Despite a difficult and unpredictable year, the retail frozen food sector has continued to perform exceptionally well, with categories such as frozen confectionery and ice cream increasing in value and volume sales throughout the year. This is a review of 2016.
John Hyman, chief executive of British Frozen Food Federation (BFFF)
The UK frozen food industry has continued to innovate and drive production in products across the foodservice and retail sectors. The case for frozen food is no longer in dispute, thanks in part to BFFF and its members, who have built up a significant bank of evidence to promote the nutritional, cost, quality and sustainability benefits of frozen.
Annual Awards
This year’s BFFF Annual Awards highlighted the ever-increasing array of great-tasting, aspirational products now available across the retail and foodservice sectors. From coconut prawn to mushroom, cranberry and brie wellingtons, frozen food products are becoming increasingly more innovative and desirable. The frozen food industry is now offering consumers and foodservice professionals alike, on-trend ingredients and products. Exotic flavors from around the world such as Korean, Thai and North African are all offered from different products and the expansion of frozen food products that are exceptionally high quality not only drives sales but also helps to change perceptions of the category. Caterers and consumers are continuing to recognize that frozen food is nutritious, tasty and offers value for money, minimal waste and convenience.
Frozen Food Report
The success of frozen food across the retail and foodservice sectors was highlighted this year with the launch of BFFF’s Frozen Food Report II. The study, which was an in-depth look at the UK’s frozen food industry, its achievements and the influences that will help it grow, was launched at the Palace of Westminster in September. The report highlighted that the frozen food sector had added over GBP600m in value since the first Frozen Food Report was published in 2010 and predicted strong growth for the frozen food industry in the UK, with retail and foodservice sectors expected to grow 1-2% and 3-4% respectively. It also pointed out that factors such as the predicted increase in online shopping will help to level the playing field for frozen, as there are no physical constraints such as shelf space or positioning to sway customers. Also inflation will assist the frozen food industry, placing it in the ideal position to capitalize.
Brexit uncertainty
In Britain, the EU referendum has been the big news story of 2016. Even before the result was announced, the uncertainty caused by the ‘once-in-a-generation vote’, provided a certain degree of volatility within the markets and across the food industry. Immediately after the result was confirmed, the Pound fell to its lowest value since 1985, with a sharp drop in value seen against the Euro and US Dollar. This decrease in currency value has resulted in input costs increasing, with some businesses already publicly announcing price increases. With inflation rates now expected to reach 4% by the end of 2017, it is likely that the food industry will play a part in this increase. Higher input costs will put greater pressure on retailers, forcing them to increase their prices to ensure their margins are not affected. Until the Government outlines a structured plan for leaving the EU and a date is set for the triggering of Article 50, the uncertainty caused by Brexit is likely to continue for the foreseeable future.
Flexible frozen food
In times of uncertainty, flexibility is crucial. Being able to effectively meet ever-changing demands and challenges of a volatile market is imperative. I am confident moving forward that the numerous benefits frozen food offers will allow food businesses to meet the changing demands of consumers and markets. If retailers are forced to increase their prices in order to maintain their margins, it is likely that consumers will start seeking out greater value-for-money products and look to reduce costs in the home. Lastly, besides its flexible character, frozen food offers consumers high quality products at exceptional value for money, while also helping to reduce food waste.
