Technavio’s market research analysts predict the frozen food market in Europe to grow at a CAGR of around 4% by 2020.
“As clean label products are in high demand in the European frozen food market, companies have been compelled to eliminate artificial ingredients from frozen food products to appeal to health-conscious consumers. In this region, people are willingly paying more for healthier frozen food options, as they are organic, convenient, and completely natural. Also, the manufacturers are coming up with innovative products such as limited and seasonal frozen food, which are vegan and free from preservatives,” according to the market research company.
Though on-the-go food is the new meal trend in Europe, many value- and health-conscious consumers are opting for healthy alternatives and better-for-you products, as a substitute for snacks and fast food products. However, the high preference for on-the-go food products stems from the fact that most working people do not have time to cook. Also, innovations in defrosting technologies are creating new opportunities for frozen food that can be consumed both inside and outside the home. With the growing demand for portable frozen food, the market is expected to witness immense growth in the coming years.
The frozen ready meals segment will dominate the frozen food market in Europe during the forecast period and is expected to occupy more than 21% of the overall market share by 2020. Convenience and recipe sophistication are the main factors driving sales in this segment. Factors such as the increase in employment levels and a decline in average household sizes will help manufacturers to focus more on value-added ingredients, which are healthy and nutritious.
Hypermarkets and supermarkets dominated the frozen food market in Europe in 2015 and accounted for around 74% of the total market share in 2015. These are the most preferred distribution channels because they have a high level of manufacturer dependence on the shelf space. In-store promotions by retailers and price comparisons are some of the major factors why consumers prefer hypermarkets and supermarkets for shopping.
“The market is highly fragmented because of the presence of numerous small and large vendors. The vendors in the market compete on the basis of factors such as price, quality, innovation, reputation, and distribution. The market is subject to rapidly changing consumer demands and preferences that propel vendors to come up with new products,” said Technavio.
