Value rules in freezer
Handheld frozen foods have grown quickly in the last two years, and Mintel expects growth to continue. U.S. retail sales are expected to top $3.8 billion by 2016.
The handheld breakfast segment is powering much of the category’s growth. While handheld breakfast foods comprised 26% of the total market in 2011, U.S. sales of the segment grew an impressive 40% from 2009 to 2011, and helped boost total category sales 7% during that same period. While Mintel expects the breakfast segment to post healthy gains this year, sales are likely to slow to about 10% annually until 2016, a trend that will still outpace the flat overall category growth. Mintel expects total category sales to increase only about 3% to 4% per year from 2012 to 2016.
Price is important to consumers in the handheld frozen segment, so retailers looking to maximize sales need to be sharp on their pricing. According to Mintel’s research, consumers who buy frozen handheld foods are price sensitive and responsive to couponing. A recent study from the market research firm revealed that 63% of consumers who eat frozen handheld food products buy whatever is the best value, and nearly half feel that private label is just as good as branded products.
Frozen snack sales also have been strong, with sales surging more than 20% between 2006 and 2011. Frozen appetizers/snack rolls is the largest segment, owning nearly 96% of the total frozen snacks market share. Innovation drove the category, but has been coming primarily from smaller players. A recent report from Mintel revealed that between 2011 and 2012, the two category leaders, General Mills and Heinz, lost both sales and market share, while Nestlé exhibited the largest increase due to the introduction of Hot Pockets Snackers.
The article above is part of the DSN Category Review Series. For the complete Frozen Food Buy-In Report, including extensive charts, data and more analysis, click here.