Refrigerated and Frozen Food Blog


Viewpoint: Signs of life

May 14, 2009

Spring is a natural time to keep an eye on things . . . certain indicators, if you will. It might be signs of life from your lawn or garden. Or, like me, you might be looking for signs of life from your fantasy baseball team. Chances are, you’re also watching for any signs of an uptick in the economy.

Behind the scenes here, we’re preparing Refrigerated & Frozen Foods’ annual June “State of the Industry” feature. As you might suspect I’m thinking about this industry’s vital signs.

One of the chief indicators I consider is retail competition. Meaning, I believe that healthy retail competition (with no bloodbath price cuts behind the scenes) benefits everyone - particularly the consumer. For example, I’d say the frozen retail entrée category is growing because leader Nestlé Prepared Foods Co. (Stouffer’s, Stouffer’s Lean Cuisine) now has some robust competition - principally by way of interesting new product launches - from ConAgra Foods, Bellisio Foods Inc., H.J. Heinz, Unilever and others.

Of course I’m not the only one looking at this market.

With convenience topping its many attributes, frozen food rang up nearly $52 billion in U.S. retail sales through all channels in 2008, said Packaged Facts, New York. In an April 2009 release, the consumer market researcher noted that this figure represents a 6.5 percent increase from approximately $49 billion in sales during 2007.

“It’s no coincidence that some of the fastest-growing products in the frozen foods market benefit from having a convenience edge such as portability, being ready-to-eat or offering no-mess consumption and easy clean-up,” said Tatjana Meerman, Packaged Facts publisher. “Packaging formats cashing in on this angle include single-serve pouches, portionable packs and ‘servings for two.’”

 Packaged Facts projects that retail sales of frozen food and beverages (through all channels) will reach almost $65 billion in 2013, an increase of more than 25 percent or $13 billion over 2008 revenues.

While many markets struggle with the sluggish economy, others thrive. Market researcher Mintel, Chicago, said it has reviewed and re-forecasted its research reports from the past two years, identifying which food and drink markets are actually being improved by recessionary woes. Among the top five categories: frozen meals and prepared side dishes. The others: breads, sweet spreads and coffee.

“Over the past year, we’ve seen people trying to save money on food by either dining out less, cutting supermarket bills or both. More people cook at home now but they still want healthy, convenient, tasty food and drink for their dollar,” said Bill Patterson, a Mintel senior analyst. “As consumers spend less and stay in more, certain food markets are benefitting. These recession-proof - or rather recession-fueled - industries are destined to do well throughout the economic downturn, but it will be interesting to track their sales as the nation recovers.”

Here’s what Mintel said about frozen, “Convenient, available in family-sized servings, filling and often inexpensive, frozen meals will undoubtedly benefit from the recession. Mintel expects a total sales increase of 4.5 percent, a jump from its original -0.3 percent expectation.”
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