Changing demographics are driving growth, but new plant-based options and bold flavours combined with improved merchandising could take the category even higher.
Forget cheeseburgers, fried chicken and meat-loaf. Today’s consumers are craving lo mein, moo goo gai pan and Mongolian beef.
“Demographics are changing in the United States. Each successive generation is more ethnically diverse than the previous, which has led to a sharp demand in ethnic foods, especially Asian, including frozen options,” says Ron Slominski, vp of sales and category management at Marshall, Minn.-based Schwan’s Consumer Brands (schwanscompany.com), the parent company of Pagoda. In fact, he reports, “The frozen Asian food category grew an astonishing 46% during the 26 weeks ending Oct. 4.”
A $2 BILLION OPPORTUNITY
Despite the impressive growth, Slominski says the category is still underdeveloped when compared with other categories. “If retailers captured the same percentage of the Asian food category as they do the total pizza universe, we would realize more than $2.0 billion in incremental retail sales.”
The ongoing pandemic offers a huge opportunity to grab at least a piece of that business, says Justin Neal, vp of sales at Petaluma, Calif.-based Amy’s Kitchen (amys.com). “Consumers are seeking frozen solutions now more than ever before. They’ve discovered (or rediscovered) that the frozen Asian aisle features healthy, ﬂavorful options that are also convenient. We need to work hard to keep them coming back for more by providing — and spotlighting — a variety of great-tasting, high-quality foods with the attributes they’re looking for now: organic, plant-based, whole ingredients.” But it all starts with millennials.
Older now and starting their own families, “[Millennials] are hitting a life stage where frozen food convenience and value become more relevant,” says Schwan’s VP of marketing Brad Smith. But they remain adventurous eaters who are more likely than other demographic groups to eat ethnic foods more often. “As a result, we’re seeing growth in Asian food outpace most other categories within frozen,” he reports.
Within the frozen Asian segment, organic options are putting up some of the best numbers. “We attribute the accelerated growth of organic to consumers looking to food as a means of improving health and wellness, especially in the face of COVID-19,” says Amy’s Neal, adding that millennial consumers are also concerned about climate change and view organic as a means to mitigating environmental impact.
KOREAN FLAVORS ARE HOT, HOT, HOT
Manufacturers say newer, bolder Asian ﬂavor proﬁles are trending among shoppers tired of the same old, same old. “Consumers are eating out much less, so they’re looking to prepared frozen foods for more ﬂavor and new global options,” says Neal. Topping the list for many: Korean food.
Schwan’s parent company, Seoul, South Korean-based company CJ CheilJedang, already offers more than 100 different Korean foods, including on-trend mandu, under its Bibigo brand. But in 2021, it will introduce several new items, including three fried rice varieties (Shrimp and Soy Garlic, Chicken with Korean BBQ, and Vegetable Kimchi), as well as multi-serve Korean Crunchy Chicken in both Sweet and Spicy and Soy Garlic ﬂavors, reports Smith.
Another purveyor of frozen Korean foods, Tualatin, Ore.-based Lucky Foods (luckyfood.com), is focusing its efforts on nutritious, plant-based foods that can be served for dinner. Its most recent product launch, Vegan Korean Style Pancakes, offers consumers a restaurant favorite they can enjoy at home, says brand manager Megan Rolerkite.
“You’ll see ‘Pa Jeon’ on the menu at many Korean restaurants,” she explains. “With more people eating at home and a desire for authentic, ethnic foods, our Korean Pancakes serve to fulﬁll the takeout craving with the convenience and health beneﬁts of eating at home.”
HOLD THE MEAT
According to Neal, plant-based products were already on the rise at the beginning of 2020, but after the pandemic hit, that growth accelerated tenfold. Amy’s offers more than 120 plant-based items and recently added a line of vegan bowls, including a dairy- and nut-free Asian Dumpling Bowl featuring organic noodles, house-made tofu and a rich, savory hoisin sauce. At the height of the pandemic, says Neal, the product registered triple-digit gains.
“Plant-based consumers present a big opportunity as they tend to return for more and spend more upon their return, so we want to be a solution at shelf when they revisit.”
On the multi-serve side of the plant-based frozen Asian food segment, Seattle-based Suji’s Korean Cuisine (sujiskorean.com) will kick off 2021 with the addition of four meatless meal kits: Orange Chick’n, Beeﬂess Bulgogi, Chick’n Garlic Teriyaki and Beef’N Broccoli. Each all-natural, 100% vegan, clean label kit includes three separate pouches: 3 ounces of plant-based protein, 3.5 and 13.5 ounces of rice and veggies.
But for consumers who prefer to create their own meatless Asian dishes, the company will also introduce 9-ounce packages of value-added meat alternatives that can be merchandised in the deli or refrigerated meat sections: Beeﬂess Strips, Chick’n Strips, Korean BBQ Style Beeﬂess Strips and Teriyaki Chick’n Strips.
“Consumers are focusing on eating healthier,” says company founder Suji Park. But it still has to be easy. So Suji’s new plant-based meats and meal kits offer both plant-based nutrition and convenience..
Another new addition to the category comes from Vernon, Calif.-based Golden West Food Group (gwfg.com), which recently introduced ﬁve single-serve frozen plant-based chicken and beef entrees. Offered in takeout-shaped containers, the collection includes Kung Pao Chick’n, Sweet and Sour Chick’n, Orange Chick’n, Pepper Steak and Beef & Broccoli.
CREATE AN ASIAN DESTINATION
Although most stores have an international section in the frozen food aisle, manufactures are calling for them to create more prominent Asian destinations to attract consumers and drive up sales.
“Currently, the frozen Asian category sits across multiple locations within the frozen food department,” says Schwan’s Slominski. “We recommend retailers bring together the frozen Asian subcategories into one destination. This not only helps consumers ﬁnd the category, but also makes it easier for them to discover new items and create a total Asian meal solution.” But does it move the needle on sales?
“We have seen Asian destination tests not only drive explosive frozen Asian category growth, but also total frozen department growth,” answers Slomininski. As a result, “We expect the Asian destination conversions to continue in 2021.”
But according to Alex Uoo, senior vp of sales/COO at Suji’s Korean Cuisine, it’s not enough to simply create an Asian destination. It also has to be properly curated. “There is so much duplication of Pad Thai and Orange Chicken,” he explains. “The category manager needs to take more risks and look at long-term goals to grow the business for higher proﬁtability. Why do you need ﬁve of the same item? Cut the lowest-selling item and make space for new innovations, which, right now, means plant-based meats.”
WHAT’S NEXT IN FROZEN ASIAN?
“2021 will be a big year for us as we debut Sweet and Sour Chicken,” says Jack Acree, executive vp at Stamford, Conn.-based Saffron Road (saffronroad.com). While the company is known for its authentic, clean-label ethnic meals, “Chinese is a huge category that we have not tapped into before.”
Not only will the frozen Asian section welcome some new brands, it’s also expected to see a more diverse array of products from existing players. “We are starting to see more interest not only in more meaningful Asian product portfolios (meaning more items and promotion), but in more unique items and ﬂavors,” says Al Greenwood, vp of sales at Bay Shore, N.Y.-based Water Lilies Foods (waterliliesfood.com). Korean is a no-brainer, but he also predicts more fusion (Asian and American) offerings.
Manufacturers are also looking for opportunities outside traditional outlets for Asian foods. For example, Dallas-based Van’s Kitchen (vanskitchen.com), recently made its four-pack egg rolls with sauce available to convenience stores as a touch-free meal solution. “By providing this product in a new market, we are able to help shoppers conveniently and safely feed their families on the go,” says Belinda Hampton, key account manager. “We are constantly looking toward the next trend of the industry. We can’t give any spoilers, but we are doing research on new products that would be successful in 2021, keeping in mind our consumers’ wants and needs and what is most proﬁtable for our clients.”
FROZEN ASIAN FOOD
Sales in supermarkets, drugstores, mass merchants, military commissaries and select club and dollar stores plus the natural channel for the 12 weeks ended Oct. 4, 2020, according to SPINS.
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Asian Jumps 46% DEC 2020