Frozen food sales hit $74.2 billion

Frozen food retail sales grew 7.9% to reach $74.2 billion in the past year—an increase of more than $10 billion in the past three years, according to a new report.

Like most grocery categories, the frozen food category’s dollar growth is driven by price increases caused by inflation. In turn, how consumers are shopping for frozen food continues to shift.

According to the Power of Frozen in Retail 2023, a new report commissioned by American Frozen Food Institute (AFFI) in partnership with Food Industry Association (FMI), consumers are paying an average of $4.99 per unit for frozen food items—an increase of 13.5% compared to a year ago, and an increase of 29.6% compared to three years ago.

Meanwhile, unit sales in the frozen food category have declined every month for the past 25 months ending August 2023, the report found. The decline in units for the category averaged 4.9% over the past year. Seafood saw the highest unit decline of 8.4% versus a year ago, followed by meat/poultry, which declined 8.1%.

The report attributed the decline in unit sales in 2023 to consumers buying frozen food less often, whereas high out-of-stock levels were behind unit declines in 2021 and 2022.

Frozen meals and desserts are the largest frozen food categories, bringing in $26.6 billion and $15.4 billion, respectively, in the past year. Fruits/vegetables, seafood and meat/poultry followed with sales of $8.1 billion, $7 billion and $5.7 billion, respectively.

Processed meat/poultry, which raked in $5.2 billion over the past year, saw the highest growth among frozen food categories, achieving 19.6% growth. Fruits/vegetables and baked goods followed, with 10.6% and 9.3% growth, respectively.

In response to inflation, most consumers swap which frozen food brands they buy (43%) and what frozen food products they buy (41%). In fact, more than three-quarters of shoppers (76%) compare prices across brands in stores before they make a selection.

Consumers are also switching up pack sizes to deal with increasing prices, with 44% opting for larger/bulk packs and 20% reaching for smaller packs to save money.

Not surprisingly, price is the top driver of frozen food purchases. Forty percent of shoppers ranked price among the top three reasons they buy frozen food, an increase from 35% of consumers in 2018. Convenience and taste were other top reasons shoppers cited for buying frozen food.

The frozen food category also appeals to consumers who are seeking nutritious options. Nearly three-quarters of shoppers occasionally or frequently look for better-for-you attributes when purchasing frozen foods, the report found.

Consumers most often rely on frozen foods for dinner, with a whopping 81% of consumers reporting they occasionally or often use frozen foods as the main component for their dinner meals. That number drops to 61% of consumers who occasionally or often rely on frozen food for breakfast, and 64% for lunch.

When it comes to branching out in the frozen food aisle, the majority (89%) of shoppers said they’re willing to try a new frozen food item based on a recommendation from a recipe source. Only 69% of shoppers, however, opt for new frozen food products on their own.

Consumers are most willing to try something new when the price is right or there’s a promotion (66%), when a familiar brand launches a new item (47%), or when a family or friend recommends it (38%).