Consumers have long harbored mixed feelings about frozen foods. For some, they provide convenient meal solutions that can readily substitute for fresh foods. For others, they evoke memories of microwave dinners that never seem to cook properly and are reliably bland.
As manufacturers have repositioned their products with cleaner labels and as new natural, organic and high-quality manufacturers have entered the category, consumers’ feelings toward frozen foods have been thawing, however. Younger consumers in particular have discovered the freezer case, thanks to products such as Halo Top ice cream, Cascadian Farm organic fruits and vegetables and Amy’s vegan dinners.
Frozen food with health claims such as organic, gluten-free, non-GMO and free-from artificial flavors and colors, has been the shining star — and the strongest selling segment — of the frozen-food category, according to research from the National Frozen & Refrigerated Foods Association’s 2019 State of the Industry Report.
The report also found that the strongest demand for frozen foods has been among consumers age 35 to 44, although consumers under 35 are also drawn to certain items. Categories that appeal most to these younger consumers include good-for-you-marketed fare such as cauliflower, which has gained popularity as a low-carb starch replacement.
The COVID-19 pandemic has provided further incentive for consumers to discover the virtues of frozen foods.
“Across most categories, we have seen a real surge, especially in channels … where consumers are buying for future consumption at home,” Samrat Sharma, leader of the U.S. consumer packaged goods practice at consulting firm PwC, told CO—. “Frozen is no different.”
Sharma estimated that sales of frozen foods have surged 25% to 30% across both brick-and-mortar and online channels during the pandemic, including an increase of 20% in the online channel.
The freezer is among the very best tools we have to preserve two of the attributes that matter most when it comes to food: flavor and nutrition.
Joshua Brau, founder, Ipsa Provisions
Convenience and care
The frozen food industry is seeing a spike in popularity, but not at the sake of quality. Read on for more industries that are succeeding presently, even amidst the COVID-19 pandemic.
“Frozen foods and perishables have always been a bit of an outlier when it comes to e-commerce, but as e-commerce sales increase, the sales of frozen food and fresh produce through those channels have also increased,” he said.
Among all the product categories surveyed in recent PwC consumer research, frozen foods had the highest increase in online sales during the pandemic — albeit off a lower base, Sharma said.
Research from the American Frozen Food Institute found that retailers’ frozen foods aisles are attracting new consumers who do not typically buy frozen items. In addition, the research found that 70% of consumers who bought frozen foods during this time said they bought more frozen foods than usual.
Frozen foods generated double-digit, weekly sales gains in April and May, said Anne-Marie Roerink, principal and founder of 210 Analytics, the research firm that compiled the AFFI report. “There are few signs that the elevated everyday demand will diminish any time soon.”
The gradual reopening of restaurants across the country is attracting some spending back to food-away-from-home channels, but Sharma said he expects consumers to continue to spend more of their food dollars at retail, rather than restaurants, which bodes well for frozen food brands.
Indeed, “we expect at least $4 billion to $5 billion per week above normal levels in grocery buying,” he said. “There will continue to be heightened level of demand through food-at-home channels.”
Consumers change habits
In addition to finding increased spending on frozen foods, AFFI reported that 68% of consumers said they bought different frozen items than they usually buy, and 72% said they purchased different brands, because of availability.
Sharma said brand-switching has occurred not only in frozen foods but in other categories, as well, for several reasons. One is that consumers’ traditional brands might have been out of stock; another is that consumers might have shopped different retailers or different channels — perhaps online instead of in-store — where their favorite brands were not available; and a third reason could be that consumers have begun trading down to less expensive brands, such as private labels, as a cost-saving measure.
A spokesperson for Cincinnati-based Kroger Co., the nation’s largest operator of traditional supermarkets, said research from its insights and analytics business, called 84.51°, revealed that 85% of consumers report that they have changed their shopping habits due to the pandemic.
“Because of this, we’re seeing consumer shopping behavior evolve almost on a weekly basis,” the Kroger spokesperson said.
Within the frozen food categories, sales of frozen pizza “rose significantly” as stay-at-home mandates were ordered across the country in mid-March, the retailer said.
According to research firm Nielsen, the frozen department super-categories with the highest growth year-over-year for the eight-week period ended April 25 were:
- Fresh meat, up 72.6%;
- Dough and batter products, up 68.7%; and
- Beverages, up +67.1%.
Additional categories of note included:
- Frozen pizza, up 63.2%;
- Frozen French fries, up 62.7%; and
- Ice cream, up 29.5%.
Sales of frozen foods had already been on the rise before the pandemic hit, in part due to the proliferation of higher-quality, clean-label and organic and natural products, and those patterns are expected to have staying power in the post-COVID-19 world, said Sharma of PwC.
“We have seen that millennials have voted with their wallets for companies that have a better-for-you and socially conscious [positioning], and now even more consumers are doing so,” said Sharma.
Kroger said 40% of consumers reported eating more indulgent and comfort foods during the pandemic, but they also gravitated toward healthier options as they cooked more meals at home.
“Kroger continues to focus on offering a wide variety of natural and organic food, including frozen products,” the spokesperson said.
Blue Apron meal kit veteran sees a niche
One veteran of both the meal kit and restaurant industries is seeking to capitalize on consumers’ growing interest in high-quality frozen foods.
Joshua Brau, the former brand director at home meal replacement company Blue Apron, recently launched Ipsa Provisions, which makes and delivers gourmet frozen meals in New York City.
“The freezer is among the very best tools we have to preserve two of the attributes that matter most when it comes to food: flavor and nutrition,” he said.
He said his own quest to find frozen meals that met his desire for “thoughtful” recipes and high-quality ingredients made him realize there may be a need for such products.
“Having devoted much of my career to helping people eat better in one way or another, I became convinced that there's an untapped resource in every single home kitchen in America,” Brau said.
He contends that most frozen meals offered in supermarkets are focused squarely on convenience, with prep often as easy as pressing a button on a microwave. Ipsa, he said, seeks to offer a menu of “elevated American classics,” like tuna noodle casserole and chicken pot pie meals, that often include some assembly, such as having to boil pasta (which is delivered dry and uncooked).
Brau said that for now Ipsa is focused on creating a great experience for existing customers, but he sees the potential for expansion.
“We believe taking an intentional approach to growth in the early years of the business will help lay a foundation for Ipsa to one day become a beloved institution of the American diet,” he said.
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