Traffic is heating up in the frozen food aisle

One of the fastest growing food segments in Canada, if not globally, is frozen meals and foods.

Statista, a global data and business intelligence platform, finds Canada is a major player when it comes to frozen foods, both domestically and internationally. According to the research firm, quarterly retail sales of frozen foods continue to increase steadily. In 2020, sales peaked at $2.7 billion in the fourth quarter of 2020.

Some 35% of Canadians stated that they cooked frozen food a few times a week on average.

Paul Hogan, vice-president and general manager, Conagra Brands Canada & International says frozen foods, as a category, is valued at $120 million and grew 6% this year over 2022, with Canadians showing a preference for dinners and entrees, ice cream and related products.

According to Statista, retail sales of frozen desserts were forecast to reach just over $35 million in 2021, an increase of almost $8 million since 2014. The frozen bakery products segment was likewise predicted to witness increasing sales.

But it is not just deserts that are bringing Canadians to the frozen foods aisle. Ready-made frozen meals are also a growing segment. The ready-made market is expected to show a volume growth of 5.7% in 2024, according to Statista.

Conagra’s Hogan says one can thank millennials for that growth, as they are the fastest growing consumer of frozen foods.  As more millennial couples now must balance work and growing families, frozen ready-made meals are becoming more attractive. As Hogan notes, multi-serve meals have grown a little over 2% in units since 2020, according to a Nielsen All Channel report in August of this year, with ‘easy to prepare’ being the top motivator for driving millennials to the frozen food section, according to IPSOS.

Jasinda Simpson, category director with Aisle 24, a chain of automated self-serve stores across Canada, says single and couple millennials are a growing market segment for frozen foods in Aisle 24’s operations, and their increasing spending power is driving new food segments in frozen meals, especially those that are healthier and offer new flavours to try, many inspired by world cuisine.

“People are moving away now from ‘conventional’ types of frozen foods meals and are now looking for more healthy option,” she adds. “These include more plant-based and vegan meals, and we are seeing a growing interest in ramen kits, Asian broths and noodles, and Asian-inspired dishes.”

Chuck Arcand, corporate director of Canadian marketing with Core-Mark, adds customers are coming to c-store operations in greater numbers to look for frozen meals, not only for the convenience, but also for the fact that c-stores now offer an ever-growing range of frozen meal options from which to choose from. He points to the growing trend of c-store operators partnering with frozen food providers—such as Parkland Corp.’s acquisition of M&M Food Market in 2022—to enhance their offerings, as well as Core-Marks own work in providing a growing number of healthier options that their c-store partners can offer for sale, including new flavours and spins to traditional items like pizzas.

“Asian fusion is really starting to develop and international flavours [for frozen meals] are ones that people are showing a growing interest in and wanting to try,” he says. “And frozen foods are a great way for them to try them and enjoy them.”

“There is a lot of opportunity in the frozen market, particularly in multi-serve meals as Canadians continue to seek value and convenient meal-prep solutions,” Conagra’s Hogan adds. “We are also seeing the frozen aisle evolve to meet the demand of new immigrants and Canadians looking for diverse flavours which has created a growing pocket of innovation in terms of global cuisines across the frozen category.”

Frozen helping in meal planning, especially during Christmas

While new flavours and healthy options are certainly driving the strong growth in frozen meals in Canada, another reason is that frozen meals are becoming a popular way for Canadians to support their meal planning. Frozen meals are not a substitute for home-cooked meals, but a way to bring to the family meal new and healthy food options at an affordable price.

Hogan says with inflation and the rising cost of living impacting Canadians, frozen meals are a practical way for people to add value to their meal preparation. He says 31% of Canadians point to the ease and convenience of using frozen meals when surveyed by IPSOS, along with the fact that frozen meals were seen to add more healthy options to the family table.

And with Christmas fast approaching, frozen meals and options will be particularly attractive.

Jeff Doucette, general manager, Canada, with Field Agent Canada, a research firm that provides insights into shopping habits and trends, finds that a growing number of Canadians will be turning to c-store frozen food aisle to help in their holiday meal plans.

“We saw a pretty large number of people, some 95%, say they would be making a meal or contributing to a holiday meal this year, and many say they will be contributing to two or more [holiday] meals,” Doucette says. “We found that frozen foods will be a part of that special holiday grocery planning, with 43% saying they would be buying frozen foods for those meals.”

He adds that people are most interested in unique frozen appetizers and desserts to add to the holiday table.

Serge Nadeau, vice-president projects, development with Groupe Beaudry says that when the Christmas holiday starts to come about, it is not uncommon for some of its c-store locations to sell upwards of $1,000 per day in desserts alone. “If I’m receiving a lot of people at my home, I certainly will prepare the turkey and other foods for them, but I may go out and buy a frozen dessert to accompany those meals.”