In today’s busy world, consumers are constantly looking for convenience in their fast-paced lives. Marketing and sales agency Acosta recently released a report – titled “The Future of Frozen,” – that found that 26 percent of consumers are shopping in the frozen food section more frequently compared to last year. The report identified millennials as the top 43 percent of consumers in this new trend.
“Although most shoppers feel fresh food is healthier than frozen, each generational demographic has reported buying more frozen food than last year, including 43 percent of millennials; 27 percent of GenXers; 19 percent of Baby Boomers; and 19 percent of silents,” according to the report.
Though the frozen foods industry has not seen a significant jump in sales yet, recording just 0.2 percent CAGR in the past five years, this increased interest in convenience is promising for frozen food manufacturers. Unit sales of several large categories of frozen meals — such as prepared foods, desserts, vegetables and pizza — have declined by 6.7 percent. However, earning reports from companies like Nestlé (Lean Cuisine), B&G Foods (Green Giant) and Pinnacle Foods (Birds Eye, Gardein) demonstrate the opportunity for a comeback within this category. Allied Market research even predicted an increased CAGR of 4.1 percent in this segment worldwide by 2020, resulting in potential revenues of $306 billion.
“Frozen food is certainly its own umbrella category, but its versatility allows it to span multiple mealtime occasions, which is why there has been a lot of room for growth and innovation across items and brands,” said Colin Stewart, Senior Vice President at Acosta. “Competition in the category is heating up as fast-paced Millennials, who often take greater interest in the health benefits of food than older generations, look to frozen as a way to eat well in a convenient and hassle-free manner.”
Consumers purchasing frozen foods this year are keeping an eye out for healthy labels on packaging. Seventy-six percent of purchasers are looking for foods that are made with no antibiotics and are hormone free. Seventy-three percent are looking for foods claiming to be all natural, 71 percent are interested in sustainability labels and 69 percent are interested in low-sodium content. Convenience is the top reason why 41 percent shoppers are in the frozen foods isle, with 32 percent of them purchasing ready-made meals because they do not spoil as quickly as fresh food.
“Retailers and brands should keep in mind that a majority of consumers are looking for quick and easy options, while continuing to search for products that provide variety and health benefits to their households,” added Stewart.
“However, frozen foods are one of the few categories that are still more frequently purchased in store than online, so these items just might be the key to drawing shoppers from the perimeter into center store, as shoppers can check many items off their grocery lists at once. Retailers should ensure the frozen section is easily navigable, and should keep end-cap freezers stocked with a variety of teaser items as to what else is available down the aisles.”
Acosta’s study is an indication of potential sales growth in the frozen foods category especially in the millennial market. This is an important generation to consider for food manufacturers because millennials are entering their peak earning years and will soon look for meals that will feed more individuals as their families grow.