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3 consumer trends that explain the rise of frozen food – and what to do about it

3 consumer trends that explain the rise of frozen food – and what to do about it

The frozen food aisle is a rare bright spot within the struggling packaged food industry. Successfully leading the trend is Conagra Brands, which owns many frozen food brands like Healthy Choice, Marie Callender’s, and Banquet, and have recently doubled-down with their announcement to purchase Pinnacle Foods. Even with the company’s recent earnings announcement with lower-than-expected results in frozen food, the segment is still driving growth.

Growth in frozen food isn’t happening by accident – the consumer is telling us something and we need to listen to capture both immediate and future opportunities in this space. What are they telling us? Why is frozen food winning – and what can make it even better?

Health

It’s no secret that consumers have been moving away from processed foods toward fresh offerings. In the last two years, sales growth of healthy food has outpaced that of semi-healthy and indulgent food. More than half of consumers are changing their diet and eating more natural and fresh food, while 37% are eating fewer processed foods. “All natural” is rated as one of the most important attributes when making purchasing decisions for which many consumers are willing to pay more.

How does that relate to frozen food? The age-old question has always been “fresh or frozen?” but consumers now better understand that freezing food is an effective way to retain its nutritional value. The general market consensus is that frozen foods offer the same kind of health benefits that fresh food does. This gives the frozen food aisle a healthy sales boost.

What can you do? Lean in by addressing multiple trends. With the built-in advantage of nutrient retention, frozen food can do double duty by catering to the appetite for variety and additional health benefits. Why not introduce varieties or partner with recipe sites that reflect the broad array of ethnic cuisines – from traditional dishes to street foods – that consumers are experimenting within recipes and at restaurants? And how about paleo and plant-forward diets? Frozen foods can and should be on the leading edge of these trends.

Convenience

In nearly every aspect, the consumer world has become on-demand. Many innovations such as the iPhone, Netflix, Facebook, Amazon and others have trained consumers to expect convenience and minimal effort in their everyday life. This new context and the fast-paced environment consumers live in have put significant pressure on the food industry to listen and evolve.

Convenience has become a key pillar in everyday consumer food choices. On-the-go foods and meal prep services have changed the food landscape. Instant pots that fast-track cooking are best sellers. The market is coming back around to the original benefit that frozen food provided as a fast, convenient alternative to fresh-from-scratch with sales growth as the proof. The relative ease of frozen offerings in our busy culture has driven their popularity for all types of food, whether it be meats, vegetables, desserts, or fully-prepared meals.

What can you do?  Show how frozen food fits a busy lifestyle as an effective option for healthy meal creation without the concern for spoilage. If you find yourself throwing out meal kits that you don’t have time for, then frozen is the perfect alternative. Frozen meals can be the hero either by serving as an easy replacement for specific recipe ingredients or by replacing meals altogether. Your frozen offering can – and does – make life a whole lot easier. Make sure consumers know it.

Millennial dominance

Millennials have been identified as the largest ever generation in America, with buying power currently sitting at $600 billion per year. Industries of all kind have picked up on this and want to make sure they are getting a portion of that $600 billion by appealing to the powerful demographic.

43% of Millennials have said that they are shopping frozen foods more frequently. To keep buyers coming back, frozen food brands are in a good position to capitalize on the relevant needs and wants of this segment. Frozen meals can be quick, easy and healthy relative to alternatives – all things Millennials are known to value.

If you traditionally compete in center store, chances are Millennials either don’t know about your brand or don’t think it’s for them. What’s stopping you from developing a frozen offer for your venerable brand? Zatarain’s, for example, has adapted the brand by introducing a successful line of frozen varieties that are faster and easier to prepare, providing an entry point for busy consumers who may have otherwise passed them by. Perfect for Millennials.

And what about grocery retailers? Grocery retailers are wise to focus on frozen offerings as they are comparatively difficult for online retailers like Amazon to fulfill. Frozen should play a key role in your marketing to continue to drive traffic to your physical locations.

The growth of frozen is not random and it is not an accident. Trends in human consumption, behavior and desires have illuminated the strength of the category. Continued diligence in understanding where the consumer is headed, by using human dynamics as a lead to business dynamics, and acting accordingly is key. Those who are adapting and linking relevant consumer benefits to their offerings can start to thaw stagnant sales and achieve outsized gains in this attractive and growing category.

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