FMI: Frozen food shoppers are hunting for deals

Frozen food sales are up more than $10 billion over the last three years, but that is all thanks to inflation. Actual unit sales are down nearly 5% from a year ago, according to data cited in a study of the category, released Tuesday by FMI – The Food Industry Association.

As of August, frozen food unit sales have fallen for 25 consecutive months—though frozen food saw some of the biggest growth early in the pandemic, FMI said.

“In light of the increased cost of food, four in 10 shoppers make changes to the types, amounts, channels or brands of frozen food they buy,” the report said. “Sales promotions are more powerful in driving sales than two years ago.”

Frozen food sales totaled $74.2 billion in the last year, FMI said, noting that frozen food prices are up 13.5% versus a year ago (compared to total store prices, which are up 12.1%).

Shoppers are increasingly comparing frozen food promotions across different stores before shopping (58%), checking frozen food promotions at their go-to stores pre-trip (70%) and comparing prices and sales in-store across brands before putting anything in the cart (76%).

What’s more, more consumers said promotions can spur them to try something new, visit a different store or buy a different type of frozen food than they did in 2018, the report found.

“In the past 52 weeks, sales promotions have made a comeback in number, but the depth of promotions is still lacking—resulting in lower incrementality than seen pre-pandemic,” FMA said. “Careful investment in price may be a way to improve promotional lifts and incrementality.”

Twenty percent of frozen food shoppers said they typically buy store brands and half of consumers said they do not believe there is a difference between national brands and private label in terms of quality, taste or nutrition.

To boost sales, frozen cases could take a merchandising page from other departments, FMI said.

“Fresh categories such as produce, meat and deli are increasingly crossing department lines and presenting shoppers with solutions rather than silos,” FMI said.

Two-thirds of shoppers said they were somewhat or very interested in a frozen foods section that groups together all items for one meal occasion, such as frozen pancakes paired with breakfast sausage, smoothie mix, fruit, whipped cream and pastries.

About half (47%) of shoppers said they’d be interested in secondary frozen cases throughout the supermarket, such as ice cream next to fresh berries in the produce department.

And half of shoppers said they would be interested in a section of health-focused, dietitian-recommended foods in the frozen aisles, the report found.

“While year-on-year household penetration and units per trip are virtually flat, shoppers are purchasing frozen foods less often,” FMI noted. “This is the primary driver of the unit and pound declines experienced in the past two years. Consider ways to drive trip optimization, including frozen cross-merchandising, cross-promotions, co-locations and secondary freezer locations that all draw substantial interest among core and medium consumers.”