Many consumers are looking for the convenience of frozen foods along with the advantages of healthy eating.
Frozen foods have always been associated with convenience. Until recently, associating them with healthiness and taste has been a different story. However, flavor and ingredient enhancements mean consumers can now find made-from-scratch taste and quality in many better-for-you frozen options, ranging from entrées, side dishes and desserts to snacks and even fruit.
As taste has improved, so have sales. For example, the frozen entrée segment has seen double-digit growth in the grocery channel this past year. Many industry observers say additional growth is anticipated.
“It has been a ‘bullish’ year for frozen foods and retailers are responding by creating more space for these items,” says Gordon Hagedorn, vice president of sales for Cedarlane Natural Foods, based in Carson, Calif. “Consumers look at the value gained from their purchases based on quality, quantity and originality. Retailers and suppliers who deliver on this will grow sales in the category.”
This year, Cedarlane launched six items under the CedarLEAN product line. Hagedorn says the company focused on offering items that would extend and complement its current alternative breakfast offerings. “For breakfast, consumers can now enjoy any of our three, 6-ounce gluten-free CedarLEAN Egg White Frittatas including Broccoli & Cheddar, Roasted Chile & Cheese, or Spinach & Roasted Tomato.”
The company has also created a new lunch segment for the natural frozen category. Included in their new lunch lineup are three 9-ounce internationally-inspired vegetarian soup and sandwich wrap combinations: Minestrone Soup with a Mediterranean Vegetable Wrap, Butternut Squash Soup & Quinoa Wrap, and Lentil Vegetable Soup with Samosa Wrap.
“We set out to exceed consumers’ expectations with these items by giving them some great tasting, unique meal options that deliver on flavor, but also help people meet their health and nutritional goals,” says Hagedorn. He adds that all CedarLEAN items are low in calories, fat, sodium, sugar and cholesterol while high in protein and fiber. “These are all-natural, vegetarian meals that can be purchased for under $4 (Frittatas) or under $6 (Soup & Wraps).”
One supplier that has reaped the benefits is Crave Foods. According to Riaz Surti, president of the Los Angeles-based maker of gluten-free frozen pies, the company experienced double-digit growth this year. Surti says the two key drivers behind the company’s growth are product appeal and price. “We manufacture great tasting gluten-free products that sell for the same price as traditional pies,” he says. “As a result of this type of innovation in the frozen segment we expect to see growth for years, especially within gluten-free.”
Crave Foods has launched 10 gluten-free sweet and savory pie offerings ranging from apple and cheesecake to pecan pie. Additionally, the company has introduced an 11-ounce chicken pot pie. “One of the main ingredients in our products is garbanzo flour, which not only delivers protein and is less fattening, it makes for a great flakey crust,” says Surti.
He says skinning and dicing their own produce to make their filling is one of the secrets behind their homemade taste. “We make our pies from crust to filling in our own certified gluten-free facility,” says Surti. “I feel sad that Americans are getting sicker and heavier because lack of innovation by companies who have been market leaders, but produce allegedly healthy products with ingredients that look like they come from a pharmaceutical lab.”
Consumers are also looking to take-in less sugar. Surti says Crave Foods is currently exploring natural and alternative low sugar options that deliver good taste without the negative consequences of traditional sugar.
Peter Sartorio, vice president of San Francisco-based ADF Foods, maker of PJ’s Organics, says the better-for-you frozen foods category is performing well this year, mainly due to the number of consumers who are looking for convenient, healthy food that is reasonably priced. “The frozen category has changed tremendously within the past 10 to 15 years,” says Sartorio. “The quality of food has grown significantly which has driven more consumers to buy frozen products.” Sartorio adds that consumers seem more willing to spend that extra 15% or 20% for organic and non-GMO food for their families. “People care about buying healthy food for their families and are turning to better-for-you frozen foods as a solution,” he says.
PJ’s Organics offers a line of hand rolled burritos in six varieties ranging from breakfast burritos to vegan options. “Although PJ’s Organics does not target specific diets, we aim to provide delicious and healthy, organic food for families. Five years ago, we began using clean, certified organic, Non-GMO Project Verified, and humanely raised ingredients which set us apart from our competitors,” says Sartorio.
Some observers say the growth in organic, gluten-free, dairy-free, non-GMO and other better-for-you segments has been unprecedented this year. They attribute that to the increasing number of consumers who are discovering there are food options available to address their food allergies. Others say consumers are beginning to realize that eating organic, non-GMO, and raw foods is much healthier for their body. This has led to a tremendous increase in interest across a wide variety of categories in better-for-you pizza, pasta, and other frozen entrée items.
“Many consumers see that eating these types of foods makes their bodies feel that much healthier and as more consumers learn that they have sensitivities to ingredients in frozen foods such as wheat, dairy, egg and nuts, they are turning to healthier options,” says Aaron Greenwald, president and founder of BOLD Organics, based in New York. He adds that the attention given to food allergies by media and Internet groups has greatly expanded awareness of allergen intolerance and also organic and non-GMO foods. “That is why you have had brands such as BOLD creating frozen pizzas that are not only made with organic certified and non-GMO ingredients, but that also target the consumer that can’t have gluten, dairy, egg or nuts,” he says.
BOLD frozen pizzas are gluten-free, dairy-free, made with organic certified, and non-GMO ingredients. Greenwald says feedback from consumers and retailers has been positive. “We saw an opportunity to offer consumers the best taste, best quality and best value organic, non-GMO, and allergen-free products, and frozen pizzas were the perfect place to launch since there really wasn’t anything out there that met the taste consumers have come to expect from a pizza,” says Greenwald. Company officials have already announced plans to introduce a number of new frozen pizzas and entrees in 2013.
Earthbound Farm, best known for its full line of fresh organic produce, has recently expanded its offerings to include a line of frozen organic fruits and vegetables. Craig Hope, chief customer officer for the San Juan Bautista, Calif.-based company, says retailers have been very excited about the line, especially with some of the more unusual items like snap peas, butternut squash and dark sweet cherries. “We are invigorating a fairly flat category, bringing fresh organic produce appeal and a recognized, trusted brand in organic,” says Hope. “Consumers are excited to see a trusted brand like Earthbound Farm in the freezer case.”
While overall category growth is being driven by private label, Earthbound Farm is bucking this trend and officials say they are seeing exceptional growth in the early stages of distribution. “We are achieving all of our early targets in a supply constrained category and believe our sustainable model will drive more than great product value to the retailers and shoppers given that we grow many of the core fruit and vegetable SKUs ourselves,” says Hope. He expects in short time to close price gaps in this segment just as has been the case with organic packaged salads.
Hope says what makes Earthbound Farm’s line of organic frozen fruits and vegetables different is that every ingredient comes from Earthbound Farm. “We have earned credibility with consumers in our 28 years bringing fresh fruits and vegetables to market and consumers really trust that our frozen line will share the same commitment to quality that our fresh line has,” he says. The company has also stirred things up a bit with its packaging appeal and recloseable bag. “We also know that produce is the highest traffic area of retail. Earthbound is creating cross-merchandising solutions to help direct this shopper traffic toward the frozen foods aisle.”
While many retailers across the U.S. do a good job merchandising the natural frozen category, Hagedorn says a common mistake that continues to be made is with product variety. “The assortment in frozen entrées and breakfast sub-categories in particular, is limited to the top two selling brands with no space dedicated to new and emerging products,” he says. “Correct this oversight and sales will rise.”
Observers also firmly believe that the plethora of competition will force supermarkets to think more creatively in terms of marketing, product selection, and most of all adjusting to the consumer trends like gluten-free. “Partnering with credible companies is critical,” says Surti. While the competition sometimes resorts to marketing ploys in creating their products, Surti says his company uses simple, readable ingredients without preservatives and additives. “The company that innovates will come out on top. There is no one in the industry that makes its own pie like we do that is why retailers and consumers are raving.”
Greenwald says that while overall supermarkets are doing a much better job with merchandising the category, a battle currently exists over whether products should be housed in their own dedicated “better-for-you” area or integrated with conventional frozen foods. Pizza is at the heart of this debate.
“Clearly, there are arguments to be made for both separating and integrating these products with conventional choices, but the mistake some supermarket retailers make is once they choose to integrate, they often forget that the sales for a ‘better-for-you’ item won’t match up to the conventional products,” he says. This, he adds, prevents additional promotion and marketing of the category, which, while growing at a fast rate, can still benefit from marketing assistance. “The stores that are succeeding in this category are the ones who have developed successful tagging programs, calling out gluten-free and non-GMO foods with clear signage,” he says.
Earthbound Farm’s Hope says some of the mistakes supermarket retailers are making when merchandising the category include the failure to provide a range of sizing options, dedicating an overabundance of space to legacy categories such as whipped topping and juice concentrates, and promoting competing brands in tandem or during demand troughs. “I’d say we are at what I’d call the tipping point in organic frozen fruit and vegetables, similar to what the industry experienced with packaged salads,” says Hope. He adds that consumer trends will continue to drive incremental space expansion to organic frozen SKUs. “Shopping basket rings can be 60% larger or more with Earthbound Farm branded products in the grocery cart. This is a really exciting time in the category and we need to help the shoppers see and build loyalty early at the retail point of purchase.”