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The Frozen explosion
Aisles PRODUCTS || STORE OPS || CUSTOMERS || TRENDS
FROZEN FOODS
Frozen fare is hot stuff thanks to category innovation, convenience and affordability
By Jessica Huras
Consumers are feeling anything but icy about frozen foods, with market research company IRI reporting sales grew 9.9% year-over-year in 2021. Frozen food innovation is also on the rise as shoppers seek products offering higher-quality ingredients and better-for-you benefits without compromising on the easy preparation and budget-friendly prices the category has long been known for.
According to Ransom Hawley, CEO of market research company Caddle, the consumer stockpiling that dramatically drove up frozen food sales in 2020, during the height of the pandemic, continued to fuel growth in the category in 2021. “What we’re seeing is that people are still maintaining a safety stock of items and continuing to cook things that they learned to cook throughout the pandemic,” he explains.
A 2021 report from Caddle shows younger consumers are the driving force
behind the surge in frozen food sales. Millennials and gen-Zers reported they increased their frozen food purchases by 33% in 2020, compared to 26% of the general Canadian population.
“Canadians are in the freezer aisles for a lot of reasons, but the main reason is convenience. [Frozen foods] are quick and easy,” says Hawley. He predicts that the affordability of frozen food is likely to become a higher priority for shoppers in the coming year. “Consumers are really worried about their money. They’re worried about inflation outpacing their income,” says Hawley. “People are going to be looking for simple, easy, cost-effective [meal] options.”
Evangeline MacIntyre, grocery manager at Country Grocer, believes cost is behind the boost in frozen food sales she’s noted at her store in Royal Oak, B.C. “[Sales of] frozen vegetables and frozen fruit have essentially doubled,” she says. “I’m going to assume it’s because fresh fruit and vegetables have recently gone way up in price.” MacIntyre’s observation is supported by a 2021 report from IRI, which suggests low-income households are among the primary demographics fuelling frozen food sales.
Caddle’s report indicates vegetables, fruit, and pizza are leading the frozen category. Sally Lyons Wyatt, executive and practice leader, client insights at IRI, notes that effective brand messaging in recent years on the benefits of flash-freezing fruits and vegetables has helped persuade many consumers to switch from fresh to frozen.
“There’s been a lot more communication. You’ve seen some vegetable companies talk about [their product] ‘as good as fresh’ because it’s flash-frozen,” says Lyons Wyatt. “It’s working, for the most part. We’ve really seen the adoption by more consumers of frozen over the past couple of years and a lot of that is because they do see it as an option that can be as good as fresh.”
She adds that the longer shelf life of frozen fruits and veggies compared to their fresh counterparts can help consumers minimize food waste, which is another attractive selling point for many shoppers.
Indeed, while convenience and affordability have long been at the heart of frozen foods’ appeal, shoppers are now looking to the category to offer meals that are also good for their own health and good for the health of our environment, too.
Michelle Bienvenue, vice-president of sales for Evive Nutrition, says the brand’s natural, non-GMO smoothie cubes are helping to change negative consumer perceptions around frozen foods. “In the past, frozen food has had a somewhat unpleasant veil around it but now that has changed,” she says.
Evive capitalizes on the concept of flash-freezing, claiming the organic fruits and vegetables used in the brand’s frozen smoothies are picked at the optimal time to preserve their nutrients. “Our customers love our zero food waste options and use of organic, local ingredients as well,” adds Bienvenue.
Consumer demand for better-for-you frozen options was essential to the growth in sales of frozen seafood, which outperformed the general frozen department by 2X according to IRI’s report. The report found a substantial increase in social media mentions of seafood during the pandemic, with trending posts centering around themes of healthier eating and natural ingredients.
Ashley Chapman, vice-president of Chapman’s, says the ice cream brand has also noticed growing consumer interest in better-for-you frozen products. Chapman explains there’s been a spike in sales of its “no sugar added” ice cream SKUs over the past two years. “That was our main decision criteria for releasing so many new NSA (no sugar added) flavours this year,” he explains. NSA ice cream bars and a NSA coffee and chocolate ice cream are among the brand’s most recent product rollouts.
Additionally, Chapman’s is set to release two new frozen yogurts, a lower-fat alternative to its traditional ice cream that caters to health-conscious consumers. Chapman says shoppers with special dietary preferences and restrictions have been a priority in recent years, with the brand also offering a line of lactose-free, gluten-free sorbets.
IRI’s Lyons Wyatt says plant-based products are another major trend in the frozen aisle. “We’ve seen the infiltration of plant-based into the dairy options, such as ice cream and sherberts. You’ve seen plantbased go into the frozen meat area and the frozen meal area. Plant-based has been huge,” she says. By contrast, IRI’s report suggests that traditional meat and poultry had a relatively small category share performance within frozen for 2021.
Country Grocer’s MacIntyre reports that sales of frozen plant-based meat alternatives are picking up steam in her store. Meanwhile, Michael Gray, director of product development and quality assurance at M&M Food Market, says plant-based products are a focus of the chain’s upcoming product launches. “We’re getting big into plant based,” says Gray, adding that alternative protein meatballs, ‘fishless’ tenders, and burgers are among the plant-based products M&M is set to roll out this year.
Frozen plant-based options are also in the spotlight at General Assembly Pizza, a company that began its life as a restaurant in Toronto and now also offers its pizzas in grocery. According to CEO Ali Khan Lalani: “We’re really putting our emphasis on developing a broader plant-based and flexitarian pizza line. We have a brand new plant-based pepperoni pizza that’s coming to market in the near term,” he says. In addition, General Assembly is updating its current plantbased Margherita pizza.
Like Evive Nutrition’s Bienvenue, Lalani sees General Assembly as representing the new wave of frozen food brands that are redefining the category in the minds of consumers. “The premise to create the product was a personal desire to create a better
frozen pizza...one that was a significant leap forward in terms of quality at the shelf,” says Lalani.
General Assembly’s frozen pizzas are made with naturally-leavened dough, grass-fed mozzarella and meats that are free of nitrates and sulphates. “We source restaurant-grade, high-quality ingredients,” says Lalani. “Customers are really excited about quality, and associating quality and premium to the frozen food aisle.”
Caddle’s Hawley says this kind of product premiumization is another emerging trend in the category. “There’s a push to modernize a lot of the frozen foods brands in terms of meal occasions and the stigma around these brands as being very unhealthy,” he says.
According to M&M Food Market’s Gray, the chain has revamped its image over the past several years and looked to attract younger consumers by highlighting its restaurant-quality products. “M&M used to be known as the store that your parents shop at,” he says. “We’ve reimagined and we’ve changed our product portfolio to bring new and innovative items in that appeal to millennials.”
IRI’s Lyons Wyatt says that many frozen food brands are modernizing by expanding their suggested preparation methods beyond the standard microwave. They’re instead catering to the new types of cooking tools that are trending with consumers, such as air fryers. “Calling out different cooking appliances and having cooking instructions across a variety of cooking methods is also going to help from an innovation and adoption standpoint,” she says.
Hawley points out, however, that premiumization is a delicate balance for frozen food brands to strike while still retaining their core selling points for shoppers. “It’s an interesting play because you can’t go too premium,” he says, noting that premium products mean premium prices in a traditionally low-cost category.
Although General Assembly’s pizzas are priced higher than typical frozen pizzas, Lalani views their products as offering savings for consumers when compared to restaurant takeout. “If you want to order dinner for four, it’s hard to get it on your table for less than $75,” he says. “I think that’s the rationale behind why the quality frozen segment as a whole is starting to see year-over-year increases.”
Lalani encourages retailers to embrace premium pricing to best capitalize on the sales of frozen products. “If the average frozen pizza in a grocery store is $8 or $9 and our product is $12…the incremental margin that we are providing to your store just went up,” he says as an example.
In spite of the rise in online shopping during the pandemic, IRI’s report indicates that frozen products continue to be sold primarily in brick-and-mortar stores. Lyons Wyatt believes this represents a potential area of opportunity for retailers. “When they [consumers] do [online] searches, make sure that the search algorithm brings up frozen items in addition to the other items that might be in the store with those same types of attributes,” she says.
Lyons Wyatt also advises grocers to showcase the convenience of frozen food in their marketing efforts. “There’s a lot of cooking fatigue, so where frozen has a great benefit is that ability to provide a menu,” she says. “Maybe there’s a way to connect with the sister departments in the store and put a whole menu together that includes frozen as well as some fresh and some refrigerated items. Provide [consumers with] an affordable meal plan.”
Caddle’s Hawley predicts more consumers will be turning to print and digital flyers in search of grocery deals in the coming months. He suggests retailers appeal to budget-conscious shoppers in their promotional materials by highlighting frozen products as economical meal solutions.
With better-for-you frozen products already resonating with consumers, Lyons Wyatt also suggests retailers keep an eye out for new, “functional” frozen products, which she thinks could be the next big trend in the segment. “There’s room for more innovation and for additional functional benefits like immunity, cognitive health or metabolism. We see that in other categories,” she says.
Despite its humble reputation for providing quick, low-cost meal options, frozen is emerging as a versatile category that can cater to diverse consumer needs, ranging from plant-based alternatives to elevated ingredients and flavours. “It warms my heart to see grocery stores take out some of those classic incumbent frozen brands that have a 40-plus ingredient list and replace them with premium products,” says General Assembly’s Lalani. “We’re starting to see innovation like we’ve never seen before. And we’re starting to see types of foods in the freezer aisle that we’ve never seen before.”
A new wave of premium brands like General Assembly Pizza are redefining frozen foods
