Frozen Food in Germany: Resilience in the Face of Adversity

Sales are suffering from the catering current crisis – frozen pizza celebrates its 50th birthday. One’s joy, the other’s sorrow, this is how the situation in the German frozen food market can be described.

By Dan Orehov

In the growth-affected industry, there is a differentiated market development due to the effects of the COVID-19 pandemic: while in the food trade (LEH) and frozen home services there are significant increases in frozen food turnover and sales compared to the previous year, frozen food manufacturers and retailers are suffering who specialize in the out-of-home market (AHM), under the loss of demand in the catering industry.

Frozen Food is booming in the grocery trade and home services

According to a forecast by the Deutsches Tiefkühlinstitut e.V. (dti) for the sale of frozen products in grocery stores and frozen home services last year, the market was expected to grow by 7.5% in 2020. In the first phase of the Corona crisis in particular, consumers avoided shopping aisles and at the same time liked to stock up on long-lasting food. The choice of products at home and delivery directly to the front door are convincing services of frozen food home services for many consumers in the Coronavirus period. These reasons initially led to clear double-digit growth rates in all frozen goods product groups, which are currently slowly declining. Sales of frozen potato products (+ 16%), frozen vegetables / herbs (+ 15%), frozen fish (+ 14%), frozen meals (+ 10%) and frozen baked goods (+9%).

50 years of frozen pizza

An absolute favorite from the freezer is celebrating its 50th birthday: frozen pizza, which one could buy in Germany in 1970 for the first time in grocery stores. Since then, the frozen pizza success story has not stopped, on the contrary: The product group is enjoying steady growth year after year and is the most popular frozen food category in the food trade, followed by frozen dishes and frozen vegetables. The most popular with consumers is the pizza salami, which is the undisputed number 1 on the popularity chart for pizza types. Every German consumes an average of 13 frozen pizzas per year. In the first half of 2020, sales of frozen pizza rose by 7%.

Gastronomy sales suffer from COVID-19 restrictions

For the sale of frozen products in the out-of-home market, which has a share of over 50% of the total market, it is difficult to make a reliable forecast, as it is currently not foreseeable how the pandemic will affect gastronomy in the long-term. According to the industry association Dehoga and the market researchers of the npd group, the current occupancy rate in the catering industry is on average 70% – after a drop to 50% at the beginning of the lockdown – and is currently not recovering. On the contrary, in the cold season of the year a decline in the number of guests and expenses can be expected again. Frozen products can help many catering businesses to survive the corona phase economically, because they can be used depending on current needs, thus creating flexibility and cost-effectiveness. Nevertheless, 2020 is likely to go down in history as the year in which TK sales in the out-of-home market collapsed for the first time.

To read the entire, please access your complimentary e-copy of Frozen Food Magazine, Jan-Feb issue here.

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