Frozen food has been a pandemic powerhouse and growth already outpaced total food and beverages in the three years preceding the pandemic, according to Sally Lyons Wyatt, IRI executive vice president and practice leader, that showcased the data during a presentation on the State of Frozen Food at the start of AFFI-CON 2022, hosted by the American Frozen Food Institute.
Going up against the biggest year in food retailing, frozen food sales in the traditional channels slowed to low single-digit growth in dollars and slightly below year-ago levels in units. However, dollars (+23.0%) and units (+18.0%) remained far ahead of the 2019 pre-pandemic normal. This is driven by above-average consumer demand and fueled by higher household penetration, more trips down the frozen food aisles, and higher spending per trip. E-commerce delivered an additional 12% boost, for an omni-channel frozen food category gain of 2% in dollars and -1.8% in units. Millennials, who represent about USD23 out of every USD100 food and beverage dollars, had a far greater contribution in frozen foods, especially in categories such as frozen fruit where they account for USD31 out of every USD100 spent. “Millennials love frozen foods,” said Lyons Wyatt. “Millennials view frozen food as convenient, fresh, and nutritious, and greatly appreciate the innovation the department brings every year.”
Plant-based plays a role across the grocery store, representing 41% of general food dollars and 22% of frozen food. Unit sales of frozen plant-based items were down 3.5%. Frozen dinners, meat substitutes and desserts account for 87% of all plant-based frozen sales. Dinners and desserts grew year-on-year, but demand for meat alternatives has softened.
The strong growth in frozen fruit and vegetables in 2020 brought a rising share of total produce dollars across the store. The share remained elevated in 2021. Frozen fruit had a small dollar increase, at +0.7% but could not quite reach the prior year levels in units and pounds — affected by an average in-stock rate of 90%. Mixed fruit items stood out as sales winners, a trend that is expected to continue in 2022. Frozen fruit also found pockets of growth in a number of sustainability-related claims, with above-average growth for recyclable and water conservation.
“Fruit has a distinct opportunity for continued growth,” said Lyons Wyatt. “Make the section easier to shop, with a good assortment and innovation in packaging and size. Entry price points and smaller bag options can be ideal to engage with smaller households and those with less freezer capacity.”
Looking ahead, preserving the enormous growth momentum in frozen food will require proactive in-stock management, addressing different needs and growth trends by channel, occasion-based and personalized promotions, and continued high levels of innovations.