- The frozen meals segment at grocery stores has stabilized over the past year due to a much-needed revival of Nestle's frozen foods business in the U.S., a top Nestle executive told the Consumer Analyst Group of New York, as reported by Food Business News. Nestle’s sales in the frozen prepared foods category totaled $2.6 billion in 2016.
- Jeff Hamilton, president of the Nestle Food Division at Nestle USA, said changes were made to the business to “better reflect consumer trends.” The food manufacturer, whose frozen brands include Stouffer’s, Lean Cuisine and Buitoni, has expanded its product distribution to new areas, used social media to communicate with the public and moved toward cleaner labels where artificial ingredients are replaced by natural ones.
- Nestle has also introduced new culinary recipes, such as Sweet and Spicy Korean-Style Beef and Mushroom and Spring Pea Risotto, to complement its traditional lineup of lasagna, spaghetti and meatballs, pizza and other dishes. To sustain growth, Nestle must stay “one step ahead” of the latest consumer trends, Hamilton said.
Frozen food sales have declined in recent years as consumers viewed the grocery store staple as highly processed and less healthy. With millennials and other consumers more concerned about what’s in the food they eat and where it comes from rather than pure convenience — a major selling point of frozen food for decades —manufacturers have made significant changes to their lineup of frozen foods to rejuvenate sales.
Those turnaround efforts are showing signs of paying off. Conagra discontinued several of its slower-selling Healthy Choice dinners following a drop in sales, instead focusing more attention on its Café Steamers brand touted as healthy, low-fat and containing crisp vegetables.
Nestle, B&G Foods, Pinnacle Foods, among other companies, also have updated their packaging, changed or reduced the number of ingredients, touted the health and freshness of their ingredients and created more innovative items. B&G relaunched its Green Giant line with new products and an innovative marketing campaign in 2016 that helped improve sales about a year after the iconic brand was acquired, the company said last week.
While frozen food sales have started to improve, and the segment is unlikely to ever go away, the business faces several challenges. Grocery store chains have expanded their offerings to include more fruits, vegetables, meats and fish. Retailers like Wegman’s Food Markets have vast buffet areas where on-the-go consumers can choose from dozens of freshly-made items to take home.
Older consumers who grew up eating Swanson TV dinners are increasingly turning over food-buying decisions to younger shoppers who are raising families and may be more inclined to make their own healthier meals, buy already prepared ones from a store or have a ready-to-prepare meal kit delivered to their door. And as more shoppers buy their food online, frozen foods could be at a disadvantage. Shelf-stable products can ship in traditional boxes, but frozen foods require different packaging and refrigerated delivery systems.