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Frozen Left Out in the Cold

There’s something missing from retailers’ post-pandemic private label plans.

Although we were able to include some of the contents of FMI’s new report The Power of Private Brands 2020 in this month’s cover story, it wasn’t officially released until after the article was already finished. Now that I’ve had an opportunity to read it cover to cover, I can tell you it includes some great insights that retailers can use to jumpstart decelerating private label growth.

WHAT ABOUT FROZEN FOODS?

But what I found most interesting is what the report doesn’t include: frozen foods. When asked to identify the major growth opportunities for private brands, retailers surveyed by FMI listed fresh foods such as bakery and deli (83%), prepared meal solutions (79%) and fresh meat and poultry (72%) among their top four. Except for home delivery and click and collect at No. 3, the list looks much like it would have pre-pandemic. But as the pundits keep telling us, the coronavirus has changed everything about how consumers shop, and some of those changes are likely to stick.

Retailers are right to address the shift to e-commerce, but what about the shift to frozen foods? Sales were on the rise long before COVID-19 struck, but they skyrocketed in March. Even during the 12 weeks ended Sept. 6 when cases were falling, total private label frozen sales grew 21.8% – more than twice as fast as sales of store brands across the store (+9.0%) and significantly faster than sales of own brand refrigerated foods (+13.1%).

My thinking is that consumers who bought private label frozen foods out of necessity early on in the pandemic are coming back because of the quality and convenience, not necessarily because of the coronavirus. So why not invest in the department? As Spencer Baird of Inmar Intelligence points out in the cover story, some of the largest categories in the frozen space have comparatively low private label shares. Single-serve entrees? Less than 2%. Pizza? 12%. Frozen novelties? 11.4%. Handheld breakfasts? 8.6%. And the list goes on. Clearly, opportunities for growth are there.

Growing consumer awareness of the fact that many products are frozen at the peak of freshness also opens up the door for more high-end private label items. As Alex Dzieduszycki, founder of Julian’s Recipe, mentioned during a recent interview: “You can freeze the most premium of products nowadays. There are no restrictions. In fact, I’d rather have a really great frozen baguette than a ‘fresh’ one any day.”

And don’t forget about who’s buying frozen store brands. Millennials are the demographic most likely to say they plan to buy more private label going forward. They’re also the group most open to the argument that frozen food means less waste. Sure, they love a good farmer’s market, but who’s to say you can’t offer locally grown frozen products under your own brand?

5 DRIVE 90% OF GROWTH

Another interesting nugget revealed in the FMI report is that the top five food retailers across channels accounted for 90% of private label edibles growth from 2017 to 2019. If you’re not one of them, maybe it’s time to take another look at your frozen offerings.

 

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Denise Leathers

Denise Leathers

Denise is the Editorial Director for Frozen & Refrigerated Buyer.

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