Frozen Sales Looking Up

9/20/2013

Last year’s chill heating up with encouraging data.

While frozen food sales were essentially flat at $44 billion in 2012, business seems to be looking up lately, if results from the 30th annual March Frozen Food Month are any indication. The month-long focus on frozen foods showed an “encouraging” lift in dollar and unit sales as compared with last year, according to the Harrisburg, Pa.-based National Frozen & Refrigerated Foods Association (NFRA), sponsor of the promotion.

“We made a concerted effort to reinvigorate the March promotion, encouraging retailers to plan early, get their supplier partnerships in place and promote Frozen Food Month in a big way,” says NFRA President and CEO Skip Shaw.

The 2013 March campaign helped achieve a 4 percent increase in dollar sales and a 3 percent increase in unit sales over the previous year, according to data from Schaumburg, Ill.-based Nielsen Co.

“Dollar sales grew by 1.6 percent and unit sales by only 0.4 percent through Feb. 23 of this year,” notes Todd Hale, Nielsen’s SVP for consumer and shopper insights. “The March numbers show things are looking better. All but three categories drove unit growth. Only ice, frozen novelties and frozen juice didn’t show gains, but their performance was hindered by better-than-expected year-ago growth during our unusually warm 2012 winter.”

In recent years, new products, rather than increased consumer demand, have been contributing to almost all dollar sales gains in the frozen food category, Packaged Facts research shows.

In addition, retailers’ continued emphasis on the fresh food perimeter, coupled with slow economic recovery and changing eating and shopping patterns and demographics, has hit both the refrigerated and frozen sectors.

Campaign of the Titans

In reaction to these negative influences, the country’s leading frozen food suppliers have decided to step up their game, particularly in light of fast-food chain Wendy’s decision to market its beef as “fresh, never frozen” — yet another sign of our society’s love affair with fresh food.

Earlier this year, a report in AdAge revealed that the American Frozen Food Institute and the Frozen Food Roundtable — a coalition of companies including ConAgra, General Mills, H.J. Heinz, Kellogg Co. and Nestlé USA, along with Walmart — have joined forces to plan a $50 million campaign that will emphasize the nutritional benefits, along with other positive attributes, of frozen foods. The campaign is expected to launch later this year.

At least one major frozen food manufacturer has already begun ramping up its marketing efforts. Earlier this year, Omaha, Neb.-based ConAgra launched a campaign for its Healthy Choice and Marie Callender’s brands to help consumers “better understand the benefits of frozen meals and experience frozen foods in a new way.”

There’s plenty of innovation among other brands, too. Just in time for back-to-school preparation among U.S. families, Pillsbury Toaster Strudel has launched a fun new advertising campaign, shifting gears from previous years’ efforts. Spearheaded by the brand’s new ambassador, Hans Strudel, the campaign includes TV spots, as well as digital and social efforts. While moms are the primary target, the brand is broadening its reach by appealing to a new audience: millennials.

Behind the Freezer Doors

Unfortunately, innovation hasn’t been as evident in retailers’ frozen aisles. A Progressive Grocer editor observed, during a recent visit to a Kroger store in the Atlanta market, that fresh food — including meats, seafood and produce — had a prominent place in a grab-and-go section at the front of the store. Not surprisingly, frozen foods took a back seat in the store layout, as is the case at most supermarkets today, and that isn’t surprising — after all, fresh food is still king among consumers.

Yet plenty of shoppers in this Kroger were sauntering in the frozen food aisles, on the other side of the store. A college student headed straight for the large frozen pizza selection, while several busy moms studied the variety of frozen vegetables and ice cream. Meanwhile, a middle-aged professional was engaged in looking at ready-made frozen meals.

Natural and organic frozen foods — a definite area of growth in the industry — were merchandised in a separate section in the front of the store.

This small but typical picture of U.S. retailing today offers a glimmer of hope for the potential of a frozen food renaissance. If the industry can convince consumers that this segment offers plenty of convenient and healthy options for snacks, meals and desserts, there’s still room for growth.

There’s no doubt that retailers will have to lavish plenty of attention on this section so that it doesn’t go unnoticed. Meanwhile, they’ll certainly rely on manufacturer innovation to help drive new product growth (see the New Product Showcase, starting on page 105, for several examples of product innovation). Private label will also certainly continue to play a key role in refrigerated and frozen foods, since most consumers are still so often seduced by a good deal.

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