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
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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