Manufacturers say pandemic gains are likely to stick, prompting the introduction of ever-healthier, more convenient new items. But supply chain issues could slow growth.
Although frozen fruit sales were down 1.9% during the 12 weeks ended Sept. 5 (compared with the same period a year ago), they’re up an eye-popping 39.2% versus the same period in 2019, reports Chicago-based market research firm IRI (iriworldwide.com).
Sales have been evening out since mid to late 2020, says Josh Scheel, sales and marketing vp at Gresham, Ore.-based Scenic Fruit Co. (scenicfruit.com), suggesting current volumes are likely the new normal. “We see no indication that we’ll give back a substantial portion of gains made over the past two years,” he explains, citing new customers who either discovered or rediscovered the category during the pandemic and found better quality and consistency than expected.
“I think people learned a lot about what the frozen food aisle has to offer,” agrees Amelia Houde, marketing manager at Carver, Mass.-based Cape Cod Select (cape
codselect.com). But frozen fruit outperformed other frozen categories thanks largely to its health benefits. With COVID-19 and its variants still lingering, “We’re seeing a big shift toward functional foods,” especially those that boost immunity, she says.
Retailers are also helping grow the category by giving it more space, says Patrick Mateer, co-founder and CEO of Chapel Hill, N.C.-based Seal the Seasons (sealthesea
sons.com), which taps the buy local trend by only selling products in the region where they’re grown. Partly in response to last year’s phenomenal growth, “We’ve seen several major customers give the category another door, creating room for innovative new package formats, and we expect to see others follow suit in the next six to 12 months,” he reports.
“This is just the beginning for this category,” adds vp of sales Serafina Palandech, who sees “oatmilk-type growth” in frozen fruit’s future.
The only obstacle is the supply chain, which has derailed more than one new item on its way to market during the past year or so, says Scheel. As such, “The majority of our growth over the past two years has been driven by core items, mostly single fruit packs,” he says. “We hope to see some easing of issues related to transportation, raw material costs and packaging in 2022,” he adds. But some problems are likely to persist, making it imperative for both retailers and manufacturers to plan ahead.
SMOOTHIES TAKE NEW FORMS
Among the most successful new items that have made it to market are smoothie kits “that take the guesswork out of at-home smoothie prep,” says Scheel. Scenic Fruit’s new multi-pack includes five 8-ounce single-serve blends that carry users through an entire work week. “Our Kale, Avocado, Banana and Pineapple Blend has started gaining traction, so we’re looking to create more innovative flavors,” he says, pointing to new cube technology that will allow the company to incorporate superfruits like acai and graviola not often utilized in frozen fruit blends.
Other manufacturers are rolling out convenient new formats as well. For example, Seal the Seasons recently developed Smoothie Cups made with locally grown fruits as well as adaptogens and superfoods such as matcha and cacao. Consumers just dump the contents into a blender, add their favorite milk and blend. The finished product can go into a glass or back into the cup it came in originally. Sold singly so consumers can experiment with different varieties, the 8- to 10-ounce smoothies come in unique flavors not often seen in the frozen fruit category: Peanut Butter Matcha Cacao, Wild Blueberry Chocolate and Strawberry Cold Brew.
The smoothie cups will begin testing this month at launch partner Park Slope Food Co-op, Brooklyn, N.Y., which encouraged the product’s development. “We’re very excited about it,” says Mateer.
Blendtopia (blendtopia.com) is also upping its smoothie game, reports founder and CMO Tiffany Taylor. On the heels of three keto varieties launched last May, the Nashville, Tenn.-based company is developing three new functional flavors slated for release next June: a super-hydrating post-workout/recovery blend made with coconut water, a blue brain health variety made with blue spirulina, and a fair trade coffee smoothie that offers a healthy alternative to consumers’ daily Frappuccino. “For people who used to make their own smoothies but got tired of it, these include everything that they would’ve added themselves,” says Taylor.
But the biggest news coming out of Blendtopia is its creation of a new smoothie format that’s also uber healthy. According to Taylor, functional nutrition is rapidly becoming table stakes in the better-for-you smoothie segment where consumers expect much more than just some veggies and one or two superfoods. They also want even more convenient formats. “There’s clean, convenient, functional nutrition out there, but nothing portable,” reports Taylor, who says Blendtopia’s new Smoothie Pops have it all.
Expected to debut at Expo West in March and then hit the freezers at Whole Foods in May, the 1.75-ounce yogurt tube-like pops come in three certified organic, dairy-free flavors, each offering a whopping 2 billion CFUs of probiotics per serving: SuperBerry, SuperMango and SuperGreen. Taylor says they’re the only such product made with fruit, veggies and superfoods.
“A smoothie pop won’t fill the same need as a regular smoothie for meal replacement, but it’s healthy snacking — a quick pick-me-up in the car — which is very big right now,” she says. “And they’re great for kids because they’re packed with hidden veggies.” Moreover, the product can be merchandised in the frozen fruit or better-for-you frozen novelties sets where space may not be as tight. “This is the portable healthy snack people have been looking for,” she says.
U.S.-GROWN ORGANICS HIT FREEZERS
While new pre-made smoothie formats are grabbing headlines, there are plenty of folks who still like to make their own from scratch. But until recently, consumers who prefer organic ingredients sourced locally have had few options in the freezer. “Most organic frozen fruit sold in supermarkets today is sourced from all over the world,” reports Palandech. “It’s rare to find organic frozen fruit grown in the U.S.” To fill that gap, Seal the Seasons worked with farmers in the Pacific Northwest and Pacific Southwest to earn organic certification for five SKUs launching now: Oregon Blueberries, Washington Dark Sweet Cherries, California Peaches, California Blueberries and California Strawberries. Two more certified organic SKUs, North Carolina Blueberries and Maine Wild Blueberries, are expected to debut on the East Coast after the first of the year.
Palandech notes that since most organic frozen fruit available currently is offered in small packages, the new SKUs are 32 ounces. Despite the $12.99 price tag, “It’s a significantly better value for heavy users. Plus, we’ve seen consumers migrating to larger formats during the past 18 months, so the demand is there. Everyone we’ve showed it to wants it.”
Cape Cod Select is jumping on the big bag bandwagon as well, says Houde, citing the company’s new 40-ounce Power Berry Blend and Tropical Blend.
Beyond adding in-demand formats, what else can retailers do to maintain frozen fruit momentum? Manufacturers agree that as the third-fastest growing segment during the pandemic, the category absolutely deserves more space. And Taylor recommends retailers bring in more value-added products with additional benefits. “Consumers are wising up, and they’re willing to spend a little more to get a healthier option.”
Palandech couldn’t agree more. “Don’t think of frozen fruit as a commodity,” she says. “It’s a high dollar ring category where premium brands are performing very well.” In fact, she reports, new demographic data reveals that 39% of Seal the Seasons’ customers are $100K+ households with children. “The demand is there, but customers can’t always find those products.