flat to 1% in dollar growth,” says Don Catalfu, division VP
for Nestle Food Division.
For the calendar year 2017, he says, “The frozen prepared meals category, as tracked by Nielsen, posted category dollar growth of 0.9%, while units were down 1.7%.”
However, underperforming segments and bright spots
exist within the category.
“Category unit decline for 2017 was driven mainly
by single-serve economy/value brands, down 5.5%,”
says Catalfu. “The bright spots for 2017 revolve around
better-for-you single-serve premium brands driven by
new users that are finding increased category relevance
through the expansion of modern health benefits such
as plant-based proteins, organics, gluten-free and more
authentic global recipes.”
The relatively newfound intersection of convenience
and healthier profiles is further fueling category growth.
“Although consumers are more focused on cooking
at home and consuming less processed foods, there is
still a demand for convenience,” says Linda Zink, SVP
of innovation for Atkins Nutritionals Inc. Frozen meals
typically have met the demand for convenience, she
adds, but have generally ignored the call for better-for-you ingredients.
However, there are changes afoot that are benefiting
manufacturers and retailers alike.
“Every retailer we have engaged with has said that
their organic and natural offerings in frozen are a source
of growth versus the remainder of their frozen sets,” says
David Perkins, founder of Beetnik.
According to The Future of Frozen, an October 2017
report from Acosta, 26% of total U.S. grocery shop-
pers reported shopping the frozen foods depart-
ment more frequently during the previous year,
with millennials leading the way.
Forty-three percent of millennials reported
buying more frozen food items, followed by
Gen Xers (27%), baby boomers (19%) and
silents (19%). The attributes those shoppers
ranked as most important in making pur-
chasing decisions were no antibiotics (76%),
hormone-free (76%), all-natural (73%), sus-
tainable (71%) and low-sodium (69%), the
Savvy manufacturers are taking customers’
interests to heart by addressing what Margot Gunther, marketing manager of Dr. Schar USA Inc., calls
“barriers to purchase.” Products that are high-protein, low-calorie and low-fat, as well as those that
address specific dietary needs such as gluten-free,
Fridge & Frozen
Foods to Rise
Flavor and ingredient innovation is
driving the category. By Kathleen Furore
Although consumers are
more focused on cooking
at home and consuming
less processed foods,
there is still a demand for
convenience.” —Linda Zink, Atkins Nutritionals Inc.