The freeze on frozen food sales is at last thawing - and it's all down to education and innovation, says Sue Barnard

The tide is turning for frozen food sales. Both value and volume have increased steadily over the past 12 months and have moved the market from its long-term £4.4bn annual sales to £4.6bn in the total market by the end of February 2008, according to TNS data.
Ongoing volume growth since March 2007 puts the industry in a good position. Manufacturers are continuing their npd activity, many are adding their financial weight with promotional drives, and opportunities in this long-established market are rising.
Birds Eye's convenience customer insights manager David Kilby says: "Education regarding quality and freshness has been key. Consumers are gaining a better understanding of the category. We've focused on the health benefits, freshness, taste and convenience. Retailers are happy to stock frozen food and families are happy to serve it."
Most categories saw year-on-year sales increases. These include potato products, vegetables and vegetarian lines, pizza and poultry. The shining star, however, was fish. In the past year its fortunes have changed. An 11% year on year increase has seen it overtake both ready meals and ice cream in value, which declined 2.5% and 1% respectively.
One of the talking points this year has been the 'Delia effect'. Many of the products mentioned in her TV programme and book have increased in sales, including frozen potato products. This category alone has risen 7.9% over the past year. Marc Dubery, Heinz sales director for frozen and chilled, says: "When we knew Aunt Bessie products were being featured we built our stocks of mashed potato. We saw a 200% uplift in volume. Delia has made frozen fun again. It's up to the industry now to ensure it attracts consumers and retains them."
McCain considers the frozen potato category to be worth nearly £68m in the convenience channel, showing a 6% rise. Chips account for the greatest share: healthy oven chips and premium varieties are performing well, and fry chips - a small sector at £3.6m - is growing. Driving potato speciality products are roasts, up 11% to £8.8m.
Some producers within the pizza category are focusing their npd on social gatherings. David Wilson, Goodfella's senior brand manager, says: "Almost 40% of adults have a 'big night in' once a fortnight. Casual social occasions are becoming popular, especially among 18-34-year-olds."
The company has relaunched its thin-base Pizzeria to target this sector. Each of the three variants offers classic recipes with a modern twist. Mozzarella Pearls and Pesto combines mozzarella and cherry tomatoes with a sun dried tomato sauce and pesto. The Cajun Spiced Chicken variant is made using roast chicken slices with a spicy Cajun sauce, while Pepperoni & Chorizo is a spicy Italian recipe seasoned with cracked black pepper. Rrp is £2.99.
Total frozen pizza sales have returned to growth following stagnancy brought about by chilled sector competition. The 4% growth, according to producer Dr Oetker, is attributed to premium lines and improved quality. There has been a shift within the total market towards thin and crispy varieties although, within convenience, deep pan continues to be the largest sector (at 38% value). Thin and crispy is catching up at 34%.
Caroline Donnelly, Dr Oetker's senior brand manager frozen, says: "Retailers should stock best sellers that perform all the year round, on and off promotion, for example, Ristorante Mozzerella and Ristorante Speciale."
Findus is seeing a positive change in space allocation with the growth of fish and vegetables. Lynn Saul, Findus head of marketing, says: "Convenience stores offer a solution for top-up shopping, distress purchasing and regular shopping, so the range must satisfy these needs - for example, ready meals for the evening, frozen vegetables for the Sunday roast, or perhaps an ice cream to enjoy now."
Bernard Matthews marketing director Matt Pullen adds: "To maximise sales from limited freezer space, retailers need to be stocking trusted big brands and meal components like breaded poultry and fish, pizzas, frozen vegetables and ice cream. Customers will expect to find the same products in convenience stores as they find in supermarkets, so it's important to be selective and to maintain availability." The key products for convenience retailers include Golden Drummers, Turkey Breast Steaks, Mini Kievs made with 100% breast meat, and Crispy Crumb Burgers, but the company will be launching new poultry lines this year.
Findus is among several manufacturers aiming to reinvigorate the ready meals category with innovation, reporting success with its Novelli ready meals - a tie in with Jean-Christophe Novelli - and is now adding four limited editions.
Amoy has moved into frozen food with the launch by Heinz of Amoy Straight to Wok stir-fry and rice meals. It is hoped that the presence of the Amoy brand in other parts of the store will build sales of the new frozen products.
In response to consumer demand for heartier low-calorie lunchtime options, the Weight Watchers brand from Heinz has been extended to include frozen Chunky Soup Meals that can be steam-cooked in the microwave in eight minutes. Amanda Walker, marketing director at Heinz Frozen UK says: "Research shows there's scope to capitalise on weekday lunchtime eating occasions and offer consumers a more filling soup meal when on a diet."
Savoury pastry products are to get a boost following Northern Foods' recent acquisition of the McDougalls brand licence for frozen foods. The market had been declining by 5% annually, and the company is aiming to increase purchasing through innovation and a brand relaunch. McDougalls' commercial controller Steve Manning says: "Reinvigoration encourages others to get involved. Competition is good for the category, the industry and the consumer."
So what of the future? Mintel considers that a preoccupation with healthy eating will continue to drive development. Innovation is likely to mirror the fresh sector, with exotic varieties, organic, Fairtrade and functional foods being introduced. New packaging will include smaller pack sizes. Convenience, including ready-to-steam and microwaveable products, will also drive sales

Top tips for c-stores

Birds Eye's research shows that while the average convenience store shopper spends £5.26 a visit, those shopping for frozen spend an average of £14.31. To capitalise on this:
Ensure products are presented well, with the best sellers positioned prominently
Ensure each category receives appropriate space
Stock branded products with big marketing support
Stock up with 'need it now' foods, eg frozen fish, ready meals and green vegetables
Exploit seasonal opportunities, eg barbecue and Christmas
Display clear pricing, signage and POS materials
Keep freezer cabinets clean and well stocked to entice shoppers

Meat-free growth

Research carried out by Marlow Foods, producers of Quorn, found that 40% of British households purchased meat-free meals in 2007, up 38% on the previous year. Jeremy Hughes, Quorn's trade marketing controller says: "New users are coming into the meat-free category. They aren't necessarily vegetarians. They simply recognise the need to get a better balance in their diet and want to get some of their protein from sources other than meat. Convenience stores should focus on a small selection of the best selling frozen lines such as mince, pieces and sausages."
Research by Tivall indicates that around 45% of people are trying to reduce meat consumption. UK commercial assistant Jessica Dennis says: "There is a resurgence in homemade savoury cooking, with consumers looking for simple and quick meals they can cook from scratch. As a result the sector is seeing increasing demand for ingredient-type products."
Through independents, sausages are the best seller, although ingredients are rising fastest with mince up 35% and chicken pieces up 108%. Burgers and crumbed fillets are also strong, according to Tivall.