US Frozen Food Consumption Grows,
But the Numbers Don't All Crunch
By Author

Production and consumption data bases more elusive or incomplete. But it's safe to say that poultry, seafood, entrees, meat and snacks are up, whereas juices are down.

Retail and foodservice consumption of frozen food last year was in the area of 36.6 billion pounds, and value in the area of $55.2 billion. But production, much of which was exported, was considerably greater than that - in the area of 44.7 billion pounds and $69.4 billion.

But what were always iffy figures are now iffier than ever. Until a few years ago, sales reported by market research firms like ACNielsen and Information Resources, Inc. (IRI), covered only supermarkets. Then they added discount stores. But now they are no longer able to do that in any meaningful way, because Wal-Mart, the largest retailer in the United States, refuses to participate.

Except for a brief attempt ages ago by Selling Areas Marketing, Inc. (which later went out of business entirely), nobody has adequately tracked category sales for restaurants and institutions on a regular basis. Frozen food volume there is pretty much a guesstimate, based on production less retail sales and exports. But production data, too, is elusive.

Quick Frozen Foods International has always based its almanac on a mix of production and consumption data from various sources, but we are trying to make a greater distinction this year, especially since some of the traditional sources of production data, like the American Frozen Food Institute's pack book, are no longer available, whereas others may be unreliable or misleading.

Frozen poultry exports reported by the Bureau of the Census, for example, are greater than total poundage of frozen poultry in the Department of Agriculture's year-end Poultry Slaughter bulletin. Two thirds of the citrus juice produced in Florida goes into chilled juice, and a lot of shrimp and fish imported in frozen form show up in supermarket seafood sections as "previously frozen."

Much US production of frozen consumer products, from chicken parts to vegetables, is exported - especially "Bush legs" to Russia and french fries to Japan. There may also be a good deal of duplication in statistics, as when frozen meat, seafood, poultry and vegetables are used as ingredients in frozen dinners. Exact numbers are thus hard to pin down, now more than ever.

Retail (10.1 billion pounds, $23 billion) and foodservice (26.5 billion pounds, $32.2 billion) volume for this year's almanac, for example, are based on IRI market research data and projections from the US Economic census of 1997 - but fudge factors have had to be added in both cases. On the retail side, estimated frozen food volume for Wal-Mart - which operates more than 1,000 supercenters selling frozen food - has to be factored in. On the foodservice side... well those 1997 numbers are pretty old by now.

Supermarket sales of frozen food last year were actually down 1.6% in volume but up 4.7% in value, according to IRI, but with Wal-Mart underselling conventional supermarkets and siphoning off their sales, the reverse may be true for retail sales as a whole. Without hard data, all QFFI could do was add a 10% fudge factor to IRI supermarket data (15% in poultry and entrees, which Wal-Mart really pushes). Still, some category trends were clear from IRI data - frozen poultry sales were up, and seafood sales way up. Also gaining were entrees, meat and snacks and appetizers. Juices were down as usual, and other categories little changed.

As for foodservice, which had been growing at a rapid pace in recent years but had suffered from the economic slowdown last year even before the Sept. 11 terrorist attacks, QFFI has factored in a one percent increase for sales (based on restaurant visit statistics) and a two percent gain in dollar volume (based on reports of higher checks). But with fast food outlets now featuring bargain menus, chances are that if volume grows this year, dollar sales may lag behind or even decline.

On the production side, QFFI counts items that are manufactured, imported or exported in pretty much the same form they are consumed - i.e., chicken parts and fries as opposed to beef carcasses or seafood blocks - although the end-user form may not be frozen. Shrimp from Thailand and other distant sources is imported frozen, for example, but can often be found thawed and repackaged in products like cocktail shrimp rings (Shrimp is so huge a category, moreover, that lower prices there help make for a lower overall frozen food dollar volume). Crabs, which along with lobsters are the highest of high-ticket items, are frozen to begin with but are often sold otherwise. Surimi is generally produced in frozen form, but usually ends up as refrigerated imitation crabmeat. Both poundage and dollar value for imports, raw production and exports are counted this year in overall totals, but not in retail and institutional columns.

Although IRI doesn't specifically report them, it's hardly a secret that a few new brands are energizing the frozen entree market these days. Uncle Ben's rice bowls have made a lot of money and inspired numerous imitations by both rival brands and private label. Uncle Ben's itself has now created a children's bowl meal line. Boston Market entrees, a line spun off from the restaurant chain, have been another hit. Also going after the upscale market are brands like Marie Callender's and Wolfgang Puck - and premium private label.

Skillet stir-fry meals like Birds Eye's Voila are on the upsurge, too, and these days they often include beef or even shrimp. Shoppers are also seeing more organic products under brands like Amy's Kitchen and Cascadian Farms. Once marginal, the category has grown enough to attract even private label attention.