Improved packaging, natural ingredients will help frozen foods hold their own

By Elizabeth Crawford

- Last updated on GMT

Packaging, natural ingredients will help frozen foods hold their own

Related tags: Meal

Sales of frozen foods will hold their own in the next few years despite increased competition from retailers selling more ready-made foods and consumer preference for fresh ingredients, according to Packaged Facts. 

In a new report​ it explains that sales of frozen dinners, side dishes, appetizers and snacks fell a slight 0.3% in 2014 to $22.3 billion from 2009, but will more than make up the difference with a projected 0.8% increasing compound annual growth rate through 2019 to reach a projected $23.2 billion.

This growth “will be based on the ability of major marketers to adjust to the changing consumer environment that calls for more variety (in terms of flavors and serving styles), healthier foods and better pricing,”​ Howard Waxman writes in the Packaged Facts report. Improving packaging, appealing to consumer interest in convenience and providing a creative outlet for home cooks also can boost sales, he said.

Overcoming freshness perceptions

“Frozen foods of all kinds of have been challenged in recent years as a result of the convergence of several trends, especially, but not exclusively, a growing demand for fresh products or, at least, fresher products in the refrigerated rather than frozen form,”​ Waxman said.

Manufacturers in the last few years have tried to counter consumers’ perceptions that frozen foods are not fresh through national campaigns, such as the American Frozen Food Institute’s efforts to educate consumers about how the nutrient content in fresh and frozen foods are the same because “freezing is simply nature’s pause button.”

But, Waxman says, individual companies need to go beyond national campaigns and call out on packaging natural and organic ingredients, which consumers also view as more healthy.

“Frozen products identified as natural and/or organic appear to be having a more positive experience than frozen foods in general,”​ he explained. “Consumer concerns about preservatives and other ingredients are alleviated by the notion that if the products are natural or organic, they must be fresher or, at least, healthier.”

Hand-in-hand with this effort, manufacturers should play up how frozen foods “offer a better potential value than fresh foods in terms of their pricing,”​ Waxman said.

He explained that “cost remains a challenge for many consumers, especially in the weak economic recovery,”​ but that “organic and natural frozen foods appeal to the consumer who is both cost conscious and health conscious.”

More choices could equal more growth

Launching new products with bold flavors that fuse different cultural influences also will appeal to younger shoppers who are drawn to cuisines that are difficult to recreate at home.

“While Hispanic products proliferate in the frozen dinner/entrees section, they are far from being the only ‘non-mainstream’ cuisines designed to catch the attention of more adventurous consumers,”​ according to the report.

“There are a host of products, many from smaller, specialty manufacturers that offer consumers new and exotic eating experiences,”​ such as Saffron Road’s Korean Style Tacos, which launched last year and “break new ground by mixing ethnic cuisines.”

Offering more options of serving sizes and configurations can also generate interest in the category, according to the report, which advocates options such as single-serve, meals for two and family packs.

Creating frozen meal kits that require some assembly also taps into consumer interest in being creative and wanting to feel like they did it themselves, the report notes.

Capitalizing on snacking trend

Finally, Waxman suggests, manufacturers could generate growth in the frozen category by positioning appetizers as snacks, which consumers are eating more than ever.

“Survey after survey has pointed out that consumers are snacking more than ever, to the point of using snacks as meal components and even meal replacements,”​ Waxman writes. “The growth in snacking is one of the potential bright spots for frozen.”

However, firms would need to overcome the time delay of reheating frozen foods as snacks, which is not a barrier for other options in the popular better-for-you snack segment, such as nutrition bars.

Improve marketing, social media presence

Manufacturers also need to revamp the way they market frozen foods by more effectively using social media, Waxman suggests.

“The majority of marketers are using social networks or digital media but it appears that they are basically using new media to offer the same type of advertising and promotional activities that they did before there was Internet, much less Facebook or Twitter,”​ he said.

He explained that expanding their presence on social media and the internet would behoove frozen food manufacturers because these platforms have played a large part in people learning about food quality and healthy eating and turning consumers away from frozen foods, which they perceive as made with artificial ingredients and preservatives.

Lingering challenges

Highlighting benefits beyond convenience will become increasingly important to frozen foods success as retailers offer more ready-to-eat foods marketed for their ease of consumption, according to Packaged Facts.

“Supermarkets and other food retailers have been upping the ante in a bid to take sales away from food service – and in the process frozen foods – by offering even more convenience than that offered by frozen” ​foods, the report explains.

Retailers also are “rolling out programs that package several branded and private label products together and the recipes show how to turn them into a meal,” ​which also cuts into frozen foods’ cache as convenient meal solutions, the report notes.

Frozen food marketers also should brace for more competition as more private label and food service brands enter the category, the report cautions. 

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