Although the category skyrocketed early in the pandemic, supply chain woes and a lack of innovation have stunted growth since then. But consumer demand remains high.
Compared with the same period a year ago, frozen fruit dollar sales edged up 0.4% during the 12 weeks ended May 15 to $388.92 million while units tumbled 9.4% — the fourth-worst performance (by both measures) among the top 20 frozen department subcategories, according to Chicago-based market research firm IRI (iriworldwide.com).
Why are sales so anemic lately? During the first year of the pandemic when consumers were looking for ways to eat healthy at home, frozen fruit was the third-fastest growing frozen department subcategory, reports Patrick Mateer, CEO of Seal the Seasons, Durham, N.C. “So my take is that frozen fruit [sales] grew a lot in 2020 and 2021, and now supply chains are trying to catch up in order to support that growth,” he says, pointing to frequent out of stocks in the category. Frozen fruit is still “really hot,” he adds. “But until grocers solve the supply chain challenges, they may have trouble supporting additional growth.”
Brady Anderton, chief marketing officer at Salt Lake City-based Tru Fru believes something else is causing the decline. “[Our product] lives in both the frozen fruit and frozen dessert sets, and if there’s one overarching storyline since we showed up three years ago, it’s that both categories have been ripe for innovation for a while now,” he says, citing demand for more snackable products in particular. To that end, Tru Fru continues to expand its line of hyper-chilled chocolate-coated frozen fruit bites, recently adding a new Pina Colada variety featuring pineapple enrobed in white chocolate and toasted coconut.
CONSUMERS WANT SMOOTHIE KITS!
But according to Mateer, Seal the Seasons’ No. 1 most requested product is smoothie mixes. After focus groups confirmed that smoothie kits would likely be a hit with its target audience, the company developed four SKUs that combine locally grown fruit with a variety of functional ingredients. Launching next month, the line includes Plant Protein Mix, Acai Antioxidant, Dragonfruit Probiotic Blend and Super Greens Cleanse, all in 24-ounce bags.
Another big player in the functional smoothie space, Dole Packaged Foods, Westlake Village, Calif., is expanding its Boosted Blends collection with a new Berry Spark variety that combines blueberries, bananas, blackberries, dark cherries, acai and flax. This combination supports brain and cognitive health, helps with memory and focus and is an excellent source of antioxidant vitamin C. The product comes in a 32-ounce bag with four pre-portioned 8-ounce servings.
Category newcomer LiveMore Organics, Newport Beach, Calif., takes the convenience factor up a notch with its certified organic Smoothie Blend Cups. “The cup format is perfect for the individual who wants to eat healthy on-the-go,” explains company co-founder Julia Klein. “Plus, the containers, cups and lids made from paper are all designed to be sustainable while eliminating plastic waste.”
New additions to the LiveMore collection include Pineapple Passion, Pitaya (dragonfruit) in Paradise, Down to Earth and Banana Split, all free of added sugar and artificial ingredients. “We see the smoothie category continuing to grow with more players entering the space,” says Klein. “And we believe the innovation will continue as well, with a huge emphasis on functional smoothies.”
PREMIUMIZATION KEY TO GROWTH
While many new product rollouts have been postponed until supply chain issues are resolved, manufacturers agree that, in order for growth to resume, the category needs to continue to move beyond its commodity roots. Despite rising inflation, “We know that consumers are not backing off on consumption of the more indulgent [frozen fruit] snacks like ours and other brands,” says Anderton. “It’s like they got a taste of the good stuff, and it just makes sense to stick with what is working for them.”
Mateer says consumer demand for specific varieties of different fruits versus “generic” peaches and strawberries reflects a similar trend toward premiumization. To meet that need, he adds, “Retailers will need to develop a more diverse strategy for merchandising, carry more brands and make sure they stay in stock.”
One way to address some of those issues is to source more products locally, says Serafina Palandech, vp of sales at Seal the Seasons, which only sells frozen fruits in the regions where they’re grown. “It reduces carbon footprints, helps local farmers and keeps the shelves full.”