US: Frozen foods need to turn a fresh page

Volumes in the US retail frozen foods market are going backwards, according to a new report from Packaged Facts, with category decline being blamed on a series of factors from misconceptions about the merits of frozen vs fresh prepared food, to lacklustre merchandising.

The report, “Frozen Foods in the US,” notes that sales in the $44 billion US retail market for frozen foods have been flat to declining, with nearly all dollar sales gains attributable to inflation or new products – not to increased consumer demand.

Contributing to this stagnation are the nation’s slow economic recovery; changing consumer eating patterns, shopping patterns and demographics; lack of excitement in frozen foods categories and merchandising; retailers’ increased focus on the fresh foods perimeter to the detriment of centre store categories; and competition from fresh foods (including prepared fresh foods), shelf-stable foods, and restaurants.

This situation presents huge challenges and opportunities for marketers and retailers. Major marketers such as ConAgra, Heinz, and Unilever are already slimming down and refocusing their brand portfolios.

One way that frozen food marketers are stepping up to the plate is by emphasising freshness, according to David Sprinkle, publisher of Packaged Facts.

Although “fresh” would seem to be an oxymoron in frozen foods, frozen food marketers are increasingly squaring off against fresh foods head on, for example by citing research studies which show that frozen produce is as nutritious, and in some cases even more nutritious, than fresh produce.

The emphasis on freshness responds to shifting consumer priorities. According to an August 2012 national online survey by Packaged Facts, a preference for fresh foods is the top reason (57%) shoppers cite for not buying frozen foods in the last three months, followed by a preference for home-cooked foods (35%).

In comparison, fewer than one in five shoppers say they have not bought frozen foods because they don’t like the taste, don’t have enough freezer space at home, are not confident in frozen foods’ nutrition, or are not confident in frozen foods’ quality (a concern that is, nonetheless, notably more prevalent among women).

However, there are pockets of growth, with strong sales in frozen baby food, cookie dough, fruit and breakfast foods, although the largest categories – frozen pizza and dinners/entrees – are dragging the overall category down.

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