Frozen food used to have a bit of an image problem. Seen as cheap and low quality back in the day, these foods are now getting a massive makeover as consumers rediscover their convenience amidst food supply and cost crises. This is rapidly becoming a sizzler of a category!

The many faces of frozen foods

Every year, the Gurunavi Research Institute in Japan, which runs an online restaurant search site, reveals the dish of the year. For 2022, the dish of the year was… frozen food.

Frozen gourmet is the food of the year for 2022

• This choice was linked to how the pandemic changed consumer behavior. Japanese consumers shifted from buying fresh ingredients daily to less perishable frozen foods to cut down daily shopping and because of the convenience they offered. 

• According to Japan’s Ministry of Internal Affairs, the average amount of money spent on frozen food per family went up 20% during 2019-21. 

• Frozen food has become so popular that grocery chains are investing quite a bit to expand this section. 

• Aeon Supermarket in Japan, for example, opened a new format of stores called @Frozen, which sells only frozen food and has over 2,000 items. 

In the UK, the reliance on frozen food went up during the pandemic, and it continued to grow as the cost of living crisis replaced the COVID crisis. 

• High food inflation, high energy prices, and a shortage of fresh vegetables due to inclement weather has contributed to consumers looking to save where they can. And frozen foods have emerged a winner in this regard. 

• Kantar data indicated that frozen food performed better than fresh food at supermarkets. In the 12 weeks to mid-March 2023, total grocery volume sales declined by 4% but the volume of frozen food remained the same. 

• The strongest demand was for frozen chicken, which saw a 5.9% increase in volumes, while frozen prepared food was up by 2.6%, while more indulgent items (ice cream, confectionery) saw a dip in sales.

• Deals on frozen foods have gone up to help consumers on a budget, with supermarkets even competing with one another over promos within this segment. 

In the US, consumers have started to go back to work and school but they still prefer to eat at home. 

• Vericast data showed that 44% of US consumers were eating at home to reduce their spending, and many have turned to frozen food to make quick and convenient meals for their families. 

• Frozen breakfasts in particular have become popular to help consumers beat the morning rush.

• At the same time, rising food prices have had an impact on the market. Frozen food sales went up by 7.9% in the year to mid- 2023 but unit sales fell by almost 5%, based on research by FMI – The Food Industry Association and the American Frozen Food Institute. 

You’d think these little spikes were a flash in the pan, an anomaly from an unpredictable calamity. But all indicators point to the continued growth of the frozen foods segment in the coming years. In some markets, consumers are buying more freezers to store larger quantities of frozen foods, which has even had a positive impact on the freezer market. 

In emerging markets in Asia, the frozen food sector is still not as widespread as it is in developed countries since the cold chain infrastructure isn’t as well-developed. However, this is changing in urban areas across the as consumers want greater convenience when it comes to planning and executing meals amid busy schedules. Younger consumers especially are driving this change in behavior. There is also a lot of investment pouring into enhancing the infrastructure needed. 

According to estimates by Mordor Intelligence, the ASEAN cold chain logistics market was worth US$8.3 billion in 2023 and is expected to reach US$12.7 billion by 2028, at a CAGR of 8.8% during this period. 

Key drivers 

According to 360iResearch, the global frozen food market is expected to grow from US$261.5 billion in 2023 to US$472.8 billion by 2030, at a CAGR of 8.82%. And in the coming years, consumers are expected to buy a lot more frozen products across different food categories. 

I reached out to Hugo Delforge, who is part of the GourmetPro collective and an expert on frozen foods. He anticipates continuous growth for the frozen food sector in the coming years and said that this growth is attributed to a range of interconnected factors that are shaping the industry’s evolution. Hugo highlighted a few main drivers for the growth within the consumer market.

Consequences of Covid-19

The lingering consequences of the pandemic have had a profound and lasting effect on consumer behavior. One significant driver for the continuous growth in the frozen food sector is the fear of lockdowns. With the enduring uncertainty of the pandemic, consumers are seeking safe and reliable food options that can be stored for extended periods. Frozen foods, with their long shelf life, provide a reassuring solution for consumers, giving them a sense of security in times of unpredictability.

Rise of online shopping and safe logistics

The surge in online shopping and the availability of secure logistics and delivery services are further boosting the frozen food industry. Consumers can now conveniently order a wide range of frozen products online and have them delivered to their doorstep. The reliability and safety of these delivery methods make frozen foods an appealing choice for individuals with busy lifestyles, contributing to the industry’s upward trajectory.

Increase in women’s employment

The increasing participation of women in the workforce is driving the demand for time-efficient meal solutions. With busy schedules and the reduced time available for preparing family meals, there is a growing need for nutritious and easy-to-prepare options. Frozen foods, with their variety and quick preparation, are well-positioned to meet this demand and provide a practical solution for individuals and families looking for convenient, yet wholesome, meal choices.

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The frozen comeback

Frozen food hasn’t always had the best reputation. In developed markets, it was seen as cheap and lonely (TV dinners for one), highly processed and unhealthy (high levels of sodium and preservatives). Concerns over the quality of the food also scared consumers away. And as consumers started to conflate “fresh” with “healthy”, frozen food in the daily meal context sort of took a backseat in the shopping basket. 

But all of that started to change a few years ago, even before the pandemic forced people into a panic-buying frenzy. In the US, for example, frozen food sales saw positive growth for the first time in five years in 2018 – a 1% increase for the 12 weeks to 10 March. Frozen meals and appetizers, which account for a third (35%) of the category, grew by 3% in sales, the highest in five years. 

This renewed interest was driven by a few reasons:

• Manufacturers started to respond to consumers’ demands for healthier, convenient, and easy-to-make meals of better quality. 

• They also catered to specific lifestyle and dietary requirements, such as gluten-free, high-protein, vegan, and so on. The foods started to get on-trend.

• The greater use of quick-freeze technology also helped as this technique is better at keeping nutrients and flavor locked into the products.

• Better packaging, branding, and communication has helped too.

There is also greater awareness of the benefits of frozen foods among consumers and the convenience of quick and easy meal prep is an incredibly appealing proposition for time-pressed consumers. 

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In developed markets, frozen foods are seeing a revival, but the category is just starting to take off in developing markets. For regions that don’t have a reliable cold chain or electricity supply, it’s easy to see how consumers would not be comfortable buying food that could have thawed and refrozen multiple times. Many of these countries have a strong tradition of fresh food from scratch, which itself can be a difficult habit to change.

In addition, frozen foods can be perceived to be expensive compared to fresh at first glance, when consumers don’t think of the combined costs of the different aspects to packaged food.

There are attempts to change this, though. One way in which this is happening is through smaller packs, a model that could be replicated in other parts of the world that are both price sensitive and have a still emerging frozen food market.

But attitudes are changing towards frozen foods. Hugo highlighted how rapid urbanization of developing nations around the world is also transforming the way people live and eat. As urban populations grow, more individuals have access to modern conveniences, such as larger freezers and access to well-stocked supermarkets. Urban residents lead busier lives and seek time-saving meal solutions, making frozen foods an attractive option. This urban shift is expanding the consumer base for frozen food products and contributing to their continuous growth.

While frozen food is regaining its stature among consumers, manufacturers in the frozen food industry face a significant challenge in striking the right balance between providing healthy and safe products while also offering convenient and visually appealing options, cautions Hugo. “Consumers increasingly seek products with no additives, coloring, or genetically modified organisms (GMOs) to address health concerns. However, it’s equally important to ensure these products have an extended shelf life and an attractive presentation. Achieving this balance demands ongoing research and development efforts, innovative packaging solutions, and strict quality control measures to meet both health and convenience expectations,” he adds.

Emerging opportunities

Meals for seniors

In Japan, another point in favor of frozen foods winning “dish of the year” is its popularity with seniors. Products like prepared meals have proven to be a boon for the elderly population, many of whom live alone and find it difficult to assemble ingredients and cook for themselves. The products also come in set sizes and in easy-to-use trays that make it easy for the seniors to manage portions and heat the food.

Globally, our population is aging rapidly. In fact, the share of people over the age of 65 is growing at a faster rate than those below that age. The share of over-65s is expected to rise from 10% in 2022 to 16% in 2050, according to the United Nations. By 2050, the number of individuals over the age of 65 years is projected to be twice the number of children under the age of 5.

Many older consumers often have to manage chronic health conditions. Safe, convenient, and wholesome frozen meals in set portions addressing specific nutritional needs hold a lot of potential to address the needs of these consumers. Frozen foods retain much of their nutritional value, so these could potentially be stored for long periods of time and still offer the same benefits. As such, frozen foods have the potential to relieve a lot of the stress associated with meal planning and preparation for seniors.

A sustainable solution

Consumers are increasingly seeing frozen food as a solution to cutting down food waste, which makes it an important player in the sustainability discussion.  

• A study by Advantage Solutions of 1,000 US grocery shoppers found that consumers still have rather mixed feelings about frozen foods. However, 43% said they saw frozen foods as less wasteful than fresh food, while less than 20% said they are more wasteful. 

• According to the British Food Federation, an estimated 4.5 million tonnes of edible food is thrown away annually in the UK. Every tonne of food waste is responsible for 4.5 tonnes of CO2. Frozen food, with its longer shelf life, can help mitigate some of the impact of food waste on the environment.

• Studies have shown that consumers waste a lot more fresh food than frozen food Frozen foods result in 47% less household food waste compared to fresh food. The total food that is lost and wasted accounts for 38% of total energy usage in the global food system. 

Access to dishes from around the world

Frozen food also allows consumers to taste new dishes from around the world, especially dishes they might find difficult to replicate at home. These dishes may also be too expensive in restaurants or just not be accessible where they live. This allows for greater experimentation for consumers who are today very interested in trying out new dishes and flavors. Aeon’s @Frozen allows for this by highlighting cuisines from different parts of the world and from within Japan.  

Frozen foods from different parts of the world

Want more store photos from different markets?

Frozen foods from different parts of Japan. The text in the center of the glass panes (where the red arrows are pointing) are specific regions within the country. The graphic on the top of the fridge shows the rail network and select tourist attractions.

And just as a parting gift, here’s an interesting little nugget to ponder over:

Want to leverage Hugo’s expertise and explore opportunities within frozen foods?

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