By Jill Rivkin

With economic times so extraordinary in the past couple of years, sales in food and beverage segments have shown some remarkable shifts, and trends have turned in unpredictable directions. Because of the unexpected turbulence, for the first time, Chicago-based market research firm Mintel re-forecasted its market-size predictions and highlighted some food and beverage categories that are faring well despite — and sometimes because of — economic woes. Not entirely surprisingly, Mintel re-evaluated the frozen food segment and calls the frozen meals category “recession-proof, or rather recession-fueled.”

According to a recent Mintel report, frozen meals offer consumers convenient, filling, often inexpensive and family-focused options — something consumers of nearly all socioeconomic backgrounds seek in today’s economic environment. Mintel reports a total sales increase for frozen meals of 4.5 percent in 2008, a figure in sharp contrast to the initial forecast of a 0.3 percent decline.

Attractive Attributes

Frozen foods, like Mintel’s other recession-proof segments including bread, sweet spreads, side dishes and coffee, are “comfort/simple” foods, a factor many product manufacturers cite as a major driver in consumer purchasing decisions.

John Kelly, president of Tillsonburg, Ontario-based Otter Valley Foods says single-serve comfort foods, especially those with lower-cost options and ultra-convenience in preparation and packaging are the biggest trends in the frozen foods segment today. “I think there are opportunities for growth within these types of products if they are positioned in the right retailer,” he says, citing price-focused retailers such as Wal-Mart Stores.

Another attribute that is driving consumer decisions is an all-natural/good-for-you ingredient profile. Products with no trans fat or preservatives are making strides as consumers garner a more in-depth nutrition education and pay closer attention to what they eat and what they feed their families.

“Consumers read labels and are more concerned about what they are putting into their bodies,” says Jeff Gehres, director of sales and product development at Request Foods Inc., Holland, Mich.

Innovation Drives Interest

The frozen foods segment reaches across many subcategories including everything from bite-size frozen appetizers to pizzas, meat, poultry and fish, as well as family-sized entrees and, of course, desserts. But the common denominator in success for these categories is innovation — innovation that ranges from convenience packaging for commodity-type products to unique flavor profiles and ingredients.

“Frozen continues to show strong growth as the supplier side is very innovative with meal segment and meal offerings at convenient and appealing price points,” says Frank Benso, vice president at Nampa, Idaho-based Great American Appetizer. “The selection is enormous and the quality, in some instances, is of restaurant quality.”

Fortunately for food marketers and retailers, the freezer case has seen ample innovation in recent years. In commodity-type items such as frozen vegetable and potatoes, the environment changed dramatically in 2006 when Birds Eye launched Steamfresh and introduced consumers to steam-in-a-bag technology. Catering to the ultimate in convenience and also opening the doors for flavored varieties, new combinations and meal-kits, that launch contributed to an 8 percent current value sales gain that year, according to Chicago’s Euromonitor. In 2008, frozen processed vegetables grew by more than 6 percent to reach more than $2.7 billion, Euromonitor reports. General Mills introduced a similar product called Green Giant Simply Steam and new products were launched by SC Johnson’s Ziploc brand and Clorox Co.’s Glad brand to promote steam-in technology for fresh products.

Beyond packaging and prep innovation, innovative flavor profiles drive many frozen categories as consumers look for restaurant-inspired foods to prepare at home. Ethnic ingredients and varieties such as Mediterranean, Thai and Cuban are becoming more popular, Gehres says.

Packaging Trends

As brand owners and contract manufacturers and packagers look to develop new products and packaging, today’s environment is more demanding than ever. Of course consumers and retailers want convenience and function.

Re-sealable, gusseted, stand-up poly bags work great in the frozen segment, Benso says. “Besides the obvious reason for the consumer storage after taking what you need or use, the added benefit is some flexibility with the rigidity of the planogram space at retail,” he adds.

And now, in addition to convenience, function and attractive aesthetics, marketers and manufacturers have to keep the sustainability element top of mind throughout the production process.

“Sustainability is playing an important role in the development of items,” Gehres says. “How we design our packaging can play an important role in how it reduces the carbon footprint by using less packaging. Buying ingredients from local suppliers when available and focusing on our manufacturing facilities to make them more efficient.”

The Future of Frozen

According to Euromonitor, frozen processed food is forecast to grow almost 7 percent in constant value terms to more than $33.6 billion by the end of 2013, thanks to the segment’s convenience-focused approach to cooking, its taste and variety. “Both value and volume sales are projected to see higher forecast growth than that seen over the 2003-2008 review period,” Euromonitor reports.