First-rate frozen selection

Sales of better-for-you frozen foods are on the rise, yet there is still untapped opportunity in the freezer section.

Frozen food has always played an important role in the diet of the on-the-go consumer. These days that on-the-go label can be attributed to most. For the busy consumer, not much can be more convenient than a frozen meal or snack that is ready to serve after just a couple of minutes in the microwave.

However, as more shoppers educate themselves on the effect that nutrition and diet has on overall health and wellbeing, the sector has seen a noticeable transformation from simply offering “convenient” to “better-for-you convenient.”

Industry observers say that just as the consumer has evolved and matured, so has the freezer section. While calorie-laden frozen pizzas and processed TV dinners can still be found stocked in the frozen aisle, high-quality frozen foods with health benefits are what many shoppers feel confident about both spending their money on, and feeding their families with. 

Thanks to the surge in innovation and quality that has taken place within the freezer, consumers today can actually feel good about enjoying a quick meal between countless obligations. “There’s been significant growth in the offerings of natural and health-oriented frozen foods, correlated with the shrinking of brands that don’t offer healthy products,” says Amy Lotker, owner and executive vice president of marketing and sales at Delray Beach, Fla.-based frozen natural pizza maker Better4U Foods. “We have also seen, and been part of, the growing trend in frozen foods that cater to the needs of people with food allergies and intolerances–such as increased offerings of gluten-free and dairy-free products.”

According to Chicago-based research firm IRI, supermarket sales statistics support Lotker’s observations. In the 52 weeks ended October 5, processed frozen chicken has seen a 44% decrease in dollar sales. Frozen juices from concentrate, a term that is frequently associated in the mind of consumers with being processed and unhealthy, have taken an 18% hit in dollar sales. Frozen egg substitutes are down almost 50% in dollar sales.

“We’re certainly seeing a move to better-for-you type products and closer focus on whole-food, sustainable ingredients that consumers would find in their own kitchens,” says Scott Riddle, vice president of sales and marketing for Irvine, Calif.-based Artisan Bistro.

The move toward better-for-you has not adversely affected all areas of the frozen category. IRI reports that frozen segments that have experienced growth in the past year include seafood and fruit—two items generally perceived as being healthy.

Manufacturers are proving to consumers that frozen does not equate to highly processed or sodium-drenched. In fact, when it comes to many of the options available today it is actually quite the opposite. “Where we’ve seen growth is in smaller, truly natural brands like Saffron Road that bring attributes like quality, authenticity and humanely raised protein without antibiotics,” says Jack Acree, executive vice president of Stamford, Conn.-based American Halal Co. “This is where the traction seems to be, especially with young shoppers.”

The traits listed by Acree are what observers agree most Millennials are looking for when they shop. This typically health-conscious, socially aware consumer wants to eat food that boasts real nutritional value, and to stay away from things that are known to cause issues—like GMOs and other chemicals. This does not only apply to the fresh section; their requirements do not waver when purchasing frozen food.

This mindset does not only apply to Millennials, either. “I think the consumer today that walks into the grocery store is more concerned than ever before about what they’re eating,” says Marty Sands, founder and CEO of Greenwich, Conn.-based Paleo Passion Foods. “Shoppers not only want to know what they are eating, they want to feel empowered to make healthy choices based on the selection presented to them.”

Paleo Passion Foods’ first product, the recently debuted Paleo Passion Pops, can be found in the frozen section at Whole Foods and other natural, gourmet specialty retailers. Based on the concept of the paleo diet, these pops contain only natural sugars from fruit and vegetables, no food dye, have a short, recognizable ingredient list and are just 60-90 calories per serving. It is these types of healthy snacks that the sophisticated consumer today gravitates towards—one that acts as a quick yet nutritious way to both indulge a consumer’s sweet tooth and feed the body with superfoods, like the flax or chia infused in each pop.

Frozen firsts

Merchandisers that have taken the initiative to innovate within the frozen section have reaped the rewards. Being the first-to-market with a certain health trend or unique product benefit can lead to both a loyal consumer following as well as stronger profit margins for merchandisers and retailers alike, note observers.

Officials for American Halal Co. maker of Saffron Road Foods, say that the company was the first-to-market with a non-GMO verified frozen entrée. Now, they have four entrées that are non-GMO verified, an attribute that many consumers today specifically seek as a packaging call out.

Artisan Bistro is another brand helping to elevate the offerings in the frozen section, taking frozen breakfast options a step further than the typical wrap with the just-launched Beyond Breakfast frozen entrées. These gluten-free meals featuring free-range egg white patties and all-natural turkey come in five different unique varieties including Veggie Chorizo Huevos Rancheros and Mediterranean Breakfast Stack.

Aside from the breadth of new options and strengthening quality of product, one of the main drivers pushing better-for-you out of the freezer and into shoppers’ carts are the country’s growing healthcare issues. Consumers are looking toward supermarkets for the cure to whatever is ailing them, as well as in order to take preventative measures, say observers. “There’s a growing audience in our country to read the label and to understand what they’re eating,” adds Paleo Passion Foods’ Sands. “I think that’s because diabetes and obesity are epidemics, and cancer and heart disease are serious problems in our country.”

A combination of these health concerns and increased awareness surrounding the role that food plays in overall health have caused the demand for not only better-for-you, but gluten-free, free from and more to incrementally increase, observers note. This demand has quickly trickled to the frozen section because these types of convenient, healthy foods are available for the average consumer—and consumers with health issues, like celiac disease, do not want to feel like outcasts. They want to, and should feel like they have the same opportunities and choices when it comes to purchasing food as everyone else, observers add.

It is for this reason that the gluten-free frozen section continues to grow. Most recently, Lyndhurst, N.J.-based gluten-free food supplier Dr. Schar USA has begun to trickle out its latest release of gluten-free frozen entrées. Currently there are two frozen pizzas available, soon to be followed by two frozen pasta dishes, among other offerings coming in 2015. Dr. Schar officials say they offer up a clear point of differentiation that will surely excite many consumers: they are importing their entrées from Italy, a country widely considered an international hub for some of the world’s freshest and most palatable food.

“To serve all of our consumers needs, we need to be in the freezer,” says Roberto Cruz, Dr. Schar USA’s director of marketing. “All of this is being driven by the bigger trend of the need for convenience for the consumer. Ask 100 people if they’re working less hours and have less time or more time, 99% would say they have less time in their lives.”

As long as consumers continue to embrace a nutritious diet as one of the keys to overall health and wellbeing, and the pace of the day-to-day shows no signs of slowing down, the better-for-you frozen foods sector is poised for continued growth, observers note. Additionally, there is opportunity for grocery retailers to take control of this conversation.

According to U.K.-based Dunnhumby’s Healthy, Wealthy & Wise report, more than half of consumers believe that supermarkets and food retailers influence healthy lifestyle, and more importantly, that it is the responsibility of food manufacturers and retailers to support consumers in leading such a lifestyle.

Though the freezer does not have the same stigma it once did, there is still plenty of room for improvement. A recent study done by the Frozen Food Foundation and UC Davis found that frozen fruits and vegetables have equal, or in some cases greater, nutritional value than fresh. However most consumers are not yet convinced—or at least, they have not yet been exposed to this valuable information. Observers agree that a large opportunity exists for retailers and manufacturers to educate the public in regards to the healthfulness of frozen fruits and vegetables.

According to the IRI report, while frozen fruit experienced about a 14% increase in dollar sales, frozen vegetables remained relatively flat, with just a 2.3% increase. If manufacturers and retailers made a greater effort to educate shoppers on the value of frozen fruits and vegetables, which are often the more practical purchase choice than fresh, observers note that the profit margin on these items could really benefit.

“Retailers and brands partnering together in support of their mutual interest in building the category and exposing new consumers to their natural and organic products is just good business that has double-digit growth behind it,” says Artisan Bistro’s Riddle.