Cool New Products Energize Frozen Food Category
By Dale Buss
Brands big and small have been revitalizing the freezer case over the last couple of years. There is improved quality up and down the aisle with new products such as plant-based burgers and riced cauliflower along with reasonable prices and the convenience of frozen food. CPG players have introduced on-trend new varieties, flavorful and even exotic ingredients, and helpful packaging innovations. Supermarket chains have latched onto frozen food as an e-commerce beater and an area ripe for private-label expansion.
And American consumers have responded: Long regarded as an unfortunate relic of the processed-food era, sales of frozen foods have been making a big comeback. In what has become a $54-billion market, U.S. sales from the freezer case advanced by 2.1 percent for the year ended in November, according to Nielsen data, while unit sales were also up, by 1.2 percent. Those results followed a decline of 1 percent for the comparable 52-week period that ended in 2016 and a decline of 1.4 percent in 2017.
What’s more, these sales have increased across frozen categories. Frozen-pizza receipts, for instance rose by 4.8 percent for that period per Nielsen, novelties by 3.9 percent, seafood by 3.2 percent, and prepared foods by 3 percent. Frozen-vegetable sales rose by a whopping 4.9 percent as imports of such goods to the U.S. grew by 7 percent year-over-year through October, while frozen-fruit imports surged by 16 percent.
“The category is promising,” Sergio Eleuterio, general manager of Kraft Heinz’s Springboard Brands unit, which includes its legacy Boca meatless-burger line as well as the new Devour brand aimed at men, he told CPGmatters. “There are lots of launches and lots of novelty. Many years ago, it was just old TV dinners and mystery meats sitting in the case. Now there are a lot of new flavors and colors and new brands, and products can deliver. So, the frozen market now can advance.”
The most important driver of renewal in the freezer case has been demand for frozen foods by millennial shoppers, who of course have become the predominant consumer generation in America.
Also, while frozen-food sales are rising across the board, a few explosively growing categories have been drawing American consumers to the freezer aisle like a magnet. The most prominent include new “healthy” ice creams such as Halo Top and Arctic Ice. Both have succeeded in making the case that they can offer tasty and satisfying dietary indulgence, reasonable levels of calories, and bonus nutritional value through their protein and calcium content – and that eating even a whole pint at a sitting isn’t such a sin.
Plant-based foods overall are also commandeering more space in the freezer aisle, such as new Sweet Earth Foods artisan pizzas, made by a plant-based frozen-food startup that recently was acquired by Nestle and got help from its new owner in developing the popular new product line.
“Nestle has great expertise at crusts and line efficiencies, so we developed four distinctive crusts that reflect modern food sensibilities,” said Bob Swette, president of Moss Landing, Calif.-based Sweet Earth. The lineup includes Truffle Lover’s, with a psyllium-fiber crust and a topping finished with a caramelized onion truffle sauce, and Protein Lover’s, whose crust is comprised of wheat, chia, quinoa and flax seed.
Another big factor, as hinted at by Swette: Across segments, the freezer case finally is catching up with the rest of the store in terms of product innovation, nutrition and quality. Three of Nielsen’s 25 top food-product breakout innovations for 2018 were frozen lines: Green Giant riced vegetables, Stouffer’s Fit Kitchen bowls, and Halo Top ice cream.
As in the rest of the food and beverage business for the last quarter-century, new companies began driving the change in frozen foods. Kidfresh has been one, a New York City-based startup that offers a variety of staple frozen snacks and other products aimed at kids’ tastes but including “hidden vegetables” that please parents.
“Frozen has been the last food category to evolve toward better-for-you ingredients, and be clean and organic,” Matt Cohen, Kidfresh founder and CEO, told CPGmatters.
Meanwhile, existing mid-size players have been improving their offerings, such as Amy’s and Ian’s, which were early pioneers in better-for-frozen; ethnic brands such as Indian-inspired Tandoori Chef; and traditional better-for-you lines such as Dr Praeger’s.
Just as important has been renewed attention to frozen by traditional major players that lately have invested heavily in overhauling their brands and products and introducing new ones. The frozen category is affording them the kind of growth that has been difficult to find in other parts of the supermarket since the Great Recession.
Kellogg, for instance, has a big frozen portfolio in addition to its Kellogg cereals and Keebler snacks. Recently it began focusing on its Eggo frozen waffles and MorningStar Farms soy-based meat analogs. Based on new consumer research, Eggo revamped its Thick & Fluffy Waffles, for instance, and MorningStar introduced Meat Lover’s Vegan Burgers and Veggie Burgers.
But there’s more than new SKUs. Kellogg’s research also motivated the company to begin eliminating artificial ingredients from Eggos and renovating its MorningStar Farms products last year to be 100-percent non-GMO, removing artificial stuff and simplifying ingredient lists overall.
“We’re giving shoppers more options that meet lifestyle needs,” said Dick Podiak, vice president of frozen foods marketing and innovation for Kellogg. The MorningStar Farms makeover, for example, “will be complete across the full portfolio by 2020. We’re also innovating to deliver vegan options: 65 percent of our portfolio will be vegan by 2020.”
Kraft Heinz introduced Devour in 2016 as its first “edgy” brand and how has a line of about two dozen SKUs aimed at hungry men that range from Sharp Cheddar Mac & Cheese with Bacon to Bacon-Topped Turkey with Garlic Sauce, from Italian Sausage Lasagna to Buffalo Chicken Grilled Cheese sandwiches.
“It’s really about bringing mouth-watering meals in categories not traditionally associated with frozen meals,” Katy Marshall, Devour’s brand manager, told CPGmatters. “We felt there was a chance to bring more interesting products to a group of consumers who were purchasing the category, but were looking for foods and flavors they love.”
Another boost to frozen’s prospects these days have been innovations and improvements in merchandising, presentation and packaging technology. For example, Devour sandwiches come out of the box “open-faced so you can see what’s inside the sandwich: the quality meats, cheese, sauce and onions that bring out the flavor,” Marshall said.
Is the frozen-food boom sustainable for more than a year or two?
“I’m anticipating this trend is going to stay for a bit,” said Bob Allen, principal and food and beverage leader for Grant Thornton management consultants. “As long as better foods are being purchased, and food companies continue to be creative – or go buy companies that are being creative in the frozen space – I don’t see anything getting in the way.”