Post-Pandemic Frozen Trends: Consumers Invested in Freezer Space, Retailers Are Following Suit

By Anne-Marie Roerink, President, 210 Analytics, LLC

Home-Centric Life Fuels Frozen Food Engagement

Ever since the start of the COVID-19 pandemic, now almost three years ago, food shopping and consumption habits have shifted regularly. But a few key habits appear to be here to stay — including enhanced shopper engagement with frozen food. In March and April of 2020, the frozen food department became one of the biggest contributors to sales growth, and sales continued to be on fire in 2021 and 2022, despite a wide range of supply chain issues. $72.2 billion on fire, to be exact, which is an astounding $19.4 billion increase in frozen food sales at retail between 2018 and 2022. While unit sales have not fully kept pace with the records of 2020, they continue to trend substantially higher than in 2019, the pre-pandemic normal.

Consumers Invested and Are Staying Engaged

The persistent strength in frozen food sales is not surprising. In the 2022 Frozen Fruit and Vegetables study conducted by 210 Analytics on behalf of the American Frozen Food Institute and made possible by Hillphoenix, 29% of consumers shared that they have expanded their freezer capacity since the onset of the pandemic. They bought additional fridge/freezer combos or chest freezers and are not letting their investments go to waste.

Americans are still preparing more meals at home, but life is back to its former hectic self, with an additional layer of complexity with 40-year high inflation. A frequent answer to today’s demands on time and money lies in the frozen food aisles, as evidenced by household engagement with the frozen food department. Virtually all households purchase frozen food at least once a year, at 98.6%. Importantly, they continue to purchase frozen foods much more frequently than pre-pandemic, with trips up 13.1% to 48 trips per year. That means shoppers are now talking a stroll down the frozen food aisle virtually every week, while buying more when there.

Grocery shopping has become a balancing act between money, health and convenience. And as the sales and engagement numbers show, this means frozen foods are poised to enjoy many more years of gains.

  • Prioritizing food waste — With inflation taking a bite out of consumers’ spending power, 81% are looking for money-saving measures, and shelf life is one of them, according to the December IRI primary shopper survey. While most shoppers use both fresh and frozen foods, 77% of consumers in the AFFI study pointed to the short shelf-life of fresh as a contributor to waste. In a market where there is little room for wasting money, dollars have been shifting to frozen as a result.
  • The who — While some departments that are struggling with engaging young consumers have seen below-average growth in response, that is not the case for frozen. Retail data demonstrate that Gen X, Millennials and Gen Z all love frozen food. In fact, Millennials far over-index for categories such as frozen chicken nuggets, snacks, appetizers, fruit and more. As the Millennial generation’s grocery budget is very rapidly increasing as their families grow, this means bright prospects for frozen food.
  • The 360 solution — Across the store, many departments, such as produce, meat, cereal, candy or pasta, service breakfast or dinner or include products that are indulgent or health-focused. But frozen foods provide 360 degrees of product solutions: functional and indulgent products, plus all meal occasions – from breakfast, lunch and dinner to beverages, snacks and desserts. With many more consumers continuing to work from home part or all of the time, frozen foods are stepping in for restaurant and on-the-go meals for breakfast and lunch, in particular.
  • Online growth — Whereas fresh foods under index in e-commerce baskets, consumers do not shy away from buying frozen foods online. While the number of households who buy online plateaued in 2022, the order frequency and trip spend continued to grow. The share of dollars coming from online outlets has grown from 0.9% in 2019 to 2.9% in 2022.
  • Value reigns — Other channel shifts over the past three years also favor frozen. Consumers are spending substantially more of their food dollars in supercenters, such as Walmart, and club stores, such as Costco and Sam’s. As shopping transforms to bigger checkout spend but fewer trips, frozen food plays a prominent role in both increasingly popular retail channels, with the total frozen food dollar shares representing 26.5% for supercenters and 12.6% for club stores, while the share for traditional grocery is at 51.6%.
  • Reputation — Frozen food have always had a positive affordability perception among consumers. But frozen food innovation surrounding health, nutrition, freshness and convenience has caught the eye of consumers as well. Many frozen food brands have leveraged their packaging real estate to educate consumers about on-trend innovations in gluten-free, organic, low-carb, high protein and more.

2022 Frozen Sales Review

While the frozen food department could not avoid the overall 2022 grocery trend of fewer units and volume as consumers managed their budgets by buying less, the comparison to the pre-pandemic normal shows resilience.

In 2022, frozen food sales increased 8.6% to reach $72.2 billion. Unit sales were down year-on-year, but remained 5% above the pre-pandemic levels — showcasing that much of the additional pandemic demand is holding. This is particularly true for frozen processed meat (such as chicken nuggets and sausage), frozen snacks and seafood, which are all up double digits in unit sales when compared to 2019.

Retailers Are Responding

As a frequent guest speaker and moderator at industry events, I repeatedly hear retailers refer to frozen food as an area of investment in new store openings and remodels, with comments such as “doubling down on frozen food.” Smaller freezers are popping up in secondary locations, such as end caps, integrated in the fresh food departments and even at checkout. In Europe, frozen food offerings are evolving to include bulk self-serve. Packaging innovations further add to the sustainable nature of frozen food.

Between the industry innovation, consumer demand and the retailer response, the crystal ball for frozen food sales in 2023 is bright.

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