The frozen food market flourished because COVID made it impossible for people to cook every meal at home, and they had to worry about whether the grocery store would shut down. Insecure consumers bought frozen pizzas, entrees, and desserts to satisfy their cravings. This drove up demand to an unprecedented level.
According to “Power of Frozen in Retail”, a February 2021 report by the American Frozen Food Institute, the dollar value of frozen foods sales increased 21% and unit sales increased 13.3% last year.
In a press release, Alison Bodor, President/CEO of AFFI stated that the frozen food aisle has been a major growth driver for retailers ever since 2016. It is growing faster than most departments. “Frozen foods are a panademic powerhouse, bringing in $65.1 billion in retail sales by 2020.”
It was also revealed that 57% of consumers still purchased frozen food in 2020. 58% bought different types of frozen food, 58% bought different frozen foods and 57% were buying different brands.
Bryan Le, the author of “150 Food Science Questions Answered”, notes that consumers are cooking more at home and looking for ready-to-eat meals. There is lots of excitement in frozen food.
Rastelli Foods Group is a processor and retailer of meat, poultry, and fish. According to Mike Kelly, the general manager of this company, their e-commerce frozen meat and seafood sales jumped by 150% and sales to retail customers soared more than 200%. However, this increased demand was not without its challenges. Rastelli Foods Group was one of many companies that reported finding it difficult to find frozen supplies and equipment.
Kelly stated that dry ice was difficult to obtain for our direct-to consumer frozen fulfillment center. This is where we depend on dry ice to ship orders across the country. We invested in dry ice production equipment worth $2 million to make dry ice ourselves and less on availability.
Rastelli also added 45,000 sq. Rastelli added 45,000 sq. ft. of production area to make it possible to store frozen products more efficiently.
Kelly states, “We have increased blast freezing capabilities to keep up with ever-changing orders,”
Rastelli Foods Group is not the only one. Many food producers tried to increase their ability freeze food during the pandemic. Many companies that make equipment and supplies for freezing spotted the opportunity and increased their production. They managed to keep the freezers of retailers and pantries stocked.
Frozen Food Equipment Suppliers Under Pressure
Pelton Shepherd was one company that took advantage of the frozen food opportunity. This company makes cold chain technology.
Tim Shepherd, CEO of the company and the grandson of the founder, said that “the pandemic forced us to fasten our seatbelts tighter than ever before.” It was a significant spike. Everyone needed refrigerated and frozen foods more than ever when they had to stay at home. We incorporated our products into this supply chain.
Glacier Ice was one of Pelton Shepherd’s most popular products during COVID. This is a packet of refrigerant which provides +30 degrees F temperature control in an affordable, nontoxic, and noncaustic formulation. Curatemp Pro Gel Ice Refrigerant ensures temperature accuracy at specific points by using a semi-solid, nontoxic gel with neutral pH.
Enviro Ice is a new product that was introduced just before the pandemic. It keeps food frozen, and can be used to make nitrogen-based food products once it has been thawed. Manufacturers of meal kits found Enviro Ice to be a popular part of their TerraTemp line.
Shepherd says that consumers can simply cut open Enviro Ice and pour it onto their plants or gardens. Regular application can result in a 25% increase of color and growth, according to our tests.
Another company that saw a jump in frozen food sales was ingredient supplier Ingredion.
Ron Pagaoa is Ingredion’s senior marketing manager-savory. He says that during the pandemic, home eating surged and there was increased demand for ingredients to make soups, frozen vegetables, and pizza crusts. According to him, the company’s product development team was able to develop products that would help food manufacturers produce better frozen foods.
He says that Ingredion’s food scientist work with customers to find solutions that include gums or other hydrocolloids such as xanthan, guar, and locust bean. These are useful in providing freeze-thaw stabilization in frozen food applications by binding liquid and managing ice crystal formation. These ingredients are great for frozen soups, frozen sauces and frozen ready meals.
We Pack Logistics, which packs food and ships it to manufacturers on a contractual basis, didn’t see an increase in frozen food shipping demand until the beginning of this year. Jeff Edwards, director for opportunity planning and development at We Pack Logistics, says that most of their customers had their frozen food packaging done internally before the pandemic. However, this changed later.
Edwards says that there was a significant increase in RFPs for frozen packaging and that a major customer asked us to change from zero to two shifts within a matter of weeks. I believe the delay in reorganizing repack supply chains may have been due to a level of expectation that normal would return by the end Q1. It looks like normal could still be many months away.”
The majority of food processors manage
Most food processors were able to meet the growing demand for frozen foods with the assistance of companies such as Ingredion, Pelton Shepherd and We Pack Logistics.
Jack Acree is the executive vice president of Saffron Road Foods. He says that his company, which makes frozen entrees like Chicken Pad Thai, Lamb Saag, and Chicken Enchiladas Poblano, has maintained good relationships with its suppliers.
Acree states that “our demand was up 1.5X-2X at times.” “But because we are a smaller company, we can be more flexible and were able work with our supplier to keep all stock in stock throughout. We added new production lines and increased the inventory in our warehouses. It was not an easy decision, but we felt it was a business decision. We also felt a responsibility for good food safety.
South African plant-based food processor Fry Family Food Co. also managed keep its frozen products, such as its vegan quesadillas and burgers, on the shelves.
Tammy Fry is co-founder and global brand leader for the company. We believe that the increased demand was due to the frozen nature of our products and a higher demand for plant-based food.
She continues, “Because our business was considered an essential service company, we were able operate fairly normal and maintain a fairly strong supply chain.” Although we did have some difficulties with import and export, there was tremendous support from the government to ensure that food supplies were not disrupted. Our distribution systems, which were always geared towards frozen goods, were able maintain some degree of normalcy.”
Future demand
As the COVID pandemic recedes, will frozen food sales remain strong? Adrienne Seiling is senior vice president of strategic communication for AFFI and believes that there are signs of continued strength.
She explained that frozen foods are suitable for all meals and that the trend towards working from home will continue post-pandemic. This should ensure that there is a continued demand for quick, convenient meals at home. Online food sales increased by 84% between 2020 and 2021, and frozen foods played a significant role in that growth.
It may just be habit, but it could also explain why frozen foods are so popular. It may be a habit that people who have tried frozen foods more often in the last year will stick with it.
Seiling states that every brand, product, or category can increase its sales in three ways: having more people purchase, having people spend more and having people shop more often. This growth trifecta is what drives frozen food sales gains. Nearly all frozen food categories saw increases in household penetration, trips, and average basket sizes – something not all departments can claim.
This evidence suggests that frozen food processors and companies providing equipment and logistics for frozen food should continue to enjoy strong markets.
Seiling says: “All these signs point towards a bright future in frozen food demand.”
