"There’s a realisation frozen food provides solution to many of issues concerning consumers"

"There’s a realisation frozen food provides solution to many of issues concerning consumers"

For years seen as the less glamorous alternative to fresh, frozen food has been making a quiet comeback across Europe. Olly Abotorabi, senior insights manager at IRI International, considers why demand for frozen is hotting up.

Sales of frozen food are growing in value across five out of six key European markets - the UK, Germany, Spain, the Netherlands and Italy.  

In the UK alone, the frozen food sector was worth EUR5.5bn in the year to February 2018, the second-largest European market behind Germany (which stood at a relatively hefty EUR10.1bn). But what are the drivers causing this revival? And why now?

Premiumisation is one of the main reasons frozen food is growing. Innovation means food quality and choice is getting better. Ice cream is the biggest category within frozen across most markets, making up around a fifth of all frozen sales across the countries studied (with the exception of Germany where its 14%). New product development occurs at both ends of the category; ranging from increasingly indulgent products and more exotic flavours  to free-from and organic launches, with small and mainstream players both contributing.

Innovation across other sectors such as frozen fish also underpin top-line sales improvement. Enhanced ranges of natural fish fillets coupled with the re-invention of classic breaded options and accompanying flavours has helped re-stimulate the segment. This evolution is typified by producers such as Young's Seafood in the UK and Findus in Italy.

Consumer perceptions are changing as studies show although fresh food is best at harvest, that freshness quickly depletes. Food quickly frozen after harvest is able to retain a lot of nutrients. Italy is one market where consumers are intent on ensuring freshness of produce but they are becoming more open to frozen; fish for example is growing in volume at 4.3%, well ahead of the sector as a whole at 1.2%.

Beyond higher value propositions, there is a realisation frozen food provides the solution to many of the issues currently concerning consumers.

As people are driven more by convenience, health, value for money and waste reduction they are increasingly finding the products now on offer are well placed to help meet these needs.

Take convenience as an example.  As family formats change, working days become longer and less uniform, finding the time for one family meal is increasingly complicated. Frozen food, with the convenience of pre-prepared ingredients, can provide simple, quick solutions. With prolonged use-by dates, frozen food is a flexible option which means when things change, meal plans can very easily be shuffled around without the concern of food going bad. This helps explain why meat and vegetable products are doing particularly well in terms of growth. Meat is in growth of between 6-8% in the UK, Germany and Spain.

Frozen food can also help people in their quest to be healthier. In The Netherlands for example, frozen potato products cooked in the oven are growing in popularity as a healthier alternative to more traditional deep-fat frying.  Aligned to the growth in consumption of homemade smoothies, supermarkets have been quick to create packets of frozen chopped fruit ready for blending, again ticking the box for convenience, health and comparable value for money.

With a growing consumer focus on waste and plastic packaging, prompting the recently-announced WRAP plastic pledge in the UK, frozen can provide an answer as food is used in just the quantities needed and the rest saved for another day.

While supermarkets in the UK have made concerted efforts to re-stimulate sector growth, discounters continue to compete strongly in this sector and dilute underlying grocery channel growth seen in the past few years.

Growth remains evident elsewhere however with sales by value in the year to February 2018 up in Spain by 2.3%, by 1.2% in Italy and by 2.4% Germany. Each of these markets have been in volume growth, too. 

Only France has seen a decline in sales (of 4.3%), which has driven by frozen savoury products, although sweet products perform better again due to the premiumisation of ice cream.

For manufacturers, there is more potential still to exploit in the frozen industry as they maintain the momentum of repositioning from a commodity product to one just as attractive as fresh. The sector is on-message for so many of the issues concerning consumers, from health and convenience to indulgence and value for money. There is also the potential to reduce the use of plastic packaging, which is arguably less important to food preservation for frozen products than it is for fresh. Food manufacturers need to focus on playing up these positive attributes and educating consumers.

Far from being past its best, the frozen food industry is proving it's very much here to stay.