The pandemic has been a decidedly cold and isolating experience. Social distancing and unprecedented restrictions have constrained social interactions. Everyone has felt a bit chilled by the absence of daily human touch.
Ironically, it appears that, when it comes to food, consumers have collectively sought security in frozen foods. According to John Carmichael, the new president and CEO of NestléCanada (and former president of the Foods Division for NestléUSA), the “frozen category has outperformed all other categories [during the pandemic].”
Nestlé doesn’t expect the growth of frozen to abruptly end anytime soon. Company research reveals almost 75% of people plan to buy more frozen foods as eating at home remains the norm, with 69% looking for nutritious frozen foods; 67% seeking comfort frozen, and 54% wanting indulgent frozen items.
Data from Chicago-based market research firm IRI’s retail tracking survey reported that the frozen category produced the highest retail growth +17% for the eight weeks (August-September 2020), compared to the previous year. Frozen ice cream and frozen novelties were amongst the drivers of this dollar growth.
According to IRI, dollar sales within the retail ice cream/sherbet category shot up nearly 16% during the 52 weeks ending Nov. 1, 2020. Frozen novelties grew even faster, +19% during 2020 compared to 2019.
Shifts in the market
Ice cream sales in Canada have, until most recently, been decidedly flat. According to Euromonitor International, a global market research provider, total retail volume sales of ice cream and frozen desserts in Canada grew on average +0.5% annually between 2015 to 2020. Dollar sales growth was just over +1% per year.
However, even before the COVID-19 bump, the tide was turning. While conventional ice cream sales were flat, there were green shoots of growth in niche ice cream segments that appealed to consumers looking for products offering quality, variety, better-for-you ingredients and superior flavour. (see “4 hot trends in the freezer”)
Every dog has its day
Latest data confirms that the frozen foods category renaissance continues, consumers eating frozen foods daily, or multiple times per week. Industry research points to millenials and Gen Z consumers driving growth. This bodes well for a continuation of the overall trend in a post-pandemic environment.
Wondering how far the road may travel and whether to buy-in? Ben & Jerry’s has announced that it has developed a new line of Doggie Desserts, in 4-ounce cups, to be sold in supermarkets and pet stores. Initially, the offering will be two flavours, pumpkin with cookies and peanut butter with pretzels. The doggie-novelties are made with a base of sunflower butter and the same ingredients as its non-dairy human desserts. The idea being that, when pet owners choose to reach for an indulgent frozen pick-me-up, they can also treat their best friend to some cold comfort.
4 hot trends in the freezer
According to DairyFoods.com 2020 State of the Industry, the ice cream category is on fire. However, a comparison of unit and dollar sales in frozen foods overall, and ice cream in particular, highlights noticeably faster growth in revenues. Even private label dollar sales are growing faster than volume. Consumers are seeking out unique, premium-priced offerings in both multi-serve and frozen novelty purchases. For instance, Vancouver-based Betterwith—a premium, high fat product made with traceable milk and single-source ingredients, continues to make inroads with customers.
Vegan frozen dessert maker Oatly, is making waves with a commitment to clean-label and sustainability. In spite of having limited distribution in Canada, and a price pushing $10/473ml, Oatly may prove to be a future player to be reckoned with. The non-dairy frozen dessert segments are smaller, but are also showing strong growth overall. So Delicious makes a variety of non-dairy frozen desserts, as well as a new gluten-free oat-based line. As well, Alberta-based Foothills Creamery brand Screamin Brothers is a premium frozen treat that is made from organic coconut milk. Using only wholesome ingredients, Screamin Brothers offers a safer alternative for those with dietary restrictions: sales of its dairy-and allergen-free frozen treats are up by as much as 25 to 30% per year.
Though growth has slowed recently, the performance of ‘light’ ice cream brand Halo Top has been truly disruptive. Halo Top is available across Canada at big box retailers and specialty stores (the company also recently launched seven flavours of ice cream designed for people following a Keto diet).The combination of indulgence and a low calorie load is a winner for many consumers. For instance, Betterwith brand offers indulgent flavours, lower sugar, reduced calories and a cleaner ingredient deck. Montreal-based CoolWay, has penetrated the mainstream retail channel in Canada. CoolWay’s “guilt-free frozen desserts'' carry one-quarter of the calorie load by replacing sugars and fat with natural sweeteners and clean ingredients.
Older and younger consumers are open to pushing the envelope with non-traditional flavours. For instance Winnipeg-based Chaeban Ice Cream, sold in retail, specialty, and convenience stores across Manitoba, offers a Louis Lavender ice cream with purple berry orchard Saskatoon berries and sage garden lavender. Their Abir Al Sham flavour blends rose and orange blossom water, toasted pistachios, ricotta cheese, and orchid root powder.