Convenience is the main factor driving frozen snacks innovations across most markets; this has been the mainstay of the frozen foods industry. Globalization, and investment in strengthening distribution channels and cold chains, frozen food displays, and cold storage facilities are supporting the growth of the frozen snacks and pastries market.
By Prerna Chowhan, senior research analyst-FnBA, MarketsandMarkets Research Pvt Ltd.
However, it is the interesting combination of the demand for convenience and health, which allows scope for product innovation and differentiation, that makes the market attractive for both manufacturers and consumers.
The frozen foods industry primarily began as one that was limited to the provision of frozen cut fruits & vegetables and fries. However, this industry has grown into a highly inclusive one. Offerings from this industry now include frozen meats, frozen snacks, frozen pastries, replete with complete frozen meals. Consumer adoption of convenience products, such as frozen foods and snacks, has stemmed from an overall trend of lesser availability and investment of time in preparing complete meals. The rapid changes in lifestyles may be rooted in many factors, which includes an increase in the number of dual-income families. This factor, along with an increase in the number of nuclear families, increased socializing, and a large portion of the younger working demography, has further propelled the demand for convenience and snacking, which consequently boosts the market for frozen snacks and food products.
The growing demand for frozen snacks and pastries has ensured its major share in the global frozen foods market. An increase in snacking trends among the younger populace stands as a major propeller for this surge in demand. About 30% to 35% of the global frozen food market was occupied by the frozen snack and pastries segment in 2017. While the frozen snacks market is expected to witness a steady double-digit growth rate, ranging from 10% to 15%, the frozen pastries segment is expected to be growing at a single-digit growth rate, ranging from 6% to 8%, over a period of five years from 2017 to 2022.
The European Market
Germany, the UK, and France largely dominate the consumption and demand for frozen snacks and pastries in Europe. However, Italy, Spain, and other smaller countries in Western Europe also account for substantial market shares in terms of consumption of frozen snacks and pastries in the region. The region accounted for about 35% to 38% of the global frozen snacks and pastries market in 2017, thereby holding the largest market share. According to the FoodDrink Europe report of 2017, 14% of the household expenditure in Europe was on food and beverage products, and this amount is expected to increase in the coming years. Additionally, the consumption of packaged food and drinks in the region is projected to grow at 3% annually, till 2020, to reach about 953 billion packages by 2020, according to Smithers Pira, a packaging testing service provider in the US and the UK. Such factors are further expected to boost the market for frozen snacks and pastries in the region.
While on the one hand, the market for frozen snacks and pastries in the region is being driven by rising demand for convenience food, on the other hand, the market for these products is also being hindered in the region by the lack of sufficient distribution facilities. An important amenity that supports the growth of the frozen foods market is the presence of adequate refrigeration with a strong cold chain network. The lack of efficient cold chain infrastructure dissuades manufacturers from investing in this venture.
There is a growing demand for products that are healthier and those that consume less time in terms of preparation or consumption, and which provides manufacturers with opportunities with high growth potential. However, the ability of the manufacturers of frozen foods to tap this potential is restrained by the lack of support in terms of cold chain infrastructure, especially in organized retail spaces.
You can read the entire article in the May-June print issue of Frozen Food Europe