It is common for consumers to view frozen food as an affordable option; however, consumers now also view frozen food as a solution that can deliver healthy, convenient, and simple to prepare meals in the comfort of their own homes. Although prices have increased, there is still robust demand for certain categories of food, including breakfast foods and entrees and dinners.
The frozen food sector experienced its first year of positive sales volume increase in five years in 2018, and according to research conducted by the Information Research Institute (IRI) and the International Dairy Deli Bakery Association (IDBA), the growth in sales of frozen foods between November 2019 and November 2020 was 17.4%, which was higher than the sales growth of the food category as a whole (IDDBA).
Even if the growth of the frozen food category has slowed down since then, analysts believe that the market for frozen foods will continue to rise across the world. According to The Frozen Food Report 2021 published by the British Food Federation, the market for frozen food in the country expanded by 4.6% to reach approximately GBP9bn, adding GBP2.4bn in sales since 2005. This figure represents a growth of nearly GBP1bn annually. Through the year 2030, it is anticipated that the market segment will continue to expand in the Asia-Pacific region at a compound yearly growth rate of 9.12%, ultimately reaching a value of USD145.22 billion. According to Verified Market Research, the market for frozen food in the United States is expected to expand to USD90.47bn by 2028, from USD62.39bn in 2020.
Opportunities Through Different Channels
Because more people were eating their meals at home during the pandemic, sales of frozen foods saw significant growth in 2020 and into most of 2021. In contrast, sales of frozen items have slowed down in recent months, which has been accentuated by decreasing in-stock levels and increased prices across the business as a whole. According to IRI, even though the unit growth of frozen products has slowed down in recent months, demand has remained high since 2019, and the price is the primary factor driving the expansion in the current market.
Even if price increases are not uniform across all frozen product categories, consumers believe prices have gone up. Promotions have not been turned up either by the merchants or the manufacturers. In spite of the fact that prices have gone up, there is still a strong demand for some types of food, such as breakfast items and entrees/dinners. It is essential to point out that the rate of frozen food purchases among Millennials, Gen Xers, and Boomers is comparable, however, the rate of frozen food purchases among seniors and retirees is lower.
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