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June 10, 2020

Nomad Foods online sales surge as Covid-19 spurs “influx of new customers”

Nomad Foods has updated investors on the frozen food group's performance during the coronavirus crisis, including a spike in e-commerce sales.

By Dean Best

Nomad Foods, the European frozen-food business, has seen unprecedented online demand during the Covid-19 lockdowns as sales growth through the channel almost doubled in April.

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What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

In retail, an “influx of new customers” was attracted to the frozen-food category, where Nomad Foods markets a range of brands, including its recently-introduced plant-based Green Cuisine line, which is due to launch into more European markets by the end of the month.

Chief executive Stéfan Descheemaeker, addressing the Deutsche Bank Access Global Consumer conference today (10 June), held virtually because of the Covid-19-related restrictions, said the Birds Eye and Findus owner’s market share for e-commerce was now 40% higher than its share through the retail channel.

Nomad’s online sales grew 80% in April, compared to 43% in March, and 9% in January before the novel coronavirus really took hold in Europe. E-commerce sales for the business now account for 7% of the total versus 5% last year.

Descheemaeker said frozen food consumption is no longer restricted to evening meals, and its products are now being eaten throughout the day, with lunchtime meal occasions seeing the largest number of new entrants.

“Growth is being driven by new users through increases in household penetration,” the CEO said. “Frozen food is a planned purchase and a category that is added earlier to consumers’ shopping carts online versus in-store.”

Nomad’s organic revenue growth for the business across all channels is also set to double in the second quarter from the 7.7% posted in the first three months of its fiscal year, compared to 1.7% in the final quarter of 2019.

So far in the quarter, sales are up 14.1% and Nomad expects the final number to be around the low double-digit area.

In the plant-based arena, Nomad launched its Green Cuisine brand in the UK and Ireland last year followed by Germany and France. And by the end of this month, the brand will be available in the Netherlands, Italy, Spain, Belgium, Austria and Portugal, Descheemaeker confirmed.

The brand now holds a 5% share of the UK meat-free market, which the CEO said is worth around EUR245m (US$278.5m) in terms of the frozen category. But private label is much larger, with a 19% slice of the UK market, he added.

Descheemaeker reiterated previous comments that revenues generated by Green Cuisine are on-track to reach more than EUR100m by 2022. Over the last week, the company has introduced new lines for the brand – meal mixes for Bolognese, Mexican-style Fajita, and Chilli Con Carne, along with its first fully vegan, meat-free ‘sausage’ rolls. 

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Free Report
img

What’s the forecast for the food and grocery industry?

The food and grocery sector thrived during the pandemic, largely due to the shutdown of the food service industry and the sector’s subsequent necessity, panic-induced bulk purchasing, and spending more time at home. The market has grown as a result of inflation. Consumer unwillingness to go out and socialize, and the reopening of several hospitality facilities, helped maintain the demand for groceries, particularly online, in 2021. As consumer behavior changes, we consume more food and drink at home, and inflation increases basket sizes. GlobalData predicts that the sector will continue to hold a higher share than had been predicted prior to the pandemic. This is true despite the fact that the food and grocery sector's share of overall retail will decline from its peak in 2020. This report will discuss market forecasts and key themes in the global food & grocery industry in 2022 and beyond. It covers:
  • Market drivers and inhibitors
  • Five-year forecasts and the impact of COVID-19
  • The performance of the online channel versus offline
  • Major trends in the market including rapid delivery, ambient retailing, supply chain disruption, and inflation
Assess developments within this sector to help your business thrive in 2022 and beyond.
by GlobalData
Enter your details here to receive your free Report.

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