Four things you need to know about Frozen Food

1. The frozen food category is growing by +7.7%, but convenience is falling behind

2. One third of shoppers have recently bought premium frozen lines

3. Promotional spend is not the key to category growth

4. 49% of Brits either alter the family meal to their needs or have completely different meals at the same table

1. The frozen food category is growing by +7.7%, but convenience is falling behind

Frozen is the backbone of a convenience store food offer. A broad range enables a store to offer a solution for the valuable meal-for-tonight mission, as well as trade up shoppers with desserts and sides. Longer shelf lives negate some of the wastage that comes with fresh & chilled, with comparatively lower price points appealing to cash-strapped shoppers.

The category is in rude health in general, but convenience stores are missing out on the opportunity. Matthew Wilson, marketing controller at Young’s Seafood, says: “While the total frozen category is growing across grocery in general as consumer seek out convenient, tasty, value-for-money products, in convenience we’re seeing decline.

“It’s a trend that’s also reflected in frozen seafood, with the category down -31% in convenience, vs growing +3.3% within wider grocery.”

According to data from Circana, the symbols and independents channel has a 10.8% value share of all food sales but has significant under-trade in frozen, where the channel is just 5.6% of the frozen market, despite an over-trade in ice cream where these stores have a 12.8% value share.

For Wilson, the reason behind this gap is because of how consumers are shopping. “We’re seeing families and consumers with lower disposable incomes, traditionally key buyers in this category, increasingly turning to the weekly big shop and the discounters for their frozen purchases,” he says. “However, there are some areas of the frozen category within convenience that are thriving, with pizzas (+7.9%) and ice cream (+7.6%) both performing strongly.”

Price-marked packs, always a staple of the category, are essential for appealing to these shoppers to bring growth back.

Data from TWC points to another evening mealtime element as being the main area of growth for convenience stores. “Potato products are the only sub-category showing growth in unit terms over the past 52 weeks, at +1.5%. This is largely driven by chips, which accounts for almost 75% of the category and is growing at 6%,” says Tom Fender, the company’s development director. “Frozen cakes & desserts account for the largest share of frozen category unit sales, at 46.2%.”

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2. One third of shoppers have recently bought premium frozen lines

Some retailers, however, are bridging the gap with a focus on premium lines. “Customers are coming in and buying more frozen items than ever before and ready meals are selling especially quickly,” says Mike Lakhani, owner of St Mary’s Supermarket, Southampton. “We’ve seen an increase in sales and volume, and customers are moving to more premium brands than own label. Budgeting and the cost-of-living crisis has impacted the category, however, and we’ve had to install an additional freezer to accommodate the demand towards frozen as shoppers look to save money.”

Frozen foods enable shoppers to buy premium products at a fraction of the cost of, for example, premium fresh and chilled lines. Their longer use-by dates also mitigate the risk of wastage, making them a popular solution for affluent shoppers who are now having to cut back on the premium products they are used to.

Matt Whelan, Fieldfare managing director, said: “People are looking for premium frozen products and this represents a big opportunity for retailers. The largest group buying premium frozen is the 55+ age group, which in general, is a cash-rich demographic, so it is important that convenience owners target this key shopper group.

“These shoppers may typically have shopped only fresh in the past but have now discovered the value of frozen foods.”

The weighting towards older shoppers continues to be tilting in their favour. Seventy-six per cent of frozen fish sales from those who are aged 45 and over, slightly up from 75% two years ago. Thirty-eight per cent of the sales are from shoppers aged 65 and over.

The meteoric rise of the air fryer is responsible for driving excitement and premiumisation in the category. Now owned by 45% of households, brands are now launching premium products to appeal to this style of cooking. McCain recently launched Deep Ridge Crinkle Fries and French Fries in a format marketed as particularly suitable for air frying.

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3. Promotional spend is not the key to category growth

Retailers looking to inject growth back into the category may be considering upping their number of promotions to create buzz around frozen in store. This would be a mistake, argues Alex Lawrence, insights director at Circana, however, it can play a role for brands.

“Increasing promotional spend is not boosting the growth of the category but is helping brands to win share from private label,” says Alex Lawrence, insights director at Circana. “Private label value share was up 1.1PP in the past 12 months vs the previous year, but is now just 0.5PP up in the past 13 weeks, on a downward trajectory as private label loses unit share.”

Rather than deep-dive deals, retailers are reporting having more luck by creating evening meal cross-promotions, which are more relevant to shoppers and make the decision easy.

“We offer a couple of meal deals in our frozen range. Customers can buy a curry and naan bread for £4. We also do a £5 bundle each month, so this month is chips, pizza and ice cream,” says retailer Mike Lakhani. “Our bestselling lines are frozen curries, meal deals and pizzas. We want to expand the category as it’s so popular, but space is an issue for us.”

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4. 49% of Brits either alter the family meal to their needs or have completely different meals at the same table

The old stereotype of the cereal packet family sitting down together at the dinner table to enjoy the same meal has changed. While lockdown briefly saw a return to traditional mealtimes, more recent research from Sainsbury’s found that 55% of the population struggle to find time, with only 28% of families sharing the same meal each evening.

Frozen is complementary to this trend, with consumers able to use different sides and ingredients to cater for different evening meal times and dietary requirements and preferences. Priyesh Vakeria, of One Stop Carlton Convenience in Salford, is tapping into this flexibility with an expanded meal deal. “Our meal deal is £6 and shoppers can get a main and two sides. For example, shoppers can buy a pizza as a main and pair it with desserts and garlic bread. It’s broad enough to offer our shoppers plenty of choice,” he explains.

For retailers wanting to capitalise on these changing family dynamics further, consider introducing more flexibility in your range by offering loose products.

“Offering loose or individually portioned foods is becoming increasingly important as the number of single and couple households in the UK continues to rise and as family dynamics lead to an increased need or requirement for individual meals at the dinner table,” says Fieldfare’s Matt Whelan. “This is where frozen foods like Fieldfare’s loose or individually portioned foods are perfect as families can simply keep products in their freezer until needed and each member of the family can enjoy what they want as and when needed.”

Frozen food remains an exciting and dynamic category for retailers who are looking to win shoppers’ loyalty. While retailers should be careful not to alienate those who are shopping the category on a budget, there are opportunities to stretch profits with premium lines that still offer great value. 

Balance this well and create a range broad enough to cater for individual tastes at dinner time and you will have created a frozen range that’s fit for the future.

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