Emphasizing freshness may help grow frozen foods

by Staff
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ROCKVILLE, MD. — While sales in the frozen foods segment will reach $44 billion in 2012, the market overall has been flat to declining recently with nearly all dollar sales increases attributable to inflation or new products and not increased consumer demand, according to a recent report on the topic from Packaged Facts.

Packaged Facts also predicts retail sales of frozen foods at all retail channels will remain sluggish, growing at 2% annually over the next five years and reaching $48.6 billion in 2017. Packaged Facts predicts frozen breakfast foods will lead the growth while the center-plate classification will have a hard time growing. The predictions exclude ice cream, frozen novelties, frozen yogurt and frozen beverages.

Packaged Facts said the nation’s slow economic recovery, changing consumer eating patterns, shopping patterns and demographics, lack of excitement in frozen food categories and merchandising, retailers’ increased focus on fresh foods and competition from fresh foods, shelf-stable foods and restaurants are all to blame for the lack of growth.

Emphasizing freshness is a way manufacturers may create more interest, according to Packaged Facts. For example, some frozen food manufacturers are competing against fresh foods directly, even citing research studies showing frozen produce is as nutritious or even more nutritious than fresh produce. Pinnacle Foods has even placed “fresh” in the Birds Eye product line, and when Healthy Choice launched its Steaming Entrees it promoted them with the tag line of, “Healthy Choice has nothing to hide with its new line of fresh-tasting frozen entrees.”

Frozen dinners and entrees are the largest part of the frozen food category, and sales reached $6.1 billion in mass-market channels for the year ended June 10, down 2.4% from the previous year. Frozen and refrigerated poultry had sales of $4 billion, up 0.5% from the previous year, and frozen pizza had sales of $3.1 billion, down 2% from the previous year.

Overall, 57% of shoppers said a preference for fresh foods was the top reason they had not recently purchased frozen foods, with the next top reason being a preference for home-cooked meals. Less than one in five shoppers said they had not bought frozen foods because they did not like the taste, do not have enough freezer space or are not confident in the nutrition or quality of the frozen food.

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