Antibiotic-free chicken. Grass-fed humanely raised beef or lamb. Non-GMO. No artificial ingredients. These are the call-outs dominating the frozen aisle today. We’ve come a long way. With an identity once tied to belly fillers and highly-processed ‘TV dinners,’ our category has transformed with a fresh (but still frozen!) look, global ethnic flavors and premium culinary offerings. Innovation is plentiful with exciting ethnic varieties, unique flavor combinations and premium, artisanal ingredients. And our products have become more accessible with online frozen sales up 75%. Studies have even noted that today’s frozen foods rival fresh.
The NY Times recently exclaimed, “The Freezer is Hot.” and it is: 2020 category sales were up 23%, 200% above fresh according to a Deloitte study Leading a culinary revolution with a frozen foods brand for over the last decade, I can tell you that while there isn’t just one defining factor leading to the evolution of frozen and the immense consumer demand this past year, industry analysis and case studies prove that there is one dominating demographic: Millennials.
When launching Saffron Road more than 11 years ago, we studied the Millennial generation and their future purchasing behavior. We speculated that as they got older, had kids, bought homes, that they would have a higher income than previous generations, stronger demand for natural foods, would be discerning about their food choices and as a result, would be willing to pay more for those premium quality, unique flavors and clean foods. That speculation couldn’t have been more prescient.
Steady growth proved this to be true, but this past year catapulted frozen foods into a new dimension, thanks to the Millennial shopper. More than 50% of Millennials have said that frozen is equal to or Better-For-You than fresh. Today, older Millennials remain the largest segment — making up 48% of the core frozen food consumer.
Frozen has become a priority in American households, with 30% of shoppers increasing their freezer capacity since the onset of the pandemic according to research by the American Frozen Food Institute (AFFI).
What Millennials Want + The Why Behind the Frozen Tailwinds
A 94% surge in frozen foods early on in the pandemic came for obvious pandemic-related reasons: convenience, perceived safety, shelf life, single-serving options and ease in preparation. But what consumers new to frozen entrees discovered was the evolution of frozen foods, the abundance of better-for-you options and the plethora of innovation and ethnic flavors, equating to sustainable category growth.
We’ve experienced this surge at Saffron Road, particularly as a result of Millennials’ affinity towards clean-label and premium global cuisine. Ethnic foods are the ultimate uniting force in culture and they whisk you away to exotic places–two elements Americans were yearning for through the pandemic. Asian and Indian flavors, in particular, have really taken off and I anticipate we’ll start seeing more in Mediterranean, South American, Peruvian and Vietnamese cuisines, further helping to grow the category in years to come.
Brands must keep in mind, however, that the Millennial consumer is discerning and there’s a big difference between ethnically inspired and ethnically authentic dishes. Saffron Road, for example, works with passionate chefs who use authentic recipes and respect traditional cooking methods to maintain cultural integrity in all of our meals.
The pandemic also forced us to focus on our health and consumers have come to see the great choices in “Better For You” (BFY) frozen foods that are healthier, have clean labels and provide transparency to the consumer. As a community, the more we champion those BFY values, the stronger the frozen category will become. Retailers and distributors are looking for less-processed, healthier frozen items and not just in entrees -but in everything from ice creams using alternative milks to snacks, appetizers, wraps, entrees and beyond. Natural, organic and high-quality ingredients are the future of frozen.
An unprecedented 30% of our growth over the last year has come from new-to-brand consumers and 70% of growth is from current consumers doubling or tripling their purchases–further evidence that ethnic cuisines and healthier BFY options are at the core of the frozen food revolution.
Now What? We Must Be Nimble, Authentic and Disruptive
With clear consumer demand, brands must become more nimble, quick to innovate–and perhaps even take a cue from smaller, challenger brands.
According to McKinsey’s 2020 report, over 60% of growth over the last decade in the $800 billion food and beverage industry has come from small brands. Why? Startups and challenger brands are the most engaged with the consumer with an understanding of their values and needs, and have the ability to innovate quickly and adapt to the changing landscape. Their focus is on this younger generation who, unlike their parents, are making conscious brand choices based on values rather than solely cost. It’s what we at Saffron Road refer to as “Values for a Value.”
This is a profound change from a decade ago when large CPGs controlled and dominated shelf space and sales.
And the category is starting to witness that super premium, small brands are leading the way. According to IRI’s “The Premium Opportunity” study, smaller premium brands, like Amy’s and Saffron Road, experienced the highest growth within the frozen category last year.
With premium, restaurant quality options that are clean-label, healthy and wholesome as well as bold and delicious in flavor, big brands that are solely focused on being the lowest price may lose share to challenger brands even more in 2022 and beyond. In my professional opinion, to maximize success in 2022, culinary brands need to concentrate on three key pillars: transparency, authenticity, and nimble, disruptive innovation.
The Future of Freezer Aisles
Frozen sales increased 23% in 2020— resulting in a 19.4% increase in spending per buyer. Maintaining trip frequency and the same shopping haul will be key for the future of growth, and I hope that retailers will react opportunistically. They’ll need to expand their frozen space to accommodate demand in years to come. Frozen food shoppers continue to evolve their shopping behaviors: 57% still purchase more frozen foods, 58% purchase different kinds of frozen foods, and 57% are purchasing different brands than they did pre-pandemic.
What does this all mean? The Meta opportunity of the decade. Savvy, forward looking retailers will continue to look for new and emerging challenger brands that offer a diverse culinary selection of ethnic, premium and healthy freezer options. As a leader in the premium frozen space, I implore others in the frozen food sector to help elevate the voice of frozen and share the many attributes of frozen foods by utilizing resources available to us at FrozenAdvantage.org. That’s my call to action for 2022. Carpe Diem!
About the Author
Adnan Durrani is a 30+ year pioneer in the organic food sector. He founded world cuisine brand Saffron Road in 2010, offering the world’s first Halal-certified frozen meals, which can now be found at 25,000+ stores and is the fastest-growing natural/organic frozen entrée brand in the U.S.