Clean label reformulations can buffer frozen food sales’ slow but steady decline

By Adi Menayang contact

- Last updated on GMT

Photo: iStock/JackF
Photo: iStock/JackF
A slow decline is forecasted for total frozen food sales, which includes frozen dinners/entrees, pizzas, side dishes, and appetizers/snacks, according to Packaged Facts’ latest numbers.

Frozen food sales dipped by 0.1% in 2016, consumer data company Packaged Facts noted in its recently published report​. The category overall is expected to have a compound annual growth rate of -1.2% in the 2016-2021 period.

Its decline is attributed to competition from other conveniences, such as shelf-stable or refrigerated/fresh items, as well as the increase of snacking instead of meals​ among US consumers.

But the future isn’t all bleak for the frozen aisle. “A leading factor in slowing the decline will be marketers’ continued robust investment in product innovation,” ​the report said. Among the things that would drive purchases include “cleaner labels and healthier nutrition profiles.”

Convenience isn’t the only driving factor anymore

When buying frozen foods, quality was named by nearly 80% of Packaged Facts’ respondents (a panel of 2,000 US adults demographically balanced to the national population) in the highest regard.

Cost, healthfulness, and convenience follow, each carrying roughly equal weight. In fact, Packaged Facts’ analysis suggest that convenience may play a less decisive role than might be expected, “as consumers simply assume that this is a feature automatically associated with frozen meal items.”

To get ahead in the game, frozen food brands, especially for hot meals and entrées, have been reformulating their products to feature cleaner labels, which Packaged Facts defines as “using ingredients that consumers trust and recognize with no artificial flavors, colors, or preservatives; offering simplified recipes with fewer ingredients; and offering recipes that provide consumers with the same or better dining experience at a good value.”

This is reflected by the reformulation of legacy frozen food brands, such as Nestlé’s Stouffer’s removing a handful of ingredients from its products​, as well as the launch of many new brands marketing clean label as its main call-out, such as Good Food Made Simple​.

Who are the giants? Nestlé, ConAgra take the lead

According to Packaged Facts’ data, Nestlé is by far the largest of the marketers of frozen food, playing in all four categories (frozen dinners/entrées, pizzas, side dishes, and appetizers/snacks) with an estimated share of 17% of all products in 2016.

It’s followed by ConAgra Brands, with less than half of Nestlé’s percentage at 7% market share, and private label, which accounts for 4%.

But nearly two-thirds of the market, 57% in total, is made up of small brands that hold approximately less than 1% of share each.

Many of these smaller brands, Packaged Facts noted, are resuscitating frozen foods—Bellisio Foods introduced the EAT! line which specializes in global flavors with high quality ingredients, while The Mouth Meets South breathes new life into American Southern Food, claiming that it brought dishes like candied yams and collard greens into grocers’ freezers for the first time.

“It remains to be seen how successful all these efforts will be in the long run,”​ according to Packaged Facts. “But the immediate effect—is to encourage everyone concerned about the future of frozen foods.”

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