Frozen Food is Coming Back Thanks to Millennials
After slumping for years, the freezer case has become a bright spot in the supermarket aisles. Brands like Banquet frozen dinners, Eggo waffles, and Stouffer’s entrees are rising in popularity despite appearing out of step with food trends such as quinoa, kale, and farm-to-table.
Even millennials, a generation known for its foodie tastes, are embracing frozen vegetables and meals, which are convenient and less expensive than takeout. Americans in general are buying more frozen food, with volume growing in 2018 for the first time in five years, according to David Palmer, an analyst at RBC Capital Markets. Nielsen estimates annual US sales of frozen food at $53 billion.
The recent uptick in popularity stems in part from a record-high level of single Americans as millennials wait to form families. Frozen meals are an easy way to control portions, and there’s typically very little waste.
Nestle SA, the largest food and beverage company in the world, is the top seller of frozen food in the US with brands including Stouffer’s, Lean Cuisine and DiGiorno Pizza.
Sales of frozen vegetables have been particularly strong, jumping 4.5 percent in the last year to $3.03 billion, according to Nielsen. For Pinnacle, sales in the overall frozen segment, driven by Birds Eye, were up 7.5 percent in the most recent quarter, while B&G Foods Inc. is getting a boost from its Green Giant unit. The company bought the brand from General Mills Inc. for $765 million in 2015. Green Giant was up 13 percent in the recent quarter.
That kind of growth is difficult to find elsewhere in the packaged-food industry. The 10 largest US companies have seen almost $20 billion in revenue evaporate over the last three years.
With frozen food an unlikely source of growth, there could be mergers-and-acquisitions activity, according to Pinnacle CEO Mark Clouse.
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