2.6 Growth of Frozen and Fresh Foods

Even prior to the COVID-19 pandemic, sales of frozen foods had been on the rise. According to the 2019 “Power of Frozen” report by the American Frozen Food Institute (AFFI) and the food industry association FMI, 2018 sales of frozen foods in the U.S. topped US$57 billion (€57.5 billion), up 2.6%.49

The AFFI/FMI report said that shoppers in urban and suburban areas – the fastest growing population centers – consume frozen food more often than other groups. And according to CB Insights, millennials spend 9% more on frozen foods per supermarket visit than households of other age-based demographics.50

In addition to the growth in frozen foods, U.S. retailers of all types are seeing upticks in refrigerated fresh foods, including everything from pre-made food offerings to meal kits. In 2017, L.E.K. Consulting projected that U.S. consumer spending on fresh prepared food would grow from US$34 billion (€29 billion) in 2016 to US$51 billion (€43 billion) in 2021. 51 This trend follows what has already been established in countries like the U.K., where consumers can grab premium wraps, ready-to-eat ethnic meals, salads and many other offerings.

The COVID-19 pandemic accelerated these trends, especially in March–April of 2020. According to the AFFI, during that period 7% of consumers who purchased frozen foods said they did not purchase frozen food items pre-pandemic or did so very infrequently. This could have a lasting impact on purchase habits. Indeed, in January 2022, frozen food sales in the U.S. were up 26% compared to January 2020, according to an article in Quartz.52 This is partly because of inflation, as consumers switch to less expensive frozen offerings.

The upsurge in frozen food sales has led to more equipment purchases, both by consumers and retailers, according to Anne-Marie Roerink, president of 210 Analytics, a market research company focused on the food industry, quoted by Quartz. Thirty percent of U.S. shoppers increased their freezer capacity during the pandemic, and a similar trend is taking place in the U.K. Meanwhile some supermarkets are adding an extra aisle with freezers and putting freezers in different parts of the store.

Opportunity for NatRefs

The rise in frozen and fresh food sales will translate into a greater need for refrigeration, particularly additional display cases in existing stores. This unlocks an opportunity for self-contained R290 plug-in cases and CO2 condensing units.