More focus on breakfast and better-for-you in the freezer case can help stem the tide of year-to-year sales drops
When it came to stocking up on grocery items during the pandemic, frozen foods were hot. The question is, how much of the sales gains that supermarkets achieved in 2020 will melt away in 2021?
With many restaurants closed or operating at limited capacity, and amid a broad shift toward working from home and remote schooling, sales of frozen breakfast items, family meals, snacks, appetizers and desserts soared in 2020.
“At Giant Eagle, we’ve noted increased guest interest throughout the frozen food category, especially in family breakfast and dinner items,” said Jannah Jablonowski, a spokesperson for the Pittsburgh-based chain. “Frozen pancakes, waffles and breakfast sandwiches have been particularly popular, as have pizza offerings and other multi-serve dinner entrées.”
“Frozen pancakes, waffles and breakfast sandwiches have been particularly popular, as have pizza offerings and other multi-serve dinner entrées.”
- Jannah Jablonowski, Giant Eagle spokesperson
Across the industry, dollar sales of frozen foods grew 21% in 2020, driven by increases in the number of frozen food trips and spending per trip — resulting in a 19.4% increase in spending per buyer, according to the Power of Frozen in Retail report from the American Frozen Food Institute and FMI. The report also found that 57% of consumers continue to purchase more frozen foods than they did before the pandemic. Dollar sales rose in double digits across nearly all major categories, including gains of 30% and higher in frozen seafood and processed poultry.
Loan Heilner, associate category merchant for frozen, baby and pet categories at New York-based e-commerce retailer FreshDirect, said sales of frozen foods have remained “significantly elevated” long after the early surge in stock-up buying last spring.
Frozen breakfast items including croissants, bagels, pancakes, waffles, breakfast sausages and heat-and-eat breakfast meals and sandwiches have all been popular, she said, as homebound consumers replace their morning out-of-home breakfast stops with items from their own freezers.
Additionally, FreshDirect has also seen large sales gains in frozen fruit and vegetables, snacks, and appetizers, pizza and pasta as customers searched for longer shelf-life items to store at home. Sales of frozen pasta dishes, for example, were up 82% in 2020 at FreshDirect, Heilner said.
She said the “cooking fatigue” induced by the pandemic has helped drive more meal solutions and prepared foods in the frozen-foods category. The company has also begun to see an increase in demand from its corporate customers for individual frozen meals, including breakfast and lunch options, as workplaces have reopened.
Giant Eagle’s Jablonowski said the chain is preparing for consumers to gradually drift back toward their former restaurant-dining routines.
“Understanding that this anticipated shift will result in fewer meals prepared at home, we are working to fine-tune our selection of restaurant-quality dinner options to offer Giant Eagle guests elevated food experiences at an excellent value,” she said.
Although shoppers splurged on frozen treats in 2020, the pre-pandemic trends around better-for-you items and plant-based foods have not gone away, said FreshDirect’s Heilner.
“As customer behaviors normalized, we have seen a return to the focus on wellness and better-for-you items stronger than ever,” she said. “Customers with families to feed are especially looking for cleaner meal solutions and snacks to feed their children.”
“As customer behaviors normalized, we have seen a return to the focus on wellness and better-for-you items stronger than ever. Customers with families to feed are especially looking for cleaner meal solutions and snacks to feed their children.”
- Loan Heilner, associate category merchant for frozen, baby and pet categories at FreshDirect
Heilner noted that frozen plant-based meat alternatives had already been gaining traction before the pandemic.
“This is a category we expect to continue to grow as consumers seek out sustainable, plant-based proteins, and especially within frozen, where there is an ever-increasing selection of innovative brands,” Heilner said.
Other better-for-you frozen categories ripe for growth include foods that boost immunity, such as bone broths and fruits and vegetables, she said.
Anne-Marie Roerink, principal and founder of 210 Analytics, which compiled the Power of Frozen report, agreed that broad consumer interest in health and wellness will continue to drive sales of frozen foods. This is evidenced by the increasing amount of front-of-pack claims on frozen products and the strong sales growth of items such as seafood, fruits and vegetables.
“These items can be the jumping-off point for even more shoppers to start exploring other items in the frozen food aisle,” she said.
Other frozen-food trends Roerink sees propelling the category include above-average growth through e-commerce, and the cost efficiency of frozen foods amid an economic downturn. She predicts that frozen foods could be one of the few supermarket departments that will come close to retaining the sales gains of last year.
“Success in frozen foods lies in its wide variety and getting people to shop across a greater number of categories,” she said, citing opportunities for cross-merchandising similar to the tactics used in fresh departments. “People may simply not be aware of the great variety in frozen plant-based meat, poultry and seafood, for instance. Or the ever-growing availability of breakfast sandwiches that just require reheating. Or the innovations that are specifically geared toward instant pot kits and air fryers.” Another key to driving sales in the department is encouraging consumers to include frozen on their weekly shopping lists, rather than thinking of it as a backup solution.
“Having suggestions for the meal lineup that mix fresh and frozen can be a great way to capture more meal occasions overall,” Roerink said.
The supermarket freezer case proved to be a source not only for practical meal solutions during the pandemic, but it also provided a ready supply of sweets and baked goods for consumers seeking to elevate their mood or celebrate special occasions.
“As consumers have celebrated special events and holidays with smaller gatherings, we have seen increased interest in frozen novelties as well as pies and other desserts,” said Jannah Jablonowski, a spokeswoman for Giant Eagle.
Anne-Marie Roerink, principal and founder of 210 Analytics, which compiled the 2021 Power of Frozen report, said consumers appeared to shop the freezer case before the holidays to stock up on items that they might otherwise have bought in the bakery, such as rolls and pies.
“We actually saw the week before the holiday week being the biggest one, as people tried to avoid big crowds and shop early,” she said, predicting that trend will not last as consumers return to their pre-pandemic patterns.
At New York-based FreshDirect, the e-commerce retailer said sales of ice cream and novelties were up 78% in 2020, outpacing growth in the frozen category overall.
“Novelty items offer people something unique and special,” said Loan Heilner, associate category merchant for frozen, baby and pet categories at FreshDirect. “They’re just really fun products that bring small moments of joy to a customer’s day.”
“Novelty items offer people something unique and special. They’re just really fun products that bring small moments of joy to a customer’s day.”
She cited as an example the Not Fried Chicken frozen novelty from Life Raft Treats, which recently launched at FreshDirect. The ice cream bar, made to look like a fried chicken drumstick, features a waffle-flavored ice cream center, with a chocolate-covered cookie piece as the bone, caramelized white chocolate on the outside and is topped with crushed corn flakes.
“This kind of daily joy is what we’re hoping to give customers every time they shop with FreshDirect,” Heilner said.
