Frozen foods segment is thawed out

by Monica Watrous
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ROCKVILLE, MD. — After several years of declining sales, the frozen foods segment is expected to climb from $22 billion in 2014 to $23 billion in 2019, said Packaged Facts, a Rockville-based market research firm.

New natural and organic innovations are adding appeal to a category previously plagued by negative perceptions of quality, taste and healthfulness. Sales of frozen dinners, snacks, side dishes and pizzas were just over $22 billion in 2013, down about 1% from 2012. Sales in 2012 slid 1% from 2011. In addition to concerns over nutrition, the category has been challenged by increased availability of ready-to-eat and heat-and-eat meals created daily in grocery stores that offer the same convenience but with a fresher appearance.

“Frozen foods of all kinds have been challenged in recent years as a result of the convergence of several trends, especially, but not exclusively, a growing demand for fresh products or, at least, fresher products in refrigerated rather than frozen form,” said David Sprinkle, research director for Packaged Facts. “Nevertheless, frozen food products still have much to offer. For instance, frozen products identified as natural or organic are having a more positive experience than frozen foods in general.”

Brands such as Luvo, Amy’s Kitchen, Annie’s and EVOL have reenergized the category with products positioned as premium and ingredients perceived as natural.

Luvo's frozen entrees are packaged in parchment paper pouches, which evenly steam-cooks the meal.

With such varieties as kale ricotta ravioli, red-wine braised beef and polenta, and a frittata with sweet potato mango hash, Atlanta-based Luvo’s frozen entrees are packaged in parchment paper pouches, which evenly steam-cooks the meal. Using herbs and spices to enhance flavor with minimal salt, sugar and fat, the meals contain about 220 to 500 calories and less than 500 mg of sodium.

EVOL was acquired by Boulder Brands in 2013.

EVOL, Boulder, Colo., which was acquired by Boulder Brands in 2013, manufactures a variety of frozen food products, including burritos, quesadillas, entrees, bowls and skillet meals. The brand has positioned itself as a food processor serving the simple, clean label market.

All of Amy's frozen products contain no hydrogenated fats, meat, fish, shellfish, poultry, eggs or peanuts.

Amy’s Kitchen, a Petaluma, Calif.-based privately held maker of organic meals and snacks, uses certified organic ingredients sourced from organic farms near the company’s production plants in California and Oregon. The products are Non-GMO Project verified and contain no hydrogenated fats, meat, fish, shellfish, poultry, eggs or peanuts. The company recently purchased a former Heinz plant in Idaho to expand its kitchen operations to support robust growth.

Annie's frozen products contain no artificial flavors, synthetic colors and preservatives.

And Annie’s, Berkeley, Calif., which was acquired by General Mills last October, makes frozen snacks, entrees and pizzas without artificial flavors, synthetic colors and preservatives regularly used in many conventional packaged foods. Additionally, Annie’s sources ingredients so as to avoid synthetic growth hormones and bioengineered food ingredients.

“These organic and natural frozen foods appeal to the consumer who is both cost-conscious and health-conscious,” Mr. Sprinkle said.

Aside from more natural and organic options, Packaged Facts said increased sales of frozen foods also will depend on greater variety and better pricing.
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