May/June 2022

Frozen food category remains strong as pandemic wanes
By Melanie Epp, contributing writer

It’s been over two years since COVID-19 reared its ugly head and much has changed since it did. The food category — from how it was produced, processed and purchased — faced, perhaps, the greatest shift. 

As the pandemic deepened, consumer preferences changed. For the frozen category, the change was good and, for the first time in years, it saw tremendous growth. In a post-pandemic environment, however, will the frozen category be able to continue that momentum? Experts say yes, and here’s why.

According to a study by Deloitte, frozen category sales soared in 2020, rising a record 23%, some 200% above fresh. The following year saw similar growth. According to the National Frozen & Refrigerated Foods Association (NFRA), sales in the frozen category were up 21% in 2021. The association attributes that growth to manufacturers’ innovation and their ability to quickly align their products with consumer dining habits and health trends.

In March of this year, NFRA shared the top three drivers of growth for the frozen category in time for Frozen Food Month. The association pointed to health, smaller portion sizes and exotic flavors as key drivers. 

Walking the frozen aisles, it’s obvious that these demands are being met. Retailers offer more vegan, plant-based, gluten-free and organic options than ever before. They continue to offer full-meal alternatives for those seeking smaller portion sizes or snacks, and they offer plenty of convenience products with an international twist for those consumers seeking more exotic flavors.

But that’s not all that’s driving growth. According to Alison Bodor, president and CEO of the American Frozen Food Institute (AFFI), the top three purchase drivers for frozen foods are ease of preparation, quick and easy total meal solutions, and time savings.

“Core frozen food consumers also stress taste and quality,” she said. “The longer shelf life of frozen foods also drove purchases as consumers were looking for ways to reduce their trips to the grocery store.”

Overall, frozen food sales reached $66.4 billion in 2021, maintaining the record levels first achieved in 2020 when food shopping was drastically disrupted. Growth continues, especially among millennial shoppers, which Bodor said is an important target market across all frozen categories.

“Older millennials are the largest segment of core frozen food shoppers, meaning they enjoy frozen food daily or every few days,” said Bodor. “More frequent consumers of frozen foods plan their use of frozen meals rather than using them only as backup options. More frequent consumers are also more likely to enjoy frozen not only as an entrée, but also as a side dish or a complement to a main dish.

“This is another indicator of the appreciation for frozen’s role in making mealtime easier.”

AFFI’s recently conducted and extensive retail market research, “Power of Frozen,” showed that most core frozen food shoppers (72%) mix fresh and frozen when preparing meals. Bodor said this trend means that core buyers understand that fresh and frozen are equal and valuable options, and that the combinations lead to easier meal preparation.

“As shoppers continue the purchase of frozen food post-pandemic and integrate frozen into their meals, they are still drawn to the variety and appeal of easy-to-prepare food while eating at home,” Bodor said.

February 2022 retail sales from analytics firm IRI showed that the Prepared Vegetables category continues to see strong growth as shoppers turn to frozen, Bodor said. Like NFRA, she attributes some of this growth to consumers who are seeking out healthier options.

“Frozen food consumers are looking for ‘better-for-you’ foods and have many ways in which they define ‘healthy’ in frozen foods, ranging from product type to nutrients they look for or avoid,” said Bodor.

Consumers who focus on health are interested in “real” ingredients, she said, adding that they show a preference for fresh frozen and products that don’t have artificial colors.

Another factor driving growth is continued advancement of e-commerce food shopping. Bodor said that while many consumers have returned to grocery stores to shop in person, frozen food shoppers still enjoy grocery shopping online. Frozen foods have very high online conversion, she said, adding that 82% of shoppers who bought groceries online included frozen foods in their online baskets as well. Bodor expects this trend to continue, especially as manufacturers explore more direct-to-consumer options to meet demands.

Currently, there’s another factor driving growth in the frozen category: inflation. As food prices increase, the frozen category is expected to follow suit. But as food prices rise, Bodor expects the food service sector to be hardest hit. Consumers, she said, will likely return to making food at home to cut costs. Here, again, is an opportunity for growth.

“We can expect consumers to turn to frozen foods and eating at home to moderate costs, yet still enjoy variety and those foods that most consumers don’t typically prepare for themselves, such as enchiladas, lasagnas and Asian dumplings,” she concluded.

Bodor’s predictions are in line with those of NFRA, which also pointed to exotic flavors and international cuisine as key drivers for the frozen category.

A recent Deloitte study revealed one last driver of growth from today’s frozen food consumer. While many have turned to the frozen category for creative, convenient, single-serving options, others are drawn to the longer shelf life of frozen food products, especially as a means to reduce food waste.

Specifically, the study noted that 57% of shoppers are purchasing more frozen food, 58% are purchasing different kinds of frozen foods, and 57% are purchasing different brands than they did pre-pandemic. But perhaps the most important take-home message is that like the studies conducted by NFRA, ARI and AFFI, Deloitte’s study reveals that growth in the frozen category is here to stay.

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