Frozen food may not be one of the biggest categories for many wholesalers, and in the retail sector it’s sales growth is failing to even keep up with inflation, but in foodservice at least it is showing encouraging growth. According to British Frozen Food Federation (BFFF) figures, the retail market for frozen has risen by 1.3% in value in the past year, to be worth around £4bn.
Frozen food in foodservice is estimated to be worth around £3bn. The BFFF concedes that the foodservice sector is short of statistics, but trade estimates indicate that frozen is growing by about 4% in value and 5% in volume.
Growth in retail has been scuppered by the grocery multiples and their deep price cuts and persistent use of ‘buy one get one frees’. Indeed the BFFF estimates that more than 50% of all retail frozen foods are sold on discount, with the majority of the deep discounts on branded products. Birds Eye is brand leader in frozen foods and has a 30% brand share in convenience/ independent outlets. About 10% of these sales are through cash and carries but with the importance of keeping the cold chain intact it is perhaps not surprising that the remainder are through delivered wholesalers, who with their temperature controlled vehicles have an obvious advantage when transporting frozen goods.
Mike Doole, trading director of Birds Eye’s parent Unilever Ice Cream Frozen Foods, admits that it’s a difficult time for frozen food but says although the market is generally flat independents are reporting 1.5% growth. And he reckons there’s potential for much more growth. His optimism surrounds Birds Eye’s 10 to target range. These top 10 lines represent 13% of all frozen food sales in the convenience sector. They are: Birds Eye Roast Chicken Dinner; Birds Eye Roast Beef Dinner; Birds Eye Chicken Curry with Rice; Birds Eye Lasagne; Captain Birds Eye 10 Fish Fingers, 100% Cod Fillet; Captain Birds Eye 15 Chicken Dippers; Birds Eye 2 Crispy Chicken; Birds Eye 4 Original Best Beef Burgers with Fresh Onion; Birds Eye Garden Peas 454g; and Viennetta.
These lines are only in distribution to 50% of c-stores so there lies the growth opportunity. Doole says most wholesalers stock them but c-store retailers are still heavily influenced by what’s on promotion at their wholesalers. “Their focus is often on the percentage margin and cheaper lines rather than the rate of sale and cash margin. The assumption is that if it’s a price-marked pack, even if it’s a tertiary brand, it will make a poor seller sell better. Too many independents are distracted by tertiary brands – and to me they’re just cabinet cloggers.” He says a key issue for independents is lack of space and where space is so limited a really disciplined approach to ranging is necessary.
However it’s not all bad news as Doole reports fresh interest in frozen food as the gloss is coming off chilled. “We’ve seen a lot of growth in chilled but that seems to be falling away now. There are complexities in chilled such as waste but the bottom line is profit and it’s easy to forget that when a category is experiencing double digit growth.”
Doole reckons independents can do particularly well with frozen fish, vegetables and meat because chilled versions are not always available. He says fish continues to perform strongly and frozen vegetables are in good growth – with sales up 7% in convenience, which comes primarily from peas. In frozen poultry the market is down but Birds Eye’s share is up as consumers seem to be moving back from own label to brands for reassurance.
Unilever is working closely with retailers and wholesalers to get frozen food sales moving. Its Project Bird is just one example. This is a telemarketing and direct mail campaign to 8,000 retailers, offering them ranging advice in a bid to improve the distribution and availability of Birds Eye’s best sellers.
Doole says: “We started this last year, giving retailers vouchers for stocking our range. This year they get a discount off their invoice. The discounts are relayed direct to their wholesaler of choice which means we’ve put the benefit directly back to the wholesaler supply chain.”
Alf Carr, director general of the BFFF, says the frozen foodservice sector is much more vibrant than retail. “There is much more innovation in terms of recipe formulation, but also in terms of enhanced re-generation (cooking), utility of packaging and in suitability for high capacity microwave cooking.
“Price pressures in the retail sector are making it difficult for smaller manufacturers to afford to innovate and promote their brands. This leads them to produce more own-label products. This means that most of the innovation in retail is being carried out by the bigger branded producers but the majority of innovation seems more directed to product enhancement than to really revolutionary recipe formulations. There is still too much concentration on price resulting in a hindrance, rather than a barrier, to classic innovation in the retail sector.”
Carr says standards in frozen food for foodservice have improved enormously over the past five years: “Traditionally wholesalers saw themselves as just selling product but they are now are much more involved in product development. They are producing products to clients’ own recipes and employing nutritionalists and development chefs. As a result quality and innovation is at the highest level it’s ever been. Caterers want to save on labour and costs so if products are of a good quality then they’ll get used as they take the labour out of the kitchen. Frozen food is easier to handle than chilled and it gives chefs a chance to offer more variety on their menus.”
Brakes recently won the BFFF catering award of 2005 – for smoked salmon blinis. This is a product that Carr says would have been very complicated to produce from scratch. Judges commended the ‘thaw and serve’ product for its good portion control and vibrant look. The blinis are simply removed from the packaging and defrosted in a refrigerator for two hours.
Carr says: “Once again, Brakes has demonstrated an ability to put themselves in the shoes of the catering end user by presenting them with a superb quality product with that touch of difference, using all the benefits of the freezing process to supply something very special. One of the catering judges has ordered already.”
There is one final factor in favour of frozen food, says Carr. With food safety so important nowadays, it is a very safe food, with the microbiology stopping the minute the product is frozen.
Debra Cockram, trading controller, Landmark
Frozen food is extremely important to caterers, particularly in de-skilled operations. As labour costs increase, staff are often the most expensive element in a catering business and frozen products, which only require passing through a microwave or fryer, can save on skilled personnel. Also, there is automatic portion control with ready meals and wastage is kept to a minimum, with only the required amount being prepared for each order.
For the qualified chef, frozen foods also provide some of the basic ingredients for cooking from scratch and can be used to supplement a home cooked menu. We are looking at our ranging to provide a more comprehensive offering for caterers as we see this area as a major growth opportunity.
Chris Beckingham, foodservice trading controller for Today’s
The launch of our one-stop-shop consolidation service has been one of the cornerstones of our foodservice strategy. A number of our members are already experts in this area but for those wanting to enter the market or grow from a low base, it has been of great benefit. At present about 12 members are regularly ordering from the scheme and another dozen members are expected to join over the next 12 months or so.
We have been surprised at the sales pattern to date. For example, at the onset we anticipated that chips would be the biggest selling line but in actual fact it has turned out to be ice cubes.
As new members come on board, each with a slightly different customer profile and consequently different demands, the order pattern changes but we can accommodate most requirements. Where members need certain products adding and feel confident of a reasonable demand we have been pleased to add them. Conversely we have had to cull a few of the slower selling lines to avoid unnecessary costs.
Unilever Ice Cream Frozen Food is investing £2.5m in an overhaul of its Birds Eye curries, traditional meals and roast dinners. The relaunch brings in clearer packaging and nutritious ingredients and aims to offer consumers better value for money.
For foodservice, Aviko has launched skin-on fries – 10mm fries that are topped and tailed with crunchy potato skin. Meanwhile the company’s Mega Wedges scooped Silver at the BFFF awards in the catering sector for Best New Accompaniment/Potato/Vegetable Product.
While the frozen ready meals category as a whole has been declining, the healthy frozen ready meals sector has continued to out-perform standard meals in both volume and value growth. Weight Watchers from Heinz had a strong performance in 2004 and kicked off 2005 with a range refreshment. More product innovation is planned for October, with a brand promise to “better meet the needs of the dieting consumer”. A new strategy will involve new recipes, a new packaging design and significant above-the-line investment in what will be the biggest development for the brand for four years.
Unilever Ice Cream Frozen Food has added a new variant to its Birds Eye SteamFresh range: SteamFresh leeks, sugar snap and garden peas in a garlic and parsley butter. The range aims to offer the best quality frozen vegetables, with no artificial colourings, flavourings or preservatives, in a convenient microwave bag that steams and seals in the natural goodness and flavour of the vegetables.
Findus has expanded its pancake portfolio with the launch of Flips – a new range of traditional-style pancakes. Microwaveable in two minutes, Flips can be eaten as a snack or as part of a meal and are aimed at families or those with hectic lifestyles. There are three savoury (cheese ham, Mexican cheese and chilli beef) and three sweet (choc ‘n’ roll, super strawberry and really raspberry) fillings. At the same time, Findus is launching two new Crispy Pancakes: Cornish style and cheese ham.
Weight Watchers from Heinz has a new range of chocolate coated iced desserts for the convenience market. The new range taps into the growing snacking sector and offers consumers an indulgent snack for on-the-go, without the worry of fat and calorie content.
Findus is extending its French Bread Pizza range with the launch of two new toppings – sticky BBQ and chilli cheese. The company has also refreshed its packaging with easy-to-read nutritional information and cooking guidance. The launch is supported by print advertising, PR and on-pack promotions.
While the frozen potato category is in decline, Aunt Bessie’s continues to be the fastest growing brand in the category, recording 24% year-on-year growth. Aunt Bessie’s Chips are growing at 38%, while Aunt Bessie’s Roast Potatoes are growing at 5% in a static market. Aunt Bessie’s Mash claims to have tripled the mash sector in the past year and its latest addition, Jacket Wedges, has already reached the £1.8m mark, in only six months since launch.
Heinz believes consumers perceive the image of frozen desserts to be slightly dated so innovation is required across the market for long-term growth. It intends to bring the fun back into frozen desserts with a big launch in September.
Unilever Ice Cream Frozen Food has launched a multimedia ad campaign using its Captain Birds Eye range to highlight the importance of a nutritious diet for kids. The Captain’s ‘Nutrition Mission’ campaign marks a step change for the brand as it speaks directly to mums who, now more than ever, are concerned about what their kids are eating.