Dive Brief:
- Pinnacle Foods is continuing to expand its Birds Eye frozen vegetable line with the $37.5 million purchase of a frozen warehouse and vegetable packaging facility in Wisconsin, reports Food Business News.
- In a U.S. Securities and Exchange Commission filing, the company stated “the facility is expected to drive productivity and margin enhancement, consistent with the network optimization initiatives in Pinnacle Foods’ long-term strategic plan.”
- The company’s Birds Eye brand recorded double-digit sales growth in the recently completed second quarter. Pinnacle has recently focused on reinvigorating its frozen vegetables segment, and it has been one of the company’s biggest profit drivers.
Dive Insight:
Frozen vegetables are experiencing somewhat of a resurgence. Stalwart brands — Pinnacle’s Birds Eye, among them — are tapping innovations in ingredients, flavors and packaging with a focus on today's definition of health. They're driving that focus home with marketing messages that distinguish new offerings from former perceptions of frozen foods — and their brands.
According to the Center for Disease Control, nine out of 10 Americans don’t eat enough vegetables. At the same time, 65% of consumers are actively seeking to increase their vegetable consumption, according to NPD data presented at Pinnacle’s 2016 year-end investor event. Allied Market Research has estimated the global frozen foods industry will grow at a compound rate of 4.1% annually to reach an estimated total market size of $306 billion 2020.
Pinnacle is positioning Birds Eye to capture its share of that growth. This means investing in product innovation and infrastructure improvements, including expanding warehouse and packaging capacity, to reach more consumers and satisfy unmet demand. Some efforts underway to extend Birds Eye's reach include new family-size packaging, targeting new occasions for vegetable consumption and retail channel expansion.
Birds Eye also is viewed as a key cog in Pinnacle’s health and wellness agenda. The renewed growth and emphasis on frozen vegetables as part of a healthy diet regime means Pinnacle and its frozen foods competitors may need increased production capacity to handle the demand. Investing in its manufacturing network, such as by buying the frozen vegetable facility in Wisconsin, mirros Pinnacle’s long-term strategic goals and plans for Birds Eye.
At its year-end investor event, Pinnacle reported that Birds Eye performed at a record pace in 2016, which included both sales and market share gains. If its Q2 performance is any indication, momentum isn't letting up in 2017.