As a result of the coronavirus (COVID 19) pandemic, global sales of frozen processed meat are set to increase by 13% 2020, (USD-2019 current prices). In developed regions such as North America and Western Europe, demand has been running at a slow pace in recent years.
By Margaux Laine, analyst, Euromonitor International
However, in the first half of 2020, the closure of foodservice and home seclusion has led consumers to move back to more practical and affordable food. During lockdown, frozen food aisles were cleared out, and while stockpiling didn’t last long, demand for frozen food products continued beyond panic buying, with at-home consumption remaining strong further into 2020.
The Pandemic Impact
Some frozen food companies have had to reshuffle their entire supply chain to fulfil the demand, whilst adopting heavy sanitary measures. For instance, Tyson Foods, global leader in the frozen meat market, has seen significant production disruption; in the US, hundreds of its employees were hit by COVID-19, forcing the company to reduce production capacity and close facilities. Meat shortage sprang up in retail and despite the measures implemented after the first COVID-19 peak to maintain employees’ safety, the entire supply chain was affected, as the workforce was unable to come to work. Tyson Foods subsequently exported part of its production to China; however, in summer 2020, one of Tyson foods facilities saw produce banned from China, as a Chinese employee caught the virus while working on a Tyson Foods shipment. Due to these multiple supply chain incidents in production and distribution, Tyson Foods reported a fiscal third quarter profit decline of 22% in comparison to last year.
In comparison to other processed meat categories, chilled processed meat remains the biggest market globally. However, sales of frozen processed meat have seen the biggest jump in 2020 due to its affordable price positioning fitting with consumers’ high-volume purchase because of stockpiling, its multiple products’ offers and its convenience to prepare. Frozen processed meat is expected to see further significant growth, reaching USD31.5bn by 2024. In developing regions, the pandemic has necessitated higher hygiene requirements, leading consumers to choose packaged food over fresh food. In developed regions, frozen meat players should be able to stimulate demand in the future by offering innovative ranges and higher quality products, as consumers become more selective in their food choices. Whilst consumers want to reduce their time spent cooking, they are less inclined to compromise on health or culinary sophistication when it comes to ready-to-eat food.
Changing Perceptions
A steady trend towards clean labels in food has become clearly evident in frozen processed meat, especially in North America and in Western Europe where 50% of frozen food sales are made. Chart 2, below, shows that claims of natural ingredients and hormones/antibiotics free products are amongst the top 10 most cited claims in relation to frozen processed meat. Consumers place increasing value on a balanced diet and more ethical nutrition. For many years, frozen processed meat was perceived as cheap and made from low-quality ingredients, especially after the 2013 horse meat contamination scandal, so-called “Horse Gate”, that threatened the entire frozen beef industry in Western Europe. In order to improve this perception, brands have invested in improving their supply chain control and ingredient selection, and clean labelling helps accentuate this positioning.
The frozen poultry segment, responsible for 56% of frozen processed meat sales worldwide, is one of the main categories focused on these new requirements. In 2019, Nomad Food, third ranked player globally, has signed up to the European Chicken Commitment, to improve the welfare of the chickens ultimately used within its products. The shift towards free range chicken is not as fast in frozen food as it is in fresh food, due to the strong price sensitivity of the category. However, players are willing to improve their product information on packaging. For instance, the origin of the poultry is very often indicated and local sourcing is improving product awareness. As the number of strong players is growing across the industry, global brands will need to continue to adapt their offer to new expectations, which address the growth trends of convenience and naturality.
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