The Cold Standard

By Jennifer Strailey

The frozen case offers a host of hot trends in natural and organic foods.

One of last year's hottest food and beverage trends came out of the supermarket freezer case, and, given the current economic outlook and consumer shopping habits, industry analysts believe this cold front has moved in for the long stretch.
U.S. retail sales of frozen foods and beverages through all retail channels totaled $55.9 billion in 2010, up 1.7 percent from the previous year, according to Packaged Facts, a division of MarketResearch.com, in its recently released report, "Frozen Foods in the U.S., 3rd Edition" (January 2011). The consumer market research firm, based in Rockville, Md., expects that number to reach $70 billion in 2015.
There's no question that frozen food sales have been driven in part by the economy, which has seen a decline in Americans dining out in favor of eating at home. Frozen foods provide a more affordable alternative to eating out, while at the same time satisfying consumers' eternal craving for convenience. But more recently, manufacturers have introduced a slew of natural, organic and wellness-oriented frozen food and beverage products that has brought attention — and health cred — to the category like never before.

From pushcart to grocery cart

From a Hong Kong pushcart, General Mills has built Wanchai Ferry into a significant brand.

By MIKE HUGHLETT, Star Tribune

Last update: February 7, 2011 - 3:39 PM

The playbook for U.S. foodmakers often calls for exporting a successful U.S. product to points abroad. General Mills, for instance, has had a big hit in China with its classic Bugles corn snacks, albeit in some flavors we might not find here -- like seaweed.

Richard Sennott, Dml - Star Tribune

Both Byerly's and Lunds offer Wanchai Ferry, a General Mills brand that focuses on Chinese food. Wanchai Ferry is a brand that started in China and is big there. General Mills bought it, and decided to launch the brand here, but with different products. Comes in dry kit dinners where you add meat, and frozen entrees for two. The latter was introduced in 2009, and has so far done quite well. These pictures were shot in the St Louis Park Byerly's .

With its Wanchai Ferry brand, the Golden Valley-based packaged food company has called a reverse. The brainchild of a Hong Kong pushcart vendor, Wanchai Ferry evolved into a popular supermarket brand in China.

General Mills brought the brand to the United States, and so far, it's done well. Since the 2009 launch of Wanchai Ferry frozen dinner entrees for two, they've generated more than $50 million in annual sales and quickly grabbed a respectable slice of market share.

Multi-serving dinners are a sweet spot in the frozen meal business, but one that's also attracting a lot of competition. Within a year of Wanchai Ferry's debut, packaged food giant Unilever teamed up with restaurant chain P.F Chang's China Bistro to launch a frozen entree sporting the latter's brand. Its sales appear to have jumped ahead of Wanchai Ferry's.

Wanchai Ferry is rooted in the business of Chong Kin Wo, or Madame Chong. In the 1970s, she started selling dumplings in Hong Kong's busy Wanchai commercial area, and her wares eventually made it into grocery stores under the Wanchai Ferry brand. Pillsbury bought the brand in 1997, and General Mills inherited it with its purchase of Pillsbury in 2001.

General Mills has built the brand into one of its star assets in China. Wanchai Ferry products, including dim sum and wontons, are available in about 100 Chinese cities, carried by such major international food retailers as Wal-Mart and France's Carrefour. Wanchai Ferry sales in China in 2010 were up 20 percent over the previous year.

A new market

With success in China, General Mills sensed an opportunity on its home turf. "Chinese is the most widely eaten restaurant cuisine, but only 45 percent [of consumers] make it at home," said Jon Nudi, president of General Mills snacks division, who helped roll out Wanchai Ferry in this country.

In 2007, General Mills launched Wanchai Ferry dry dinner kits in the United States, which require consumers to add meat and cost about $4.60. In 2009 came the debut of frozen entrees, complete with meat, which can be prepared in about 15 minutes and cost $7 to $8.

While the brand name is the same as in China, the products are different, an attempt to account for American tastes, Nudi said. The frozen dinners come in eight varieties, including Orange Chicken, Shrimp Lo-Mein and Beef & Broccoli. The goal is to deliver "restaurant quality food," Nudi said.

Multi-serve dinners like Wanchai Ferry have been a bright spot in the frozen entree world, despite their relative high cost during a tough economy. They've been the only frozen meal segment posting sales gains since 2008 among food mass merchandisers excluding Wal-Mart, according to a fall report by market researcher Mintel International.

"Given that its biggest increases were during the peak of the recession, it appears that this segment has done a better job than the others in capturing dollars that might have otherwise been spent dining out," the Mintel report said.

Quick success

Wanchai Ferry's frozen food performance was better than General Mills expected, Nudi said, topping the important first-year sales mark of $50 million.

According to market researcher SymphonyIRI Group, which tracks sales in conventional supermarket channels, Wanchai Ferry carved out about a 3 percent share of both the multi-serve frozen meal business and the dry dinner mix segment by the end of last year.

The dry dinner market is dominated by General Mills' Hamburger Helper. The frozen, multi-serve meal segment is topped by Stouffer's and Bertolli, with market shares respectively of 31 percent and 10 percent, according to IRI. P.F. Chang's had captured 5 percent of the market by the end of December, according to SymphonyIRI.

Restaurant brands have long enjoyed success when transplanted to the frozen food aisles. Stouffer's itself was born from a now-defunct restaurant chain, while the Marie Callender's brand originated from a western restaurant group, according to a recent report by market researcher Packaged Facts.

General Mills got into the restaurant act itself last year by launching multi-serve frozen dinners in a partnership with Romano's Macaroni Grill. That gives General Mills a two-front offensive in the freezer: Macaroni Grill for Italian tastes, Wanchai Ferry for Asian.

Mike Hughlett • 612-673-7003

Boulder's Evol, famous for burritos, turning attention toward other frozen foods - Boulder Daily Camera

Boulder's Evol, famous for burritos, turning attention toward other frozen foods - Boulder Daily CameraBy Alicia Wallace Camera Business Writer
Posted: 12/26/2010 09:30:00 PM MST

Jason Espinoza checks the seal on the burrito packaging and racks the burritos for the refrigerator at Evol Foods in Boulder on Dec. 9. ( MARK LEFFINGWELL )

If officials behind a Boulder-based frozen burrito company get their way, the Evol empire will spread in 2011 and do so in a very cold -- yet, brightly lit -- place.

A year after the Boulder-bred Phil's Fresh Foods gained some investors and rebranded itself as Evol Burritos (not sinister, it's 'love' spelled backwards), the company changed its name once again. Now operating as Evol Foods, the local manufacturer is launching a line of frozen gluten-free bowl entrees and has grander plans to tackle other sides of the frozen food market, founder Phil Anson said.

"It evolved really quickly into a big overall convenience brand," Anson said. "Over time, we'll be in entrees and you'll see us go into other categories that are as big or bigger than entrees."

What those could be, Anson's not saying right now, just that Evol Foods will broaden its offerings more in the spring and summer.

Although he's staying mum, Anson expressed confidence in Evol Foods' ability to gain a foothold in the sector. Consumers are looking for something fresh, new and different, he claimed.

"That's why we launched Evol," he said. "We really wanted to create a lifestyle brand that people can connect with."

Anson said he also sees a big gap on the meat front, especially in the natural, organic, active and health-focused arena.

"Just because people want natural and organic products doesn't mean they don't want meat," he said.

Evol Foods is expanding in a sector that had "strong" growth during the past five years, but also experienced a slowdown this year.

During 2006 to 2010, sales in the frozen foods and beverages channel increased $10 billion, or 21.7 percent, for a compound annual growth rate of 5 percent, according to an industry report released this month by Packaged Facts. The projected sales gain of 1.7 percent, or $900 million, for 2010 would be the weakest during the period; although, sales gains in the preceding
Jason Espinoza checks the seal on the burrito packaging and racks the burritos for the refrigerator at Evol Foods in Boulder on Dec. 9. ( MARK LEFFINGWELL )
years could have been driven by higher prices, officials for the market research firm said in the report.

While some consumer spending has contracted during the economic downturn, frozen foods have been affected to a lesser extent, according to the report.

"The new economic reality feeds two opposing trends in consumer goods markets, including frozen foods: premiumization (upscaling) and cutting back (downsizing)," Packaged Facts officials wrote in the report. "Rather than canceling each other out, these two trends interact in the face of slow economic recovery as consumers juggle how to get the most out of less money or less spending."

Evol Foods' sales multiplied in 2010, Anson said, noting the company should finish the year up 200 percent from 2009.

The brand's distribution also exploded. As Phil's Fresh Foods, the burritos were sold in 700 stores. Now, as Evol, they are sold in 5,000 to 6,000 locations, he said.

Anson said the key to future expansions -- in sales, products and areas such as food service -- will include his "foodie" mindset and keeping on top of the variety of food-related trends.

"Monitoring what's happening from white tablecloth restaurants to mobile eating, my ears are attuned to all of those things," he said.

Frozen food trend on the up, says Packaged Facts

www.foodnavigator-usa.com
By Caroline Scott-Thomas, 23-Dec-2010
 
"The frozen foods industry in the United States has boomed over the past few years – and growth in the sector looks set to continue in 2011, according to a new report from Packaged Facts."

The market research organization said that the frozen food sector has enjoyed a period of unprecedented growth, as consumers are eating at home more often and manufacturers have innovated with healthier options that also tap into demand for convenience. Packaged Facts’ “Frozen Foods in the U.S., 3rd Edition” report found that from 2006-2010 sales of frozen foods rose 22 percent, or about $10bn, to reach a total value of $56bn in 2010.

Publisher of Packaged Facts Don Montuori said: "A lingering effect of the recession is that consumers are eating at home more. This trend has had a positive impact on the frozen foods market, as consumers turn to the freezer aisles to supplement more expensive fresh produce and meats. Additionally, microwaveable frozen products provide a quick and easy lunch-at-work for those looking to avoid pricey lunches out."

In addition, the report says that the economy is no longer holding back frozen food innovation. After two years of declines, the number of new frozen food and beverage product introductions reached a new high in 2010, increasing 21 percent on the previous year, to 728, more than in pre-recession 2007. The market researcher said this is “a sign that economic conditions are no longer discouraging frozen food marketers from bringing new products to the market.”

While frozen dinners and entrees continued to sell well in 2010, sales of frozen appetizers and snacks are flat, and the frozen juice category is in free-fall, the report said.

“Canned, bottled and frozen juices have all experienced losses in the millions as consumers turn to beverage options with less sugar, or to functional beverages such as energy drinks and enhanced waters,” according to the market researcher.

Packaged Facts predicts that the frozen food and beverage sector will reach $70bn in retail sales by 2015, up 25 percent on 2010.

For further information, please visit: http://www.packagedfacts.com/Frozen-Foods-Edition-2511637/.

Frozen food manuf. find themselves in spot during the recession

Marketers of frozen convenience food have found themselves caught between a rock and a hard place during the economic downturn. Though fresh convenience food has gained through positioning that casts it as a less expensive alternative to restaurant food during a time of recession, frozen convenience food is frequently viewed as a more expensive, less fresh alternative to cooking from scratch at home. The frozen food categories that have been able to grow substantially in this environment are therefore the ones that have been able to elude this paradigm.

Specifically, the mammoth frozen pizza category and the spunky hand-held breakfast category have both found a way to go head-to-head with restaurants; and the prepared vegetable category has been able to triumph on the freshness front via the development of steaming techniques. According to Packaged Facts, these three categories have led the way sales-wise, enabling an otherwise ambivalent market for frozen convenience foods to grow by a modest 2.0% in 2010 to reach sales of $16.8 billion. Packaged Facts expects that marketers in other categories will soon adopt similar strategies, driving sales of fresh convenience foods up another 10% by 2015, to $18.6 billion.

Frozen Convenience Foods in the U.S. : Packaged Facts

US low-sodium product launches soar – but consumers go for taste

Food Navigator USA, Caroline Scott-Thomas, 12-Apr-2010

The US has launched more products claiming low or no sodium than any other country in the past three years, according to a new report from Packaged Facts – but consumers still prioritize good taste.

The US Department of Agriculture has estimated that the average American gets about 4,000mg of sodium a day, well above the recommended daily maximum of 2,300mg. Excessive sodium intake has been linked to increased risk of high blood pressure, heart disease and stroke. And with an estimated 75 percent of sodium in the average US diet coming from packaged foods, industry is already under pressure to reformulate foods to contain less sodium.

However, Packaged Facts claims that reducing sodium intake is not at the top of consumers’ list of priorities for dietary change. The market research organization said that low-sodium is not as important to consumers’ healthy eating agendas as eating more fruit and vegetables, more fiber or limiting saturated fat, sugar and trans fat. Nevertheless, “if good-tasting, lower-sodium options are offered, consumers will buy them,” it said, as consumers are interested in eating healthier foods overall.

Sodium reduction poses many challenges for manufacturers, including functionality as a leavening agent or preservative, as well as consumers’ flavor preference. But there is still huge momentum in the industry to reduce sodium.

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Low- and No-Sodium Foods and Beverages in the U.S.