Merchandising Features / Trend Features
Frozen Spotlight

Frozen Goes Healthy

April 11, 2012
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Frozen foods are keeping pace with evolving shopper demands.

While assortments were once limited to such staples as turkey pot pies, fried chicken with macaroni and cheese, and Salisbury steaks with mashed potatoes, product ranges are expanding—with among the strongest inroads being made into the better-for-you sector.

Indeed, suppliers are responding to the growing shopper interest in health-oriented products by rolling out frozen natural and organic offerings, along with products that are free of gluten and trans fats, and low in sodium, calories, carbohydrates and sugar.

“Consumers do not want ingredients that they cannot pronounce,” says Rob Johnson, associate brand manager for Omaha, Neb.-based ConAgra Foods Inc.’s Alexia brand. “They are more comfortable knowing what’s in their food.”

The majority of Alexia products are frozen potatoes that are all-natural and trans fat-free.
The newest items are in the Sauté line, which offers all-natural, trans fat-free artisan vegetable and potato medleys that come with a pouch of olive oil for quick sautéing.

Mintel International Group Ltd., a London-based market research firm, notes in its October 2011 Natural and Organic Food and Beverages—The Market—U.S. report, that the natural and organic food and beverage sector grew 20 percent between 2009 and 2011—which reflects a market that is remarkably resilient in the face of continued economic stagnation .

The gluten-free sector also remains strong. Mintel reports that revenues from gluten-free frozen lunch and dinner entrées increased from $106 million in 2009, to $124 million in 2010, to $147 million in 2011.

Much of the demand for healthier frozen foods is being driven by persons under 35.
“The rising generation of Millennials work a lot and need convenient food items, but they understand better-for-you eating,” says Joe Kramer, brand manager of Kashi Co., a La Jolla, Calif.-based supplier of all-natural breakfast, snack and frozen foods. “This group has grown up understanding low fat and low sodium, and has a better knowledge of all natural and organic. However, these consumers do not want to sacrifice taste for healthier options.”

In January, Kashi introduced Steamed Entrées that feature pasta and pilaf assortments, including chicken and vegetarian options. Kashi products do not contain beef or pork.
Kara Nielsen, trendologist at the San Francisco-based Center for Culinary Development, adds that Millennials have high expectations of flavor, ethnic and healthy foods, and many are vegetarians, which presents new opportunities for suppliers and retailers.

“Each year another batch comes of age—this is a huge market,” she states. “This generation has high standards, but many do not know how to cook so they turn to convenience items.”

Laura Kuykendall, director of marketing for Laval, Quebec-based Glutino Food Group, a supplier of frozen gluten-free offerings, agrees.

“As the gluten-free category has grown and evolved over the past few years, people living gluten-free are expecting products that offer better taste, more variety and more nutritional benefits,” she states.

A newer Glutino addition is frozen Genius-branded bread that is available in White and Multigrain sandwich offerings. Seeded and Cinnamon Raisin varieties are scheduled to be added this year.

While younger shoppers are primarily driving the launch of many new frozen offerings, older consumers (above age 35) also are interested in such items.

In addition, Mintel reports that households with lower incomes have the highest levels of penetration for natural frozen and refrigerated foods—partly because many of these consumers perceive frozen offerings to be less expensive than non-frozen natural and organic selections.

To spur more activity among all shopper segments, some merchandisers suggest that retailers have in-store samplings and point-of-purchase (POP) marketing vehicles.
“Though space is at a premium, a lot of purchasing decisions are made at the POP so retailers also need to have well-stocked, well-organized assortments to help make consumers’ decisions easier,” Kramer says.

Johnson adds that retailers also have to find the right balance of promoting frozen foods at the case without cluttering the area.

He advises marketing the categories in a way that attracts the most incremental consumers.

“Retailers need a mass brand and a private-label brand, but they also need a premium brand to address those consumers who might not necessarily shop the frozen aisle, but spend more,” Johnson states. “There are exponential implications for the dollar ring.”
Nielsen, meanwhile, notes that endcap freezers generate the most attention and suggests that operators consider cross-merchandising frozen items.

“Retailers could try a small freezer case in the deli near the grab-and-go items where they don’t normally have products for special dietary needs,” she says.

Suppliers also suggest that frozen foods targeting special dietary needs be prominently displayed and that there is dedicated space for each category, such as natural, organic, vegetarian and gluten-free, so consumers can easily find the products.

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