Nestle USA revives its frozen foods business

by Josh Sosland
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Nestle has revived its frozen foods business.

BOCA RATON, Fla. — The frozen meals category has stabilized over the past year due to a revival of the Nestle USA frozen foods business, said Jeff Hamilton, president of the Nestle Food Division, Nestle USA. In a Feb. 23 presentation, Hamilton described steps the company has taken to reinvigorate the frozen foods business and what will be required to sustain the success.

Hamilton addressed the Consumer Analyst Group of New York at the Boca Raton Resort and Club in Boca Raton, Florida.

Jeff Hamilton, president of the Nestle Food Division, Nestle USA

With annual sales of $27 billion, the US market is Nestle’s largest globally, Hamilton said. The United States accounts for 30 percent of Nestle revenues.

He listed the many large categories in which the company participates in the United States, including pet food ($26.6 billion), confections ($20.2 billion), frozen food ($17.4 billion), water ($8.4 billion), ice cream ($10.1 billion), baby food ($8.4 billion) and coffee and creamers ($3.7 billion). Nestle holds the No. 1 position in each of the categories, except confections (No. 4).

Hamilton devoted most of his remarks to the frozen prepared foods category, noting that the company’s sales at retail totaled $2.6 billion in 2016, of which Stouffer’s accounted for 60 percent, Lean Cuisine for 30 percent and Buitoni, 10 percent.

Between 2010 and 2014, frozen foods category sales declined to $7,107 million from $7,919 million, equating to a compound annual rate of sales decline of 2.7 percent.

In Nestle's frozen category, Stouffer's accounted for 60 percent of sales, Lean Cuisine for 30 percent and Buitoni 10 percent.

Hamilton joined the business in April 2014, and he said at the time the category needed “bold change.”

To reverse the decline, Nestle made numerous changes to “better reflect consumer trends,” Hamilton said. These included reformulations with an aim toward cleaner labels, extending distribution to new geographic territories and leveraging digital and social media “to communicate more effectively.”

“Stouffer’s was pretty stable during the downturn of the category, but we thought there were opportunities for growth,” Hamilton said. Toward that end, Nestle reformulated Stouffer’s meat and sauce lasagna, reducing the ingredient list to 35 words from 83.

“Also important are the ingredients that go into the lasagna,” Hamilton said. “They are very similar to what you would use to make a lasagna at home.

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