Frozen convenience food sales to top $17bn

By Mike Stones

- Last updated on GMT

Strong demand for frozen pizza, handheld breakfast food, and prepared vegetables will help sales of frozen convenience food reach $17bn this year; up 2 percent on 2009, predicts the latest report from market research organization Packaged Facts.

Bucking the trend of generally flat sales in this sector, demand for these three products could rise by 10 percent to nearly $19bn in retail sales within the next five years, according to the report Frozen Convenience Foods in the US​. All three products are able to compete successfully on the basis of freshness and quality with the fresh convenience food category, said Packed Facts.

Ample opportunities

The organization’s Don Montuori said: "There is considerable activity in the frozen convenience food market and ample opportunities for growth within certain retail sectors and market niches. So while we do not anticipate substantial overall growth, we do expect some segments and individual marketers to grow considerably over the next five years​."

Sales of frozen foods are expected to thrive as marketers in other categories adopt similar strategies to compete with the parallel fresh convenience food market, restaurant takeout, and meals prepared from scratch by consumers.

Consumers’ growing interest in health and wellness, higher nutritional demands and world cuisines are opportunities for the frozen convenience food sector. “For example, due to packaging that serves as an excellent canvas for information about nutrition and ingredients, frozen convenience food marketers have an advantage over their competitors in the fresh convenience food sector and foodservice outlets.

“Likewise, as ethnic foods become more accepted by the general public, frozen food marketers have been expanding their base by further tapping the diversity of America's ethnic cuisines with new Indian, Japanese and Middle Eastern flavors, among others, while expanding their product range to encompass fusion flavors like Mexican-style, Thai-topped, and Jamaican Jerk pizzas​,” according to Packaged Facts.

Between 2005-2010, sales of general frozen convenience food slowed reflecting increased competition from fresh prepared food. “Marketers pushed forward with a wide variety of new menu items and merchandising strategies that dimmed frozen convenience foods' appeal… The frozen food categories and individual products that have suffered the most recently have lost out because they are seen as less fresh and more expensive alternatives to cooking from scratch​,” according to the report.

Compete successfully

But the frozen pizza and handheld breakfast categories were able to compete successfully with restaurants and other foodservice outlets. And, marketing strategies were able to build on the products’ perceived quality and freshness to position them as products that were lower-cost alternatives to dining out.

Also steaming techniques allowed the prepared frozen vegetable category to compete successfully against fresh produce.

The report Frozen Convenience Foods in the US​ is available from Packaged Facts at www.packagedfacts.com​.

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