The Global Frozen Foods Industry

Frozen food is the term given to products that can be stored in low temperatures over a long period of time. Some of the more popular frozen food products include ready-to-eat meals, fruits & veggies, meat & poultry, and soups. The frozen foods industry is one that has grown as a result of Covid-19, with people having to store food at home. Factors like convenience and longer shelf life have made consumption of frozen attractive, especially for younger people who are busy in their lives.

A Glance at Frozen Foods – A revolutionary concept

Here are some cool facts about frozen food –

· No preservatives need to be added to frozen food to ensure that they can be consumed as bacteria cannot grow on food that is stored at a temperature less than 0°F

· Food does not lose any nutrients if frozen

· Once food is frozen, it can be stored indefinitely although its quality and taste may deteriorate over time

· The process of freezing was first applied to industrial food sales in the 1800s, when a Russian company froze some duck and geese and transported them to London

· In 1945, Maxson Food Systems, Inc. starting making 'Strato-plates', which were meals that were created specifically for consumption on airplanes. Each frozen meal included a meat, a vegetable, and a potato

What does the market for Frozen foods look like?

The size of the global frozen food market by revenue was US$291.8 billion in 2019, and is projected to reach US$404.8 billion by 2027, registering a CAGR of 4.2% from 2020 to 2027. In the U.S., ice cream is the largest frozen food category with US$6.7 billion followed by pizza at US$4.8 billion, seafood at $4.8 billion, novelties at US$4.6 billion and complete meals at US$4.5 billion.

The global frozen food market comprises both retail and business customers. Retail customers of frozen food include individuals and households, whereas business consumers include hotel chains, fast food outlets, caterers etc. Geographically, the largest market for frozen food is Europe followed by North America.

Are Consumers warming up to Frozen foods?

The Covid-19 pandemic caused frozen foods to sell like hot cakes as people remained in their homes as a consequence of lockdown. The growing market is a consequence the following factors:

· rising incomes

· longer shelf life of products

· better management and transportation of temperature-sensitive products in the supply chain

· increasing impulse buying and

· huge demand for frozen food products, due to the lack of time.

People are looking for easily accessible, nutritious foods with wholesome ingredients & vegan food and frozen foods is a perfect category for retailers to address those needs. Another driver of growth in this market has been the demand from millennials as they seek instant gratification and don’t have time to prepare full-fledged meals.

In fact, 55% of millennials say that convenience is one of the most important factors when deciding what foods to buy.

The largest companies in the industry, including:

· Unilever, Nestle SA

· General Mills, Nomad Foods Ltd

· Tyson Foods Inc., and

· ConAgra Brands Inc

have been capitalising on the growing demand for frozen products by launching innovative products which align with consumers’ demands for organic, plant-based and gluten-free food.

The Geographical Market Landscape

The two largest markets for frozen foods globally are Europe and the United States. In Europe, Germany was the most important frozen food market in Europe in 2015, with an estimated market share of 21 % and a market value of 8.8 billion euros, followed by the UK (20 %, 8.6 billion euros value) and France (13 %, 5.5 billion).

The Product and Brand Landscape

The most significant player in the frozen food segment is Nestlé USA, who manufactures products in almost every category. Today, the U.S. frozen pizza market is worth roughly US$ 5 billion, with the global market worth more than double that amount. According to data analytics firm IRI, in March 2020, Americans bought $275 million worth of frozen pizzas, which was a 92% increase over the same period a year earlier. Of late, retailers’ frozen aisles are carrying brands like DiGiorno (pizza), Stouffer’s (frozen dinner), or Nestlé Drumstick (frozen novelties).

Another interesting trend to observe is the increasing number of companies entering the frozen Indian meals space, some of them being Deep Indian Kitchen, IndianLife, Sukhis etc. Traditionally Indian meals are made with fresh ingredients like meat and spices, however as people get busier in their lives, they have started to demand heat and serve Indian meals.

A Mintel International Food Trends Survey recently reported that 60% of international food eaters are looking to expand their palates with spicy and savoury flavours. The Technomic Ethnic Food & Beverage Consumer Trend Report also shows that international flavours have led a 20% cumulative annual growth rate in new food & beverage launches from 2013-2017, mostly due to the 87% of millennial consumers eating the cuisine.

Non-Traditional Benefits

In addition to the traditional benefits like convenience and longer shelf life, frozen foods also offer the benefit of reducing waste. In the U.S., 40 percent of food goes to waste. This is extremely costly – The average American family wastes about US$1500 of food every year. The cost to produce that food is US$162 billion yearly, according to the U.S. Department of Agriculture. This cost is imposed upon both individuals and society as a whole, resulting in higher food prices up for everyone. However, this wastage doesn’t only cost us economically but also environmentally, because food waste is estimated to be responsible for about 8% of total global greenhouse gas emissions.

Frozen foods can be used as a solution to this issue. The production of frozen food minimizes waste. In the world of fresh food, purchasing too many ingredients or cooking too much food almost often leads to good food being tossed. About 40% of our wasted food comes from restaurants, which, on average, dispose of over 84% of their unused food. But if food is frozen, unused ingredients and meals can be frozen rather than thrown out.

Opportunities in the industry that we see going into the future

The rapid development of the Food Service Industry is a factor that will increase demand for frozen foods. For instance, the increase in use of frozen food products by large fast food joints like KFC, McDonald’s, Pizza Hut, Subway, and Frozen Potatoes acts as a key driver of the global frozen food market. Moreover, the utilization of these products by numerous end users such as full-service restaurants, hotels & resorts, and quick service restaurants is expected to drive the growth of this market. Additionally, improved storage facilities in small retail stores make it convenient to keep them for a long time. Shift of consumer demand towards convenient and long-lasting meal options also presents a significant opportunity.

Conclusion

The frozen foods industry seems geared up for tremendous growth especially in Europe and North America. With ready-to-eat foods like ice-cream and pizza leading the growth, frozen foods brands can seize this opportunity to grow these segments. This industry also benefits from the advantages that frozen foods have, in the form of convenience, longer shelf life and wide usage in the food industry. Even as lockdowns are eased and eating out resumes, we are likely to see continued rise in demand for frozen foods globally.