- A new study by sales and marketing agency Acosta finds that 26% of U.S. consumers are shopping the frozen foods department more frequently than they did a year ago. All generations reported buying more frozen food, but the increase was driven in large part by millennials, 43% of whom said they bought more frozen foods compared with last year.
- Convenience is an important consideration factor when buying frozen foods. Acosta’s data shows that 89% of millennials consider frozen foods a quick dinner solution. Among the other top ways millennials use frozen foods: convenient breakfasts for kids (81%), side dishes (78%) and convenient lunches (72%). Forty-one percent of consumers who plan to buy more frozen foods in the coming year cite convenience as their top driver.
- Health and nutrition are also factoring into frozen meal sales, the study found. Among the top attributes shoppers look for, no antibiotics and hormone free (both at 76%) led the way, followed by all natural (73%), sustainable (71%) and low sodium (69%). Acosta reported that 54% of millennials will only buy specific frozen foods because they believe them to be healthier, compared with 48% for both Gen X and boomers.
The Acosta study provides some evidence that innovations in the frozen food aisle are paying off. This is most welcome news for a category that has struggled with declining sales over the past several years as consumers migrate towards fresher options and restaurant fare.
According to Nielsen data cited in the Acosta report, frozen food sales have remained relatively flat, recording just 0.2% CAGR, during the past five-year period. Unit sales in frozen have declined 6.7% with several large categories — including prepared foods, desserts, vegetables and pizza — all experiencing unit declines.
While a variety of frozen food categories are struggling, promising earnings reports from companies like Nestle (Lean Cuisine), Pinnacle Foods (Birds Eye, Gardein), and B&G Foods (Green Giant) demonstrate the opportunity for a comeback within this segment. These brands have tapped innovations in ingredients, flavors and packaging with a focus on today's definition of health. They've then driven that focus home with marketing messages that distinguish the newer offerings as exciting, inventive and anything but your typical frozen meal.
Brands like Nestle's Lean Cuisine had particularly felt the drag in sales, reporting a 20% revenue drop in the two years leading up to June 2015. Lean Cuisine has since gone through a major brand overhaul to focus less on making "diet"-friendly foods and more on organic, high-protein, and gluten-free meals.
Pinnacle Foods has profited from its Birds Eye frozen segment. Last year, the brand introduced two new better-for-you platforms: Birds Eye Flavor Full, which pairs vegetables with bold flavors like buffalo and wasabi, and Birds Eye Protein Blends, which are side dishes that combine vegetables, legumes, and whole grains. The frozen plant-based meat alternatives brand Gardein, also included in the Birds Eye Frozen segment, has been a strong performer.
B&G Foods is challenging Birds Eye's dominance in frozen foods by rejuvenating the Green Giant brand, which it acquired from General Mills in 2015. Last year, the company introduced a new line of frozen vegetable products, with products such as Mashed Cauliflower, Riced Veggies, Roasted Veggies and Veggie Tots providing a modern take on traditional side dishes.
If Acosta’s study findings are any indication, these kinds of changes and new product introductions are a hit with millennials — an increasingly important generation for food brands not only because they’re entering their peaking earning years, but also because they have more mouths to feed as their families grow. This should continue to spell good news for frozen food manufacturers, especially those that remain focused on providing the healthy and convenient product solutions that consumers seek.