Canadian Frozen Food Sector Grows
Despite Mad Cow and Other Jolts
By MYRON LOVE QFFI Correspondent

Plain fried chicken used to be the rule in Swanson dinners, but now the chicken comes beer-battered. You can bet Pinnacle Foods isn’t crying in its beer!

What with Mad Cow Disease, the SARS outbreak and the rise in value of the Canadian dollar, it has been a challenging year for food businesses north of the US border.

Nonetheless, frozen food sales continue to be strong. Carol Johnston, director of marketing for Pinnacle Foods Canada Corp., reported that the whole prepared frozen meal category grew by 8% last year (as compared to 11% in 2002), while the single-serve segment saw an increase of 9% in sales.

“In our case, Swanson’s has done very well,” she said. “Our Hearty Bowl products (introduced in 2002) registered double digit growth last year, and our Homestyle Hungry-Man Dinner under the Swanson’s label grew by 40%.”

E. Wee, assistant marketing manager for Nestlé Canada Inc.’s Stouffer’s Frozen Meals division, however, noted that after ringing in robust sales in previous years, its growth in the Frozen Meals (Dinners & Entrees) category is slowing down. Stouffer’s continues to experience strong overall expansion of nine percent, she said, outpacing category growth in 2003.

Colin Prince of Wong Wing Foods in Montreal also reported that 2003 was a very good year. “Business really bounced back after 2002,” he told Quick Frozen Foods International. Last year was also a momentous one for McCain Foods, as it added Canada’s largest manufacturer of frozen Chinese entrees to its own stable of companies.

“The acquisition of Wong Wing is an excellent fit with our expanding appetizer business in Canada and the United States,” said McCain Foods Chairman Allison McCain. “We believe that the purchase will complement our recent acquisition of a company in Taiwan that also produces Chinese products.”

The purchase of Wong Wing included a 143,000 square foot factory, production equipment and a number of well established brand name products. The company, which was founded in 1948, has over 300 employees.

Earlier in the year, McCain acquired Bellisle Foods Ltd., also a leading manufacturer of frozen Chinese foods, based in McCain’s home province of New Brunswick. Also, last August, McCain Foods began a $29 million expansion and upgrade of its frozen pizza plant in New Brunswick. The work is expected to be completed by May.

Thin crust, but thick when it comes to toppings – that’s the stuff that Canadian Pizza from McCain Foods is made of.

Mark McCauley, vice president of marketing for McCain Foods, reports that business went very well overall for the company last year. “We had good top-line growth, largely based on new products and accounts,” he told QFFI.

There was one other notable Canadian industry merger. The Quality Meat Group, based in Ontario, acquired Ontario-headquartered Cuddy Foods Ltd. in July.

Kim Powell, production manager for Quality Meat’s foodservice business, reported that although the company’s emphasis is on chicken and turkey, it felt the impact of the Mad Cow crisis that devastated the Canadian beef industry last year. “The availability of chickens became very tight and prices went up,” she said. There may also be ramifications from the bird flu which is sweeping Asia.

One trend she sees is growing demand for turkey products as producers are becoming more successful at educating consumers about the benefits of turkey and creating more of a year ’round demand. She noted that the company introduced a couple of new deli-roasted, buffalo wing-flavored chicken and turkey products in September which are selling nicely.

Mark McCauley reported that consumers continue to demand portability in their foods. McCain’s newest product line, introduced last year, is the thin crust Pizza International Canadian Pizza (toppings are pepperoni, beef with soya, Italian sausage, Canadian cheddar cheese and ham).

Carol Johnson reported that Swanson’s newest Hungry-Man entry has been well received. The Backyard Barbecue package, introduced in September, features chicken breast, boneless pork rib, a meat patty, garlic mashed potato, green beans and a brownie.

Stouffer’s product innovations for 2003 included Bistro Classics and Family Style Recipes. The former features a choice of popular items such as Chicken Alfredo, Chicken Caesar and Steak Teriyaki along with unique offerings including Pesto Grilled Chicken, Stuffed Rigatoni and Duo Southwest Chicken.

The latter feature “just like homemade” recipes – Meat Lasagna, Meatloaf in Gravy, Macaroni & Cheese, Chicken Lasagna – now available in family size servings as well as single-serve packages.
For dessert, Wayne Glowienka, vice president and general manager of Sara Lee Bakery in Ontario, reported that a new New York-style cheesecake for the retail market and upscale cream pies for the foodservice industry have been rolled out.

“We are working on more innovations and additions within our categories,” he said, “but nothing has been finalized yet. Last year was a good year, as sales were up.”

“An aging population will definitely impact changes in consumption habits, in particular, in terms of health and nutrition and leisure and enjoyment,” Wee observed. “Also compressed lifestyles will continue to be the dictum of the times. Time stressed consumers will be in constant search for convenient, simple and easy ways to cook, shop and eat. And ethnicity and cultural diversity in North America has resulted in consumers seeking more adventure with flavors.

McCain Foods’ McCauley also noted that the latest trend in the frozen food industry is products with reduced fat and sugar content, in line with the public’s growing concern about health and obesity. “We view the challenges in the whole area of health and nutrition as opportunities for growth,” he said.