The average unit price in the frozen food division was up 17% to $4.91 in September 2022 versus September 2021, and up 31.6% over 2019, according to IRI sales data.
The increase comes before overall store-wide inflation, which was +14.3% in September 2022 versus a year earlier.
The frozen categories with the largest year-over-year increase in unit price (September 2022 vs September 2021) included fruits and vegetables (+19.2%), snacks (+19%), meals (+18.8%), and meat/poultry/seafood (+17.9%). ).
Only one region, frozen drinks, averaged a single-digit price increase (+7.1%) year over year.
Total food and beverage sales (measured channels, retail, IRI) were up 9.5% year over year in September 2022, with units down -4.1%, while frozen sales were up 9.7% with units down -6.2%.
Great CPG and Frozen Food
Major players such as Conagra Brands (Bird’s Eye, Marie Callender’s, Banquet and Healthy Choice) and General Mills (Häagen-Dazs and Totino’s) reported strong sales in their frozen food portfolios and investment in frozen food offerings.
“Frozen” achieved significant acceleration in quarterly sales growth on a one-year and three-year basis at 8% and 27%, respectively. It’s clear that our focus on meeting consumers’ preferences for comfort, quality and great taste continues to resonate.”Conagra President and CEO Sean Connolly said on the company’s first-quarter 2023 earnings call.
In August 2022, General Mills announced a $100 million investment in one of its factories to manufacture Totino’s frozen pizza products.
Earlier this year, the US company Nestle owned Sweet Earth Foods expanded its frozen foodsline to meet the demand for convenient and vegetarian nutrition.
Acosta: Consumers still believe frozen provides better value
But even with the average unit price of frozen products rising in double digits compared to last year, consumers continue to choose frozen products as an essential part of their shopping experience, noted Kathy Risch, Senior Vice President, Consumer Insights and Trends at Acosta.
“We have found the purchase criteria to be balanced between affordability and value requirements, healthy options that meet diet or lifestyle needs, ease of preparation and a bit of convenience,”Rich said.
Acosta found that 98% of households buy frozen and 86% of these shoppers visit the frozen section on all or most of their grocery visits.
While 93% of shoppers note higher prices for frozen foods, 67% of consumers still believe that frozen sometimes offers better value than non-frozen on certain categories of vegetables, fruits, meat, fish and pizza and 40% of shoppers spend more time searching for deals in The frozen foods aisle, according to Acosta Research.
Acosta found that part of the bargain hunt is in club stores where shopping for frozen foods has jumped 5% this year, with 52% of households reporting buying them in bulk to save money.
In addition, consumers’ purchase of frozen foods is often planned against impulsive decisions, and consumers often prefer purchasing frozen foods in the store versus purchasing online under the pretext of dealing with concerns as a major impediment.
When it comes to what consumers are looking for and buying in the frozen foods aisle, 91% buy sweets to satisfy cravings for comfort, convenience and luxury.
Many consumers (89%) buy prepared foods and 59% of consumers substitute a frozen main course as an alternative to eating out. Acosta noted that three-quarters of vegetables purchased as frozen vegetables are often seen as better value than fresh ones.
Invest in the frozen food aisle
To capitalize on consumer loyalty to the frozen food aisle, Acosta recommends manufacturers and retailers invest in their frozen food groups with clear marketing communication and packaging on the value proposition of frozen foods, especially bulk items and appetizers.
“Highlighting fit-for-meal solutions and communicating dinner-meal solutions that mix and match fresh and frozen foods,”Note Acosta.
Health messaging also needs to be front and center with retailers and brands promoting the preserved healthy nutritional content of frozen foods and upping the ante with healthier innovation such as offering more vegetarian options.
Acosta also advises retailers to make the freezer section an enjoyable, fun and engaging shopping experience for consumers.
“There is an opportunity to put more effort into interacting with customers and increase excitement and buying in the frozen department, in-store and online, through targeted omnichannel marketing, sales merchandising, and experiential retail. Understanding the consumer mindset in a frozen state will play an important role in supporting projected growth and driving purchasing decisions”,Rich said.
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