Retail frozen food sales in the United States have been more or less flat in recent years, with 2012 dollar volume estimated at $44 billion across all retail channels representing a slim 0.4% gain over 2011, according to a new study from research publisher Packaged Facts.
Category dollar sales grew by just 7.7% between 2008 and 2012, a compound annual growth rate (of 1.9%, according to the report, Frozen Foods in the U.S. SymphonyIRI food/mass/drug retail channels (excluding Walmart) data for the 52 weeks ended June 10, 2012 showed total-category dollar sales up just 0.3%, to $26.2 billion, with center-plate sales (the largest classification) down 0.6%, and other classifications showing modest gains ranging from 1.1% for vegetables, appetizers/snacks and sides to 4% for desserts.
But all four classifications experienced unit/volume declines, and total-category volume declines 5.1% -- meaning that much of the dollar growth was driven by inflation and price increases, rather than unit growth, points out the report.
Further, over the next five years, Packaged Facts projects total-category compound growth of just two percent. Numerous factors are said to be contributing to the stagnation, including slow economic recovery; changing consumer eating patterns, shopping patterns and demographics; lack of excitement in frozen foods categories and merchandising; retailers increasing focus on the fresh-foods perimeter areas of their stores to the detriment of frozen foods and other center-store categories; and competition from fresh foods (including prepared fresh foods), shelf-stable foods, and restaurants.
Consumers growing preference for fresh foods is the core challenge. According to an August 2012 national online survey by Packaged Facts, a preference for fresh foods is the top reason (57%) shoppers cite for not buying frozen foods in the last three months, followed by a preference for home-cooked foods (35%). In contrast, fewer than one in five shoppers said that they have not bought frozen foods because they dont like the taste, dont have enough freezer space at home, are not confident in frozen foods nutrition, or are not confident in frozen foods' quality. (The last concern is notably more prevalent among women, however.)
