Is the Frozen-Food Industry Thawing Out?

As healthy eating trends pick up, the era of the TV dinner appears to be winding down.

Frozen is the loneliest aisle.
National Journal
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Marina Koren
July 8, 2014, 1 a.m.

The freez­er aisle is get­ting few­er vis­it­ors these days.

Over the last sev­er­al years, U.S. sales of frozen meals leveled off and began a slow de­cline. Since 2009, sales of freez­er-aisle items fell 3 per­cent to $8.92 bil­lion, ac­cord­ing to Eur­omon­it­or In­ter­na­tion­al, a con­sumer-mar­ket re­search cen­ter. Eur­omon­it­or pre­dicts a de­cline of an ad­di­tion­al 2 per­cent this year.

Big-name com­pan­ies are strug­gling to pro­duce growth on their bot­tom lines in their frozen-food di­vi­sions. Nestlé’s Lean Cuisine low-cal­or­ie frozen-meals brand lost more than a quarter of its sales over the past five years, The Wall Street Journ­al re­por­ted last month. Co­nA­gra Foods has dis­con­tin­ued sev­er­al of its Healthy Choice din­ners al­to­geth­er be­cause of poor sales.

One would think that mi­crowave­able din­ners’ repu­ta­tion for be­ing cheap and con­veni­ent makes them pop­u­lar with budget shop­pers. In­deed, a few years ago ex­perts thought frozen meals would be re­ces­sion-proof. In 2009, mar­ket re­search­er Min­tel pre­dicted that the in­dustry would be­ne­fit from the re­ces­sion, fore­cast­ing high­er sales than ever. In­stead, over­all sales by volume have taken the biggest hit. Simply put, people aren’t buy­ing frozen din­ners as much they once did.

But what’s weigh­ing down the in­dustry has noth­ing to do with cost — and everything to do with con­tent.

The de­cline of frozen-food sales in the last few years has co­in­cided with a rise in pub­lic in­terest in nu­tri­tion. Pack­aged-food com­pan­ies’ com­pet­it­ors, along with health ex­perts and cook­ing-show hosts, began trum­pet­ing the be­ne­fits of fresh over frozen, and con­sumers listened. Nowadays, more Amer­ic­ans like to know just ex­actly what’s in their food — and wheth­er it’s glu­ten-free, or­gan­ic, and non-GMO (wheth­er those la­bels are mean­ing­ful is a sep­ar­ate de­bate). “Fresh” de­notes more nu­tri­ents and bet­ter taste, while “frozen” has be­come syn­onym­ous with high so­di­um and hard-to-pro­nounce pre­ser­vat­ives.

Frozen-food pro­du­cers are well aware that this change in con­sumer tastes is con­trib­ut­ing to fall­ing sales. “With­in this food­ie cul­ture the last few years, I think there has been a change in how some people define healthy foods,” Rob Mc­Cutcheon, pres­id­ent of Co­nA­gra’s con­sumer frozen-food di­vi­sion, told The Wall Street Journ­al in June. “There is def­in­itely a push to­ward products that are more real, high­er qual­ity, more homemade, and closer to the source.”

So the frozen-food in­dustry is play­ing catch-up. In May, eight frozen-food pro­du­cers, in­clud­ing Co­nA­gra and Nestlé, launched a three-year, $90 mil­lion mar­ket­ing cam­paign to change con­sumer per­cep­tion of their products. Its na­tion­al TV ads bor­row from the lex­icon that made fresh and nat­ur­al foods pop­u­lar, with tag lines such as “Frozen: How fresh stays fresh” and “Freez­ing is nature’s pause but­ton.” The cam­paign’s goal, ac­cord­ing to the Amer­ic­an Frozen Food In­sti­tute, is to make con­sumers take a “fresh look at frozen.”

The fu­ture of frozen isn’t all bleak, however. While a heightened aware­ness of nu­tri­tion has spelled trouble for TV din­ners, it has been a boon to frozen fruits and ve­get­ables, the stars of smooth­ies.

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