Focus On What's Hot To Grow Cold

Trends worth consideration for frozen meals and entrées include growing consumer interest in meatless fare and Asian flavors.

The bad news for frozen meals and entrées? Overall, frozen foods have been flat to deelining, according to "Frozen Foods in the U.S.," an October report from the Packaged Facts division of Rockville, Md.-based MarketResearch.com. Contributing to the stagnation, the report says, are the slow economic recovery, changing eating and shopping patterns on the part of consumers, shifting demographics, little excitement in frozen foods categories and merchandising, increased retailer focus on fresh foods, and more.

The good news? Store brands represent a bright spot within the frozen meals and entrées segment. Although data from New York-based Nielsen show a 1.0 percent rise in dollar sales in the total frozen prepared foods category for the 52 weeks ending Oct 27, and a 2.7 percent decline in unit sales during the same timeframe (food, drug and mass merchandise outlets, including Walmart; club stores; dollar stores; and military stores), the store brand side fared much better. It posted 5.3 percent and 3.3 percent increases in dollar and unit sales, respectively.

Trends with traction

To keep store brand frozen meals and entrées on a growth curve, retailers will want to ensure new offerings mesh with continuing trends. One such trend of growing interest on the part of consumers — younger Americans, in particular — is vegetarian and vegan offerings, says Virginia Lee, senior research analyst for Euromonitor International, Chicago. The rising demand for vegetarian and vegan offerings also is evident on the foodservice side; the MenuMonitor resource from Chicago-based Technomic — which tracks the menus of the top 500 restaurant chains — shows a 13 percent incidence uptick in vegetable dishes for the third quarter of 2012 compared to the third quarter of 2011, says Mary Chapman, director, product innovation for the company Also picking up steam are spicier flavors; today's millennials, for example, pour Sriracha hot sauce "on evelything from Thai food to hot dogs," she says.

"Asian flavors should continue to shine as frozen food marketers take cues from restaurants and food trucks," Lee adds. "More companies are expected to introduce Korean flavors, as [they have gone] mainstream through the success of Kogi BBQ trucks and Momofoku."

Another category trend that appears to have traction is that toward Halal certification, notes Daniel Granderson, an analyst with Packaged Facts. In 2010, American Halal Co. launched the Halalcertified Saffron Road brand, introducing four frozen entrées. Since then, the line has grown to 12 varieties (plus non-entrée items), he says, with some items such as Cheese Lasagna and Macaroni & Cheese sitting outside of the Indian ethnic food space.

"We are already seeing other companies seek out Halal certification for their products," Granderson says.

Trends on the horizon

Retailers also will want to look to restaurants to keep abreast of menu trends that might have the potential to trend soon at retail. Chapman says current menu trends that likely would be appealing in frozen meals and entrées include "comfort food with a twist; global influences, especially spins on already-familiar items; [and] better-for-you items that focus more on quality of life than cutting calories and fat."

But new product development shouldn't come at the expense of some traditional favorites that continue to trend upward on the foodservice side. MenuMonitor shows 5 percent incidence rises in fish dishes, pizza and pork dishes for the third quarter of 2012 compared to the third quarter of 2011, and a 4 percent incidence rise in Mexican fare during the same timeframe, Chapman notes.

"Burgers, sandwiches and chicken dishes are among the most popular types of entrées," she adds.