Deep Freeze

Clarence Birdseye must have known what he was doing when he first conceptualized pre-packaged, frozen foods more than 60 years ago. Somehow, the budding entrepreneur, who back then patented several of his food-freezing ideas, clued in to the fact that Americans love a home-cooked meal--but they also love popping something in the microwave and kicking off their shoes while dinner is "served." Yes, The Birdseye Frosted Food Co. was destined for success even before microwaves became second nature.

Through the years, other entrepreneurs have followed suit and helped build a behemoth industry that now gathers $60 billion in annual retail and food-service sales. And while most of those sales derive from the Fortune 500s, there's still plenty of room for entrepreneurs to step up to the frozen-food plate.

"What's driven frozen-food sales is new-product introduction," says Steven C. Anderson, president and CEO of the National Restaurant Association. "A lot of the sales come from larger companies, but a lot also come from entrepreneurs who have a good niche product."

"Niche"--your biggest weapon against the frozen food giants--is the key here. Consider, for instance, the healthy children's cuisine of Fran's Healthy Helpings, the vegetarian entrees of Amy's Kitchen Inc. or the gourmet appetizers of Nancy's Specialty Foods.

"As a $60 million company, we don't have the muscle to compete with the big guys--we're a little fish in a big pond," says Nancy's Specialty Foods creator Nancy Mueller of her Newark, California, company. "We compete by having a distinctive product. If we introduced a product that was already in broad distribution, we'd be stomped out like ants. But the quiche business is small enough that the large companies leave us alone."

This article was originally published in the September 1999 print edition of Entrepreneur with the headline: Deep Freeze.