While many categories in the snack landscape continue to see moderate to impressive growth, relatively speaking, the frozen snack and appetizers category has (if you will forgive the pun) cooled. However, consumers have by no means abandoned the snack and apps section of the freezer aisle, and producers that succeed in delivering on current and emerging consumer preferences can increase their chances of staying hot in the field.

Market data
Companies in the frozen snack and appetizer space saw mixed results during the 12-month period ending April 23, 2023 (according to market data from Circana OmniMarket). While the appetizers/snack rolls subcategory saw an uptick in sales of 12.9% (up to $3.8 billion), the subcategory declined in unit sales, which decreased 3.7% compared to the previous 12-month period. General Mills-owned brand Totino’s (whose innovations include Totino’s X FaZe Clan Buffalo Style Chicken Pizza Snacks, named SF&WB’s Best New Snack Product) was the top-ranked performers in that subcategory, with $848.7 million in sales. Korean dumpling producer CJ performed notably, with its $109.5 million in sales constituting an impressive 49.5% over the previous period.

Source: Circana, Total U.S. Multi Outlet w/ C-Store (Grocery, Drug, Mass Market, Convenience, Military and Select Club & Dollar Retailers), 52 Weeks ending April 23, 2023

Frozen pretzels also saw uneven results for the 12-month period—sales increased 2.9% to 105.7 million, but that increase can be significantly attributed to inflation (unit sales were down a full 8% compared to the previous period). Subcategory leader Superpretzel [EP1] came in at $77.6 million in sales (an increase of 4%), but the producer’s unit sales were down 3.7% from the previous 12-month period.

The frozen breaded vegetables subcategory was down overall, with its $56.8 million in sales constituting a 10.1% decrease from the previous year, and unit sales plummeting 17.1%. Still, the category was not without its bright spots—for example, private label products in the subcategory jumped to $7.5 million, up 31.1% from the year before; unit sales were up a modest 3.5% as well.

Looking back
Johnathan Bonnell, co-founder and co-CEO of plant-based producer Wholly Veggie, says he noticed consumers have boosted their snacking occasions as the world continues to adapt to post-pandemic life.

“Consumers are snacking more as they work from home, [having] entertaining/party snacks, as well as snacks for kids while they are home for summer,” he notes. “50% of snackers snack more than three times a day, and with the rise of work-from-home, the home office is where a lot of snacking happens. Consumers are also beginning to connect more with indulgent claims vs. free from claims—they want their food to taste good and be good-for-you.”

Rebecca Kvam, senior director for snacking at Nestle USA (which owns Hot Pockets and other popular frozen brands), also says the freezer section has remained a popular destination for consumers shopping for food products, including those on the hunt for snacks and appetizers.

“The snacking category has seen tremendous growth over the last few years as consumers turn to the frozen aisle for convenience, value, and comfort. Two trends driving growth: bringing out-of-home dining experiences to frozen meals; and delivering on new eating occasions throughout the day, like ‘smeals’—smaller, snack-sized meals.”

Junea Rocha, chief marketing officer and co-founder of Brazi Bites, says among the challenge producers face is shoppers looking for function, flavor, and other must-haves in their purchases.

“Consumers want the whole package, meaning they seek better-for-you convenience without sacrificing taste and ingredient quality,” she notes. “Being functional without a great tasting experience doesn’t cut it anymore. The demand for gluten-free and grain-free products is also on the rise. Brazi Bites has a highly engaged community, and we have relied more than ever on consumer insights in the past year. These insights have guided us in refining our product assortment and driving our innovation efforts.”

Meghan Ozamiz—director of appetizers, meatballs, and BBQ for Rich Products, and director of Farm Rich—also says the emerging trend of snacking in place of full meals has provided good news for producers. “There’s been a lot of conversations this year around the ‘snackification of America’ and we’re certainly seeing big lifts in snack sales across the CPG industry,” she notes. “Many Americans today use snacks as a way to ‘fuel’ throughout the day or even as meal replacement. Many consumers are now eating smaller snack-oriented portions at least once a day. Farm Rich is a great fit for these needs, with the wide variety of hearty frozen snacks that we offer, particularly our products containing protein.”

Consumers also are looking for frozen treats that offer them new flavors, dining-out quality, clean label, and other appealing attributes—and producers like Laoban have benefited from such trends.

“Our dumplings are made by our co-founder and culinary director, Chef Tim Ma, a five-time Michelin-awarded chef, and there's clearly been a taste for chef-driven products,” says a Laoban spokesperson. “Being able to have that restaurant-quality experience at home is amazing. Our dumplings are incredibly convenient and fun to make at home, and we think actually provide a better and tastier product than you'd get from takeout or delivery. We also use all-natural, premium ingredients like free-range chicken and Berkshire pork and make everything from scratch without preservatives, and I think folks are definitely looking for clean-label, honest foods right now.”

Looking forward
Ozamiz surmises that producers should be mindful of the fierce, plentiful competition in the frozen snack field.

“This category is very competitive with a lot of entrants,” she says. “It’s important to establish yourself and what products you specialize in to maintain space.”

Rocha advises snack makers can connect with consumers by offering adventurous flavors, clean-ingredients, and (above all) delectability.

“Globally inspired flavors continue to increase in popularity as consumers gain curiosity for new flavors rooted in cultural trends and experiences,” she says. “Nostalgia also remains strong, with consumers seeking clean-ingredient products that evoke childhood favorites. Above all, taste remains a top priority for consumers, playing a vital role in attracting new customers and fostering loyalty among existing ones.”

Kvam predicts that as existing challenges endure and new ones pop up, frozen snack and appetizer producers can help consumers by offering options that fit their ever-changing, often unpredictable lives.

“We know consumers are craving convenience and ease as they balance all that life tosses their way,” she comments. “Gone are the times where people sit down for three meals a day or invest time in the kitchen to cook complex recipes they found online. With this in mind, we believe ‘smeals’—not exactly a full meal, but more substantial than a snack—will continue to be a major trend in 2023, given the ease and convenience they provide. Hot Pockets Deliwich, the brand’s first-ever thaw-and-eat sandwich, perfect for on-the-go, is one of the ways we’re starting to enter the space, while exploring opportunities for other brands as well.”

Another move to consider, according to a Laoban representative, is fine-tuning distribution strategy, including e-commerce and other direct-to-consumer avenues.

“We do think the pendulum will continue to swing against the economics of the DTC channel and are really excited about the retail distribution footprint we've built,” they say. “We're interested in building out the RTC (retail to consumer) channel as much as we can—leveraging the online fulfillment capabilities of our retail partners via Amazon/WFM, Instacart, GoPuff, Fresh Direct, etc.”

Bonnell remarks that as consumers seek for more adventure and novelty in their food purchases, producers in the frozen category will continue delivering.

“It’s great to see the category diversifying, with more challenger brands joining the mix and offering new solutions to the frozen aisle,” he comments. “SnowDays, Savorly, Laoban dumplings, GrainTrust, Deep Indian Kitchen, and Feel Good Foods are among some of the brands that we’re loving. Trends such as classic comforts reimagined and international cuisine will continue to grow, with an increase in demand for better-for-you ingredients and sustainable production.” SF&WB

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