Frozen food in Belgium and The Netherlands benefits by the economic recession, as consumers search for a more affordable alternative, similarly to other European regions. Although still perceived as the lesser option, compared to fresh food, volume sales increased in both countries and are expected to improve in the near future.
One of the main trends recorded in terms of consumer behavior is the increasing lack of time for meal preparation, especially in The Netherlands. Thus, sales increases are driven not only by the convenience and price considerations, but also by the customers’ need to devote less time to cooking, a reason why frozen food is perceived as the best alternative. On account of the major sporting events that took place last year, such as the Euro 2012 and the Olympics, among the best performing categories in this segment were frozen ready meals and frozen pizza, due to the fact that customers preferred to spend less time in the kitchen and more time in front of the TV. According to Leatherhead Food Research, in 2011/2012, the Dutch ice cream market was worth EUR670m, with a per capita consumption of 8.9 liters and own-label penetration for the Dutch frozen foods market is 26%. The total value of the frozen food market at retail level was of EUR 3.25bn in 2011, while the market for frozen bakery and desserts was estimated by Leatherhead Food Research at EUR30m, plus an additional EUR5m for sales via the foodservice and wholesale channels. As for the category perception in The Netherlands, frozen food still suffers from a slightly negative view, as having less vitamins and nutrients, compared to fresh food, especially concerning the frozen vegetables. In 2011, Dutch production of frozen potato products shrunk from 1.49 million tons to 1.45 million tons, while the country exports 1.2 million tons of frozen potato products per year, of which 90% is destined for the EU region. The good news is that producers of frozen food continue their efforts to improve brand image and awareness among consumers, via all kinds of marketing activities. According to researcher Euromonitor International, the most popular type of frozen processed red meat in The Netherlands is frikandellen, a traditional and favorite snack product, widely consumed in the foodservice channel; also kroketten increased their retail value share in 2012 to remain only slightly behind frikandellen. “Other” frozen processed food includes specific products such as spring rolls, known in the Netherlands as loempias. The outlook for frozen processed food remains positive with forecast growth in terms of value sales. The growth, however, will not be as high as it was in from 2006 until 2012, as the situation will stabilize and the economy is likely to remain uncertain and then see a slow improvement, according to predictions by Euromonitor International. Frozen processed food is still considered an underdeveloped sector in The Netherlands when compared to neighboring markets such as France or The UK. Manufacturers regard the consumer preference for fresh and chilled products as the main reason why relatively few Dutch consumers have shifted to frozen processed food.
Weaker prospects in Belgium
Compared to its northern neighbor, consumption of frozen food in Belgium was weaker, with a negligible increase in retail volume growth. According to trade sources, the main buyers and consumers of frozen processed food remained 45-year-old consumers and above in 2012. However, oven baked potato chips experienced an increase in demand among all consumers, due to convenience. With regard to current retail value growth, price volatility of raw materials resulted in growth of 3%, which was thus higher than retail volume growth in 2012. According to Euromonitor International, despite the increasing trend of cocooning in Belgium, consumers showed increased interest in convenience in terms of meal preparation in 2012, therefore the amount of time needed to prepare products remained a criterion in the purchasing decisions of consumers. This presented opportunities in frozen desserts, which performed well in 2012, achieving retail volume and current retail value growth. Frozen red meat consumption was among the weakest categories in Belgium and is expected to record a dramatic decrease in sales, because of the recent horsemeat scandals in Europe. Research by Euromonitor International shows that frozen processed food is expected to grow in terms of retail value, between 2013 and 2017, however, at a slow pace of no more than 2 per cent. In comparison to the review period (2006-2012), the performance of frozen processed food in both retail volume and constant retail value terms is expected to be weaker over the forecast period (2013-2017). Frozen processed food is expected to experience reduced consumer demand and thus to suffer a decline in retail volume terms. This downward trend is expected to be due to price increases and decreases in the purchasing power of many consumers. In addition, competition from chilled processed food and canned/preserved food is expected to hamper the retail volume growth of frozen processed food over the forecast period. The increasing demand for convenience among consumers and the busy lifestyles of consumers are expected to help drive the retail volume growth of frozen processed fish/seafood over the forecast period. Consumers are expected to switch to these products, due to ease of preparation and cooking, as well as their health benefits. In addition, product innovation is potentially expected to boost consumption of frozen processed fish/seafood, thus, this category is expected to achieve the highest growth in constant retail value terms in frozen processed food over the forecast period, according to the data provided by Euromonitor International.