Frozen Food Aisle Sees Growth of Store Brands
One in five consumers who purchase frozen food items usually buy a store-brand product, and that figure is growing, according to “The Power of Frozen 2023” report from the American Frozen Food Institute (AFFI) and FMI – The Food Industry Association.
The big factor turning the eyes of consumers toward private label products, unsurprisingly, is price. While private label and national-brand frozen products each saw unit share erosion in 2023 — down 3% for private label and down 5.4% for national brands — both segments saw dollar sales grow 7.7% during the prior year.
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Also notable is the rather weak brand loyalty that consumers have within frozen food despite the category’s having some long-standing national brands. The AFFI report found that 20% of consumers usually purchase private label frozen food products, while 16% said that they prefer national brands. Nearly four in 10 said that brand preference varies by item, and 26% had no brand preference.
While the overall lack of consumer brand loyalty would seem to allow retailers to expand their frozen selections of private label products, the continued desire of consumers to seek out products that fit their needs is beneficial to overall sales of frozen products.
“I think this is a case where private brands and national brands can win together,” says Mary Emma Young, VP of communications at Arlington, Va.-based AFFI. “Consumers are looking to experiment and will be in the frozen food aisles experimenting and willing to try new products.”
While brand loyalty is limited across the board in frozen food, the product category continues to see an evolution in how consumers view what has long been a core category in the grocery world. Young notes that some shoppers are eating frozen food products daily, while others are engaging with the category a couple of times a week.
The alpha users of frozen foods are providing a blueprint for growth, according to Young, as shoppers in this group are turning to frozen food as solutions for planned occasions, while others are recognizing the choices they now have to support daily meal needs.
“I think many folks looked at frozen food as offering the benefit of an easy meal solution,” she observes. “But it’s also these core consumers who are recognizing and planning meals around frozen, frozen ingredients and frozen meals, which I think is an interesting buying habit that we’re seeing.”
Bill Bradshaw, VP of sales at Arlington Heights, Ill.-based Federated Foods, is seeing private label growth in frozen foods across a host of product segments. Frozen meat, poultry, seafood, frozen breakfast selections, and dinners/entrées are all showing strong performance, with each outpacing national brands.
Additionally, he notes that private label products in frozen plain vegetables, potatoes, onions and frozen bread dough are each performing well.
“Consumers continue to look for ways to stretch their household budgets due to higher food prices,” he says. “One way this can be accomplished is with meals prepared at home. The strong performances of the categories mentioned above are evidence that consumers are turning to private label options to prepare satisfying home-cooked meals while saving money.”
Convenience Meets Value
According to Chelsey Capps, director of thought leadership at Stamford, Conn.-based Daymon, continued innovation within the frozen food segment is having a significant impact on how consumers view a category that has long been best known for its assortment of vegetables, pizza and French fries.
More recently, some retailers have used the increased focus on frozen food to add premium product assortments. Notably, Grand Rapids, Mich.-based SpartanNash recently launched its Finest Reserve private label offering, which includes, among other products, a line of upscale frozen pizza made in Italy.
Additionally, Boise, Idaho-based Albertsons Cos. earlier this year launched its Signature SELECT Mix & Match assortment. Shoppers can choose from a selection of frozen entrées, sides and veggies and cook them together in a standard oven at 375 degrees Fahrenheit for about 35 minutes. Product prices range from $7.99 (veggies) to $12.99 (entrees).
With this type of innovation, there has also been an evolution in the conversation about price. While consumers remain cognizant about the price of items and some are turning to private label products to save money, more shoppers today are factoring in the overall value of each product into their purchase decisions.
“There is a mindset among consumers on the product’s overall value, simply because they last longer in the freezer than similar products that can spoil in your refrigerator or on the counter,” says Capps. “We’re seeing more consumers turn to frozen products as a solution to save money.”
There’s also a growing confluence of the convenience frozen food offers with the high perceived value that products in the category offer. Capps notes that retailers need to maintain a product assortment that provides solutions for those in one-person households to larger families that need larger pack sizes.
Expanding assortments of frozen food are offering families new meal solutions.
“I think across the board, we’re seeing a variety of things happening by way of pack size simply because of inflation,” observes Capps. “It’s really important for retailers to create custom strategies for their private-brand programs. For some, it would behoove them to go after some of these larger pack sizes. This could prevent a larger family going from one store to another store, simply because one store doesn’t have larger-sized items that offer a greater value.”
A component of the value proposition is reducing food waste, a topic of conversation that has gained momentum because of higher prices and the positive impact that reducing food waste has on the issue of sustainability. AFFI’s Young notes that more consumers today have linked the two issues together and have realized the amount of money that can be saved when purchasing frozen products.
“It allows consumers to stretch their dollar further,” she says. “They are spending less money on food that might otherwise get thrown out.”
“Reducing food waste is top of mind with today’s consumers,” added Federated Foods’ Bradshaw. “Frozen foods help curtail food waste by offering extended shelf life versus perishable alternatives. Another advantage with frozen foods is that they allow you to use only the amount needed per meal occasion.”
Unique Opportunity
As retailers look to boost sales of frozen food, Capps believes that private label provides a unique opportunity not only to enhance the flavor profile of assortments, but also to give shoppers unique product assortments such as the aforementioned products now offered by SpartanNash and Albertsons through their respective store brands.
“Upwards of 98% of national-brand assortments overlap across retailers,” she says. “Private brands are arguably the strongest strategic lever that retailers can put to drive competitive differentiation and shopper loyalty, and better meet complex consumer needs.”
She points to a recent Daymon survey, in which 92% of consumer respondents said that they trust private-brand products as much as or more than national brands, as an indicator of the opportunity that retailers have to expand their store-brand assortments.
According to Capps, retailers “have permission to innovate beyond their wildest dreams and come up with products that are unique and offer stand-alone opportunities that drive exclusive loyalty.”
