Low-carb craze may be fueling frozen as well as fresh meat and poultry sales, but seafood boom is driven by cheap shrimp imports – which are drying up after ITC ruling.

Frozen food consumption in the United States may be both larger in dollar terms and smaller in poundage terms than previously believed, according to data from the Department of Commerce as well as projections from market research.

Frozen poultry, meat and seafood were all strong gainers last year, with supermarket sales of 6.9%, 8.8% and 6.6% at a time when most categories were only marking time. Value-added chicken, burgers and meatballs and shrimp are apparently the star performers.

But now that the US Department of Commerce has imposed punitive tariffs on a number of exporters following an International Trade Commission finding that producers of farm-raised shrimp in China and Vietnam have been dumping product at below cost prices, the boom may be over in the seafood category. That will presumably get more people eating more chicken.

Value of US consumption, retail and institutional, is in the neighborhood of $76.348 billion, including major items like shrimp imported frozen but sold otherwise and bread produced frozen but sold otherwise. End-user value may well be even higher on the institutional side, but poundage appears to be lower.

Buffalo chicken wings and other value-added products are popular at supermarkets these days, along with raw chicken parts – often in club packs to compete with discount stores. Meatballs and cheeseburgers as well as plain beef patties have started showing up. Besides shrimp, in sundry counts and forms, there are more frozen fish fillets in once unfamiliar species like tilapia.

Retail figures here for poundage and dollar value – 11.056 billion and $24.330 billion – are based on data for food stores only supplied by Information Resources, Inc. (IRI), Chicago, Illinois. But Quick Frozen Foods International has adjusted food store data upwards 21% for poundage and 19% for dollar value to represent estimated sales at major discount stores – chiefly Wal-Mart. The lower adjustment for value reflects lower prices at discount outlets.

Data for institutional poundage and dollar volume are extrapolated as much as possible from the 2002 US Census of Manufactures, and from a report by Technomic, Inc., also of Chicago, that estimated sales of frozen food through restaurants and institutions were already $40.6 billion in 1999. Technomic hasn’t updated that figure since then, but given the average growth rate, it should have reached at least $49 billion by last year.

Even with a modest markup of 10% from manufacturers’ prices in the census, the value of institutional frozen foods reaches about that mark. Foodservice sales generally were sluggish last year, up about 1.3% according to the National Restaurant Association, and that has been taken into account in extrapolating figures for 2003 from the 2002 census. But census data is sketchy to begin with, as a lot of poundage figures are rough estimates or left out entirely.

Foodservice Trends

According to the NRA, sales last year in the foodservice realm were $421.5 billion. These included $151 billion through full service restaurants, $119.3 billion through fast food outlets, and lesser amounts at bars, lodging places, managed services (commercial or otherwise) at schools, colleges, hospitals and the like, and the military. Frozen food could easily account for more than 10% of that. But the institutional market also includes what might be called the industrial market.

Most frozen concentrated orange juice (FCOJ) is used to make juice sold as refrigerated, and the same is true of other concentrates. A lot of bread and rolls are produced in frozen form for bake-off at both supermarkets and foodservice outlets. It’s the same with fish and seafood – especially shrimp – that is imported frozen but thawed out for sale. Frozen meat, poultry, seafood and vegetables are used as ingredients in frozen dinners and entrees, and frozen fruits and berries go into pies – frozen and otherwise.

Warehouse clubs – sales of which are not counted as retail here – serve a mix of business and individual customers. Thrifty shoppers with lots of freezer space stock up on club packs of basics like frozen vegetables. But small businesses like neighborhood restaurants often buy frozen foods at club stores, rather than have them delivered by foodservice distributors that favor fast food chains over independent operators.

Low-Carb Products in High Gear

There were the usual obvious trends, some of which don’t show up in most statistics – like the low-carb craze. It began in frozen foods, as in other categories, with specialty brands like Atkins and start-up brands with the word “Carb” in them. But the mainstream producers have since gotten on board.

Stouffer’s weighed in this past February with 11 new entrees under its Lean Cuisine brand, such as Steak Tips Portabello with portabello mushrooms in Burgundy wine sauce with a side of broccoli: 10 grams of net carbs. Birds Eye soon joined the fray with low-carb versions of its Voila! stir-fry products like Chicken Teriyaki & Vegetables.

The low-carb trend is going strong and is far from over, according to data reported in IRI’s latest Times & Trends report – Carb-Cutting Shoppers, released August 30. According to IRI, an estimated 26 million Americans are on a low-carb diet today and an additional 70 million are limiting their carbohydrate intake informally, and this is driving sales. Proteins like meat and poultry are favored in low-carb diets, which may explain why both are doing well now in the frozen food aisle.