Consumers flocked to the frozen-food aisles during the peak of the pandemic, and some of that heightened demand appears to have staying power.
Dollar sales of many frozen items have continued to show growth over the last three years, including frozen meals, desserts, and frozen fruits and vegetables. Although price inflation is masking soft demand in certain subcategories, consumers have shown ongoing interest in the convenience, variety, and value they can find in the freezer case.
According to data from Circana compiled by research firm 210 Analytics, dollar sales of frozen foods were up 6.7% in the first quarter and 3.8% in the second. Frozen meals have been among the best performers, with sales up 7.4% and 3% in those periods, respectively.
Kiley White, manager at Ord Grocery Kart in Ord, Neb., said frozen foods have been performing well at his store, especially frozen meals and prepared entrees.
“Frozen has been really strong,” he said, noting that the store expanded its frozen meat section about a year ago. “We added a lot of fish, and we also added burritos and pre-made sandwiches, and a lot of breakfast meals, like Jimmy Dean breakfast sandwiches.”
Retailers such as Walmart are also responding to consumer demands for frozen meals. The retailer recently added the eight-item By Chef Ramsay line from celebrity chef Gordon Ramsay, reportedly offered exclusively at Walmart. It joins frozen meals from three other Food Network celebrity chefs — Guy Fieri, Andrew Zimmern, and Kardea Brown — all of which are also Walmart exclusives, according to a report on Yahoo! Life. A spokesperson for Walmart could not be reached for comment.
Other retailers making moves with frozen meals include Keasbey, N.J.-based Wakefern, the parent of ShopRite and other banners in the Northeast. Wakefern said it would roll out new private-label frozen meals next year after supplier Café Spice was selected as a winner of its recent Own Brands Supplier Diversity Summit. Café Spice makes fully cooked frozen meals that include chicken, vegetarian, plant-based, dairy-free, and gluten-free options.
In fact, gluten-free options overall have been among the strongest frozen food performers for some retailers.
“Gluten-free continues to grow in the freezer aisle,” said Scott Sullivan, center store buyer at East Greenwich, R.I.-based Dave’s Fresh Marketplace. “From breads and desserts to pizza, more families are looking for [gluten-free],” he said. “The convenience for consumers to be able to take a slice or two of bread from their freezer without having to worry about spoilage has really helped to boost frozen sales.”
White said sales of frozen gluten-free items have also been growing at his store, including frozen gluten-free donuts, pizzas, fish sticks, and chicken tenders.
Plant-based frozen foods, however, have not fared as well, Sullivan said.
“The plant-based boom during COVID proved to be short-lived,” he said. “The interest quickly leveled off, and category sales fell back to a more modest level.”
Dave’s Fresh Marketplace recognized this early on, Sullivan said, and adjusted its shelf space accordingly.
Frozen desserts are hot
Another frozen category that has seen strong sales growth is desserts, which saw sales climb 7.3% in the first quarter and 5.1% in the second quarter, according to a recent 210 Analytics report.
Sullivan said all styles of ice cream — including traditional scoop packages, premium pints, and novelties — have performed well at Dave’s Fresh Marketplace in the past year.
“With inflation impacting pricing at local scoop shops, you see why supermarket ice cream sales have been on the rise,” he said.
Frozen fruits and vegetables have also seen strong sales results, although inflation appears to be at least partly responsible.
Sullivan said frozen fruit has performed “extremely well” at Dave’s Fresh Marketplace, especially value packs in the two- to three-pound range.
“Consumers have realized the value and convenience of these packages,” he said.
Frozen fruits and vegetables saw the biggest dollar sales gains of any frozen category in July, at 13.8%, according to 210 Analytics, but also saw the highest price inflation at 19.1%. Unit volume was down 4.5%.
The snacking opportunity
Consumer interest in convenience is also helping drive consumer interest in frozen snacks, said Kelsey Olsen, consumer insights analyst at research firm Mintel, who recently authored a report on frozen snacks.
“The pandemic certainly reframed consumer shopping habits, and especially those in the frozen snacks aisle,” she said.
The report found that consumers consider familiar flavors and familiar brands as the two most important factors when shopping for frozen snacks, followed by the cooking method (baked vs. fried, for example). Despite their interest in familiarity, 31% of shoppers also said they look for new flavors when shopping for frozen snacks, and many also seek out better-for-you attributes.
“While 48% of consumers say they want healthier options, better-for-you purchase factors are relatively niche,” said Olsen.
According to the Mintel frozen snacks report, high protein content is high on consumers’ list of nutritional concerns when it comes to frozen snacks, cited by 30% of consumers. It was followed by low sodium (19%), organic (17%), gluten-free (11%), plant-based (9%), and other allergen-free (5%).
“Consumers don’t have strong opinions about frozen snacks, indicating that the current offerings are working for many,” said Olsen.
She predicted that inflation would continue to play a role in the dollar sales growth of frozen snacks in the near term, although she noted that unit sales have been flat or slightly down for some sub-categories, including frozen handheld snacks.