Offer the right mix

From appetizers for a party to a quick bite after school, arguably nothing beats the convenience of the frozen food section. Despite that advantage, though, these aren’t hot times for frozen foods, and the snacks and appetizers segment is no exception. According “Frozen Snacks — US,” an April 2015 report from global market researcher Mintel, sales for the category have grown only 6 percent since 2009. The report doesn’t mince words about the category’s prospects for a strong future performance, noting that “the category appears in dire need of innovation to meet changing consumer eating habits.”

All the same, there are advantages for the frozen snack and appetizer category, one being their versatility — an appetizer doesn’t just have to be a food served before a party

“The usage is changing, with small plates trending as opposed to three square meals,” says Teri Valentine, CEO of the Glendale, Calif.-based The Perfect Bite Co., which creates a range of frozen appetizer products that are available for private labeling. “It is really convenient to cook up a few appetizers and eat with a salad for a meal.”

Besides versatility, frozen foods also offer convenience, sustainability and already portioned sizes — all benefits that consumers are looking for, says Julie Henderson, vice president of communications for the Harrisburg, Pa.-based National Frozen and Refrigerated Foods Association (NFRA). The secret to sales might be having the right mix of store brand products and promotions.

Keep it clean

Consumer perception that frozen snacks and appetizers, and the frozen foods industry as a whole, are over-processed and unhealthful is one of the biggest reasons the category is not doing well. According to Mintel, more than half of millennials think frozen foods have too many ingredients. However, one area of promise can be found: 54 percent of millennials consider organic frozen snacks to be more healthful.

“The potential could be there, particularly among millennials, to provide an organic frozen snack positioned as a healthy meal replacement, addressing the desire for nutrition, cleaner labels and less-processed foods,” Mintel says.

Beyond organic, cleaner ingredients and packaging could make a difference. As reported by the business website Quartz, Switzerland-based Nestlé, after building a $50 million global research and development center to help spur growth for its frozen foods, is seeing the investment pay off. Its products are doing better than those of competitors. The company is seeing “back-to-back quarterly sales growth.” It’s made product changes such as reducing sodium, trans-fats and artificial flavors, as well as offering more organic and gluten-free choices. Additionally, a packaging redesign included more transparent labeling measures such as information about the source of the food and suggested serving sizes. The article points out the need for retailers to reach out to shoppers who want both convenience and better-for-you attributes from their frozen foods.

“We’ve recently seen several major players reformulating products to have a simpler ingredient list,” Henderson says, citing Nestlé, Marshall, Minn.-based Schwan Food Co. and Gloucester, Mass.-based Gorton’s. “With many aging boomers looking to lead healthier lifestyles and millennials leading the better-for-you trend, simplified ingredients appeal to both these major shopper demographics.”

Henderson notes that the NFRA has a “Real Food. Frozen” campaign underway to change perceptions about frozen foods, but also points out that frozen foods often are fresher than people think.

“Frozen foods are made from real ingredients picked at the peak of ripeness and flash frozen, sometimes right on the field, to lock in all the beneficial nutrients and keep them in their perfect, just-picked state,” she states.

According to Valentine, claims on the packaging of store brand appetizers emphasizing their handcrafted nature could also help convey the idea of freshness.

“‘Handmade’ seems to attract customers, probably since people are often cooking the rest of the meal from scratch so they want the best quality to go along with that,” she says.

Healthful ingredients or foods with a twist could also convey quality.

“We are incorporating a lot of vegetables and grains with great success,” Valentine says, adding that international flavors continue to trend, as well as retro foods such as Brie and pigs in a blanket.

Go ethnic

It’s no secret that Americans are becoming increasingly adventurous in the flavors they seek out and the foods they choose to eat. Retailers shouldn’t ignore this trend for their store brand frozen snack and appetizer offerings. According to Mintel, both millennial and Generation X consumers are open-minded about flavor experimentation in the frozen snack aisle, with Italian-, Mexican- and Asian-influenced products seeing sales.

“Regional needs make a lot of sense for retailers,” Valentine says. “Customers are willing to take a chance on a new flavor or ethnic food if it’s just a small bite.”

Spicy offerings remain hot, too, although the Mintel report notes that spicy options are more popular with men than women. Despite the gender divide, however, Mintel data show that spicy options have the potential to interest male shoppers beyond the millennial crowd, with almost four in 10 men older than 55 indicating that spicy appetizers would appeal to them.

Heat up interest

A key part of selling store brand frozen snacks and appetizers is focusing on promotion just as much as on the food. According to Henderson, demos and cross-merchandising are both strategies that could work in this category, but she also points out the importance of segmentation, particularly in reaching different shoppers.

“Within population segments like millennials and boomers,” she says, “there are differences in age, income, health and family status that dictate the need to examine more granular segments to understand shopper demand and respond accordingly with the right offering, merchandising and messaging.”

When it comes to millennials, in particular, retailers should emphasize quality.

“Attract a millennial audience with ‘boutiquetype’ products and branding,” Henderson suggests. “For brands to matter to millennials, ‘average’ is no longer enough. A whole new level of engagement, authenticity and purpose is necessary.”

Retailers might also want to take a look at the appearance of the entire section.

“The aisles are big, cold and sterile and discourage customers from shopping there,” Henderson points out. “We are trying to change that perception with our focus on POS showing beautifully prepared food photography to ‘warm up the aisle.’”

Promotion outside of the store is important, too.

“Try using social media for party food and ways to incorporate appetizers into consumer lifestyles,” Valentine suggests.

Retailers could also consider featuring store brand items during nationwide campaigns such as Frozen Food Month, which is held annually in March.

“Supermarkets can take advantage of all the national hype just by making the frozen food aisle a focal point and featuring those items that are already being promoted by the manufacturer,” Henderson says, adding that the NFRA provides materials to interested retailers.

Whatever frozen snacks and appetizers customers are looking for, the bottom line for retailers is that the category holds a lot of potential.

“At the end of the day, people want real, simple, nutritious, delicious, affordable and customizable meals, and the frozen aisle has thousands of products to meet those needs,” Henderson says.

Do offer organic frozen snacks and appetizers.

Don’t ignore the frozen aisle; promote it!

Do offer ethnic and/or spicy frozen snacks and appetizers.

Don’t be average; offer boutique branding.