TRENDWATCH

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In recognition of National Frozen Food Month last March, SPINS’ Vice President of Sales and Emerging Brands Strategy Greg Hobby presented on frozen foods and market trends at AFFI-CON on March 4, which is hosted by the American Frozen Food Institute (AFFI). Hobby shared SPINS data on key frozen categories, using SPINS’ proprietary channels and attributes, such as Positioning Group, Functional Ingredient, Labeled Gluten-Free, Product Type, and more, to identify growth drivers and consumer trends. In this TrendWatch, we will dive into some of the frozen food trends a�ecting today’s retail landscape.

In the Conventional Multi Outlet (MULO) and Convenience Channels, the FROZEN department has grown only 1.5% over the past year to a $80.6 billion market. While products in SPINS’ Natural Positioning Group make up just 7% of total sales mix in these channels, they represent 57% of the total sales growth. This is a result of shifts in shelf assortment. SPINS data shows that the natural product share of FROZEN’s TDP (total distribution points) is 13%, but it accounts for 100% of TDP growth.

Delving deeper into category-level data for the MULO and Convenience Channels, shown below in the chart, reveals that products in the Natural Positioning Group are specifically driving growth in FROZEN DESSERTS, FROZEN FRUITS & VEGETABLES, and FROZEN PLANT-BASED MEAT ALTERNATIVES categories. Conventional retailers may be turning to natural products to garner consumer interest in the freezer section. FROZEN DESSERTS at conventional retailers became even more rooted in natural products when Halo Top achieved mainstream success in the past couple of years, and SPINS wouldn’t be surprised to see a natural product shake up another traditionally indulgent category, such as FROZEN BREAKFAST FOODS, in the coming years.

Conventional Positioning Group Specialty & Wellness Positioning Group

Natural Positioning Group

Note: The market size and growth rate varies from the previous data callout because the FROZEN & REFRIGERATED MEAT POULTRY & SEAFOOD category was removed in the above chart since it largely contains refrigerated items. Percentages may not add up to 100 due to rounding.

SPINSscan Natural and Specialty Gourmet (proprietary), SPINSscan Conventional Multi Outlet + Convenience (powered by IRI), 52 Weeks Ending 2017-Dec-31.

Category

FROZEN ENTREES

FROZEN DESSERTS

FROZEN FRUITS & VEGETABLES

FROZEN APPETIZERS & SNACKS

FROZEN BREAKFAST FOODS

FROZEN PLANT-BASEDMEAT ALTERNATIVES

FROZEN JUICES AND BEVERAGES

Total

Frozen Category-Level Annual Growth by Positioning Group in MULO + Convenience Channels

Sales ($B)

$18.3

$13.6

$5.9

$5.2

$3.8

$0.5

$0.2

$47.5

Sales Mix

88%

79%

90%

90%

95%

6%

99% ALL SEGMENTS DECLINING

86%

75%

9%

39%

82%

91%

31%

42%

4%

91%

61%

69%

7%

21%

51%

8% 13%

2% 8%

94%

% of $ Growth$ %Chg

4.1%

1.5%

0.8%

2.3%

3.4%

12.3

-13.5%

2.6%

NATURAL IN FROZEN

6%6%

6%4%

6% 9%

1%

6%4%

1%18%

3%3 %

NATURAL FROZEN FOODS

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Sales of natural products in the FROZEN department have grown 29.5% over the past two years to reach a $4.8 billion annual market. Year-over-year growth is high among the top subcategories for frozen natural products, with plant-based meals (FROZEN MEALS & ENTREES VEGETABLE and FROZEN PLANT-BASED NUGGETS & STRIPS & CUTLETS) experiencing standout success. Let’s examine this trend a little bit more closely.

Natural Frozen Product Sales Cross-Channel

Top Natural Frozen Subcategories

$3.7B $4.1B $4.8B

52 w/e01/03/16

52 w/e01/01/17

52 w/e12/31/17

+11.1%+16.6%

Ranked by Dollar Volume, Cross-Channel

FROZEN ICE CREAM

FROZEN MEALS & ENTREES VEGETABLE

FROZEN PIZZA

FROZEN FRUITS

FROZEN MEALS & ENTREES MEAT & POULTRY & SEAFOOD

FROZEN NOVELTIES

FROZEN PLANT-BASED BURGERS

FROZEN BURRITOS & POCKETS

FROZEN VEGETABLES

FROZEN PLANT-BASED NUGGETS& STRIPS & CUTLETS

Dollar Growth

28.0%

11.0%

7.7%

4.0%

47.8%

43.0%

9.4%

4.9%

7.9%

24.4%

SPINS data shows that FROZEN ENTREES have grown sales 4.1% to a $36.9 billion market across channels over last year, but those products that are labeled vegan grew 14.7% to $366.8 million! For example, the brand Sweet Earth Foods is finding immense success with its diverse lineup of natural vegan and vegetarian frozen entrées, which range from Basil Pesto Lasagna to Korean Japchae to Baja Breakfast Burrito, and it was recently acquired by Nestlé.

Besides reflecting a greater industry health movement toward plant-based foods, consumers may also be seeking out plant-based frozen foods because they are more hesitant to eat frozen meat (as opposed to fresh meat). Some of these plant-based meals, such as those from Sweet Earth, also have an upscale positioning with global flavors that likely resonates with millennials.

PLANT-BASED FROZEN ENTREES

SPINS called out prebiotics, plant fibers that nourish good bacteria in the gut, as a trend to watch in its Top 10 Trend Predictions for 2018. Among all departments, prebiotics are growing the fastest in the FROZEN department. Specifically, FROZEN ICE CREAM products in this segment with prebiotic content have seen skyrocketing sales in the past year. Prebiotics such as chicory root or inulin have a natural sweetness that can add to a product’s taste profile without adding sugar. Halo Top is a key driver of this trend, as its ice creams contain a chicory root marketed as prebiotic fiber content.

Hungry for more? Only SPINS’ Product Library’s proprietary attribution can provide you with a granular look at the evolving and nuanced health & wellness trends transforming retail today. Contact Vice President Greg Hobby at ghobby@spins.com or email spinsinfo@spins.com to dig deeper into data on frozen foods and other hot retail topics a�ecting your business.

PREBIOTICS

FROZEN PIZZAS saw a 0.8% sales decline over last year to a $9.8 billion market across channels. However, FROZEN PIZZAS that are labeled gluten-free grew sales 14.6% in the same time frame to a $259.6 million market. Using SPINS’ Product Type attribute also shows that other less traditional crusts have grown sales 6.7%, which includes several varieties of gluten-free pizza crusts. Growth-driving brands for gluten-free pizza crusts include Absolutely Gluten Free, Amy’s Kitchen, California Food Company, and Cappello’s.

The brand Cappello’s makes a special-diet-friendly frozen Naked Crust Pizza with front-of-label callouts like gluten-free, Paleo-friendly, and grain-free. This product also contains organic psyllium husk powder. Psyllium is a Functional Ingredient tracked by SPINS, known for its high fiber content and digestion benefits. It’s also been studied for the ability to reduce inflammation and cholesterol and regulate blood sugar levels in people with diabetes. SPINS predicts more functional fibers, seeds, and grains in FZ PIZZAS in the future.

GLUTEN-FREE FROZEN PIZZA

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