The dominant trend driving growth in the global frozen food market is convenience. The most successful new product development reflect growing consumer demand for products that ease the effects of increasingly busy lifestyles and the consequent constraints on food preparation and shopping time.
This new report reveals strong sales figures for frozen ready meals and pizza, reflecting the growing consumer demand for convenience and value-added product innovation.
The westernising influence on world diets and culture also proved beneficial to growth in frozen pizza sales around the developing world. Even in developed markets the sector benefited from its cultural heritage and the healthier image of Italian diet.
Niche frozen food fulfills promise
The global report also explores how ‘other’ frozen food (comprising frozen snack products, rice, fruit, herbs and a host of national specialities) has demonstrated strong growth, acting as a stimulant to the overall frozen food market. The proliferation of new snack products and a willingness to pay premium prices for added-value food continue to drive demand.
As the largest segment in frozen food in terms of volume sales it owes its position to a wide geographic reach and its accommodation of a wide range of national specialities. However, its ranking in terms of value sales is lower, indicative of the low unit price attached to these products, especially in the key Chinese market, the second biggest Pacific market in the world after the US.
Health concerns fuel frozen poultry and fish/seafood sales
Frozen poultry and fish/seafood both performed strongly in the last 6 years. Health benefits associated with white meat and fish consumption also aided growth, along with product innovation. This sector has also benefited from the troubles which beset frozen processed red meat in the middle of the review period.
However, with the development of premium-positioned products and an expansion into emerging markets, red processed meats’ has been revitalised to some extent, after the negative impact of the BSE crisis.
Gourmet cooking and segmentation
The report also focuses on the related trends towards gourmet and ethnic products in frozen food, with media attention on food and cooking and an increase in international travel inspiring a growing willingness to experiment with novel flavours and ingredients.
Moreover, the report highlights the developing trend towards product segmentation, which is starting to play an increasingly important part in product development strategies. The result is a growing number of products targeting specific consumer groups such as children, teenagers and young adults. For instance, teenagers and young adults are increasingly targeted by manufacturers of portable products such as frozen snacks and takeaways and in developing markets, Western-style hamburgers and chicken nuggets
Role of packaging
Packaging will play an important role in stimulating growth over the forecast period. The report considers how manufacturers can expect this strategy to increase brand recognition and how technological innovations that are firmly embedded in the US are expected to spread to other markets during the forecast period.
Prolonged storage life benefiting product freshness and flavour will also determine packaging developments over the forecast period. New zipper bag technology will provide consumers with products than can be resealed once opened, thus prolonging flavour and texture, while break-apart trays and other forms of portable packaging will continue to be developed. Packaging developments will include an increase in single serving and smaller size packs, quality-of-origin labels and labels with health-related information.
Also likely are more freezer-to-appliance products that do not need defrosting.
A fragmented market
The logistical difficulties involved in establishing a broad geographic presence and traditional patterns of purchasing products such as meat and fish have led to the development of a highly fragmented market, with many manufacturers deriving much of their overall share from their position in one or two particular areas.
In 2002, the top 10 manufacturers accounted for a combined share of 29.6% compared to 28.2% in 2001 – a relatively low concentration compared to other food markets. To a great extent, the larger share in 2002 in comparison to the year before reflects the stronger positioning of world leader Nestlé. It also points to smaller companies holding increasingly lower shares of the market.
Euromonitor also reveals how this situation has combined with the central role of supermarkets in frozen food distribution, leading to the development of an extremely strong private label segment. Supermarkets and discounters in North America, Western Europe and Australasia continue to develop their private labels, which targeted both the economy and premium end of the frozen food market, thereby expanding frozen food product ranges.
In the report, Euromonitor demonstrates how manufacturers’ requirement to develop strong and distinctive brand identities is all the more urgent, as they attempt to define their brands in contrast to private label goods. However, this task may prove uphill as private labels themselves become evermore sophisticated.