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The global frozen food market size was USD 146.79 billion in 2019 and is projected to reach USD 185.28 billion by 2027, exhibiting a CAGR of 3.1% during the forecast period.
This market is witnessing progressive growth due to the rising demand for convenience food products, on-the-go foods, ready meals, and cold cuts. The hectic lifestyles among millennials and expanding working populations worldwide have played a crucial role in the consumption of ready-to-eat (RTE) foods. This is expected to help in the expansion of RTE foods on a global level. Consumer spending on shelf-stable foods has increased over the past few years. Complementing this is the rise in the employment rate globally. This has facilitated the consumption of RTE and on-the-go foods.
Lockdowns and Less Manpower in Production Plants amid COVID-19 to Hinder Market Growth
The Market for Frozen Food experienced a sudden drop in sales due to the nationwide lockdowns caused by the COVID-19 pandemic. Frozen items along with other essentials were the immediate food products getting sold in the initial days of lockdown due to their longer shelf life. As days passed, there were little to no stocks of these products due to the reduced manpower in production plants. This affected consumers’ buying patterns. People started working from home, which changed the nature of eating. People started cooking their own food as they sought to reprioritize their food expenses. This led to a decline in sales of frozen items. Gradually, lockdowns are being lifted in phases, but the food service industries in various countries are still not fully functional. The majority of the frozen type of food products are utilized by this industry, which is experiencing a major dip in its sales.
On the bright side, the market is expected to revive once people start returning to their busy and hectic schedules, with online food orders leading the charge. For example, according to a report by the BBC, during the pandemic, consumers in the U.S. saw an increase in the online food retailing platforms.
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Rising Consumer Awareness about Online Retailing to Favor Growth
A recent, rapidly-emerging trend among consumers is online shopping. Online retail is one of the major factors fueling the growth of the frozen foods industry. The introduction of various new apps makes it even more convenient for consumers to purchase food products according to their preferences. There are a variety of products available, which attracts the working people as they tend to avoid shopping from retail outlets. According to data published by Eurostat in 2018, around 26% of the population purchased their food products through e-commerce websites or apps. The growing penetration of smartphone usage and the internet is expected to drive the frozen food market growth and to create opportunities for new entrants.
Increasing Women Employment Rate Drives the Market
In recent years, there has been a significant increase in women’s employment rate. Due to the increasing number of employed women, it has become difficult for them to cook or prepare fresh meals every day. This has resulted in the purchasing of ready meals and frozen meals. According to the United States Department of Labor in 2019, women's employment rate in China is 43.7%. Similarly, in the U.S. women's employment rate is 46%, and in South Africa, it is 45%. Further, according to the International Labor Organization, in 2019, the unemployment rate in developed and high-income countries such as the U.S., the U.K., Canada, and Germany has fallen drastically. Globally, 3.3 billion working people worldwide are aged 15 and above. This is a crucial driving factor aiding the growth of the market.
Increasing Demand for Convenience Foods to Boost the Market
The processed food industry is primarily driven by the convenience offered by packaged foods, which attracts consumers from every age group. Consumer preference for convenience and RTE foods has created a rapid change in the global market. Frozen foods require less effort and less time as compared to cooking food from scratch, which is the main factor driving the demand for these products in urban areas. For example, the World Bank estimates that 2/3rds of the world population is expected to live in urban areas. Lastly, increasing the disposable income of consumers is another important reason for the market to flourish in the upcoming years.
Rising Consumer Preference for Natural and Fresh Foods to Inhibit Growth
Frozen foods are considered an inferior substitute to fresh foods among certain consumers, which is a hindrance to this market. There is a myth among consumers that food stored for more than a year loses its nutrition content. However, these myths were dispelled by the US Food and Drug Administration (FDA) and IFIC (International Food Information Council). Frozen food products can be as good as fresh and natural foods. In the case of frozen vegetables, for example, the nutrients are preserved by storing below the freezing point, which ensures that they retain their nutritional value. Increasing consumer awareness about the benefits of frozen food is expected to drive market growth in the upcoming years.
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Frozen Fruits and Vegetables Hold Major Share in the Market
The type segment includes frozen fruits and vegetables, frozen ready meals, frozen meat, frozen seafood, frozen potato products, frozen pizza, frozen bakery products, and others. Among these, the frozen vegetables and fruits segment is expected to hold the major share in the market. This is owing to the extended shelf-life and nutrition content of these products. Frozen vegetables have an advantage over frozen fruits as leafy veggies such as spinach do not require thawing which saves time while cooking. The need for exotic vegetables such as broccoli, corn, legumes, peas, spinach, beans, and others will also drive the market.
Followed by frozen vegetables and fruits, the ready meals segment holds the second-largest market share. This is owing to the demand created by developed countries such as Germany, the U.S., the U.K., France, and Canada for these products. Changes in lifestyle and the busy schedules of people are driving this segment. Mushrooms are becoming popular in the vegetable category owing to their various functional properties. They are found in 8 out of 10 products in a menu and are one of the most commonly used ingredients in pizzas, burgers, and sandwiches.
An increase in the consumption of French fries and other fast food products such as burgers, pizzas, and wedges are expected to play a significant role in the frozen potato products segment.
The frozen seafood and meat product segment is estimated to grow at a significant CAGR owing to the presence of premium products in the aquaculture and cold cut meat domains. Improved palates and increased disposable incomes are the driving factors for this segment.
Frozen baked goods have been attracting more consumers in recent years owing to their taste and freshness. Frozen bread is expected to gain more traction than the other categories in this segment. These baked products consume less time for preparation and do not require thawing. In the upcoming years, this segment is expected to grow at a significant CAGR.
Variety of Product Availability to Promote Supermarket/Hypermarket Sales
The supermarket/ hypermarket industry is continuously changing, and investors are capitalizing on buyers' comforts, offering an easy shopping experience. According to the Food Industry Association 2018, 43% of total grocery in 2017 was sold through supermarkets/ hypermarkets, which represents a major share of frozen foods sales every year. Supermarkets are also focused on meeting new regulatory requirements such as refrigerant leaks, quality assurance to avoid penalties through the Environmental Protection Agency (EPA), and to offer quality products to its consumers.
Europe Frozen Food Market Size, 2019 (USD Billion)
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Europe is expected to dominate the frozen food market share owing to the rising vegan population in the region, which is foreseen to drive the sales of frozen veggies. The major growth factors in the region include high consumer purchasing power, economic stability, and change in food preferences. Further, due to hectic lifestyles, ready-to-eat breakfast products have gained huge popularity. Europe is also one of the most attractive markets in the world, where there is a high growth potential for baked food products and potato products. The sudden outbreak of COVID-19 increased the sales of frozen type of food products in the initial months, which drastically slumped in the following months.
North America is expected to hold the second-largest market share owing to high consumer awareness regarding the benefits of these products. Various regulations have been imposed by the FDA, which minimize the usage of harmful chemicals such as trans fats in processed foods. They require minimum cooking as these products are already prewashed, precut, and then frozen, making them portable and giving them an extended shelf life. These factors are aiding the growth of the market in the region.
Asia Pacific registers significant growth in the global market due to consumer adoption of digital retailing platforms. The increasing number of cold chain facilities in various developing countries is also helping regional market growth. Moreover, an increase in the number of refrigeration facilities in retail shops and online retail is also facilitating market growth in countries such as India, Japan, and China. Urbanization in various Southeast Asian countries is expected to aid tremendous growth in the market.
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South America and the Middle East & Africa (MEA) are expected to grow at a moderate CAGR owing to fewer advancements in the packaging of frozen food and beverages. This makes food products less appealing and less convenient. Due to increasing consumer preference towards convenience foods and fast food consumption, the market is expected to display promising potential in the forecast years.
Kraft Heinz Co. to Focus on Filling the Demand and Supply Gap
Kraft Heinz, a leading market player, is focused on filling the supply and demand gap caused by the COVID-19 outbreak. The company is currently focusing to ensure continuous supply to retail outlets, especially supermarkets/hypermarkets. For instance, in March 2020, the company announced that it is undergoing various seismic changes to fill the demand and supply gap.
Other key players such as McCain Foods, Wawona Frozen Foods, ConAgra Foods, Inc., General Mills, Inc., Bellisio Foods, and Nestle S.A. are focusing on new product developments, innovations, and partnerships to strengthen their presence in the market.
An Infographic Representation of Frozen Food Market
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The market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, types, and leading distribution channels of the product. Besides this, the report offers insights into the frozen food market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD billion)
By Type, Distribution Channel, and Geography
By Distribution Channel
Fortune Business Insights says that the global market size was USD 146.79 billion in 2019 and is projected to reach USD 185.28 billion by 2027.
In 2019, the Europe market value stood at USD 56.17 billion.
Growing at a CAGR of 3.1%, the market will exhibit steady growth in the forecast period (2020-2027).
The frozen vegetables and fruits segment is expected to be the leading type segment in this market during the forecast period.
The increasing demand for convenience food products is the key market driver.
Nestle S.A., Kraft Heinz, and General Mills are the major players in the market.
Europe dominated the market share in 2019.
Rising urbanization is expected to drive the adoption of these items globally.
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