What's Driving the Growth of APAC's Frozen Food Market?
From frozen desserts to appetizers to meals, the frozen section in a modern-day grocery story offers all, and is likely to be the one-stop shop for today’s consumers. The outlook for frozen food has never been better. With changing conversations, consumer perceptions on the rise, if anything the growth across the global markets and Asia-Pacific (APAC), in particular, is on the upswing. Going by industry studies and reports, the APAC frozen foods market was estimated at $57.02 billion in 2018 and is projected to reach $83.46 billion by 2023, at a CAGR of 7.92 percent for the period from 2018 to 2023.
Here are the key trends that will be driving this market this year:
Convergence of Convenience and Health
Though consumers today are health conscious and prefer to cook at home to consume less processed food, there is still a demand for convenience. The increasing availability of frozen products that are high in protein, low in calorie, low fat as well those that address specific dietary requirements such as dairy free, vegan, sugar free, gluten free, plant-based products, is making this segment attractive to customers. With the addition of better-for-you ingredients, frozen food manufacturers will be able to beat some of the barriers to purchase that they have faced in the past. Convenience clubbed with nutritional benefits will be one of the biggest drivers for the segment in 2019.
Globally, the frozen segment is undergoing a renaissance thanks to consumers increasingly choosing premium frozen products on offer in the aisles to try and replicate fine dining food at home. The general consumer perception about premium products is that they are made using high quality ingredients and are better than ordinary products, and this is accelerating the sale of premium frozen food products. Frozen food manufacturers are introducing new products to tap the potential offered by the growing demand for premium frozen food products. Increasing this year will see more chef collaborations, and product innovations that introduce premium gourmet ingredients which, in turn, will significantly contribute to high value milestones for the segment.
Demand for Natural and Preservative-free Produce
Demand for fresh, natural ingredients and produce that is farmed/grown organically is on the rise. However, such products have shorter shelf lives and without the addition of preservatives and stabilizers will be prone to rapid decay and result in waste. But these additives reduce the nutritional value of the product. That's why freezing is rapidly emerging as an alternative to preservatives.
Advance freezing technologies like IQF (Individual Quick Freezing) typically keep the nutrients of freshly picked produce intact, while fresh produce may sit in transport or grocery stores for days, losing nutrients and freshness along the way. In fact, two recent studies compared the nutrient content of frozen fruits and vegetables with their fresh counterparts and found that frozen fruits and vegetables are nutritionally superior or equal to their fresh counterparts.
Increased Adoption by Millennials
According to a study by RBC Capital Markets, sales volumes for frozen have grown for the first time in five years. And millennials are largely responsible for this, spending nine per cent more per shopping trip for frozen foods last year than other groups, according to Reuters. One of the biggest reasons why millennials have taken to frozen food is because they don’t have time to make a full meal with fresh meat and produce.
Frozen meals are also an easy way to control portions, and there’s typically very little waste. In addition to this, the growth of veganism has also helped kickstart sales of frozen goods, with people spending increasing amounts of money on things like meat-free burgers.
The social conscious millennials are also willing to spend more on sustainable products, says a Neilson study, which makes a sector that can fight food waste and provide food solutions that are preservative-free, natural and nutritious all the more attractive to them.
Robust investment in product innovation, which includes developing bold and unique flavors, varieties inspired by world cuisines, product offerings that accommodate special dietary needs, and products with cleaner labels, sourcing and healthier nutrition profiles, is strengthening the market.
In addition to these trends, there is also a rising awareness among consumers around how frozen food can help combat the Global Food Waste problem. While the general perception till now was that fresh is the best, to fight food waste, we need to think again. Globally 40 per cent of the food we produce goes to waste every year. That’s billions of dollars annually lost with widespread implications on sectors like agriculture, FMCG and the overall economy. However, freezing can drastically cut down this waste which is why the manufacturers of frozen food will play a major role in fighting food waste in the coming years. Due to the rising awareness around this global issue, consumers, particularly the millennials, who are driven by social causes are likely to visit the freezer aisle more in the future.