September 13, 2024
6 Things to Consider Before Launching a Frozen Food Line
Consumer demand for convenient, better-for-you frozen food products is growing. According to the American Frozen Food Institute, the category has seen 23% sales growth since 2019 with no signs of slowing down.
While creating a frozen product line is one way for existing producers to diversify their product offerings, it might not be a feasible solution for every company due to the significant capital investment required to establish new freezing processes. To help you determine if the juice is worth the squeeze, we create this quick guide to the top benefits of frozen.
Top 4 Benefits of Frozen Food
- Industry Growth and Market Potential: The frozen food market is booming. According to IBIS World, “Over the past five years, frozen food producer revenue has been climbing at a CAGR of 6.0% and is expected to reach $53.1 billion in 2024, including a 15.2% anticipated surge in 2024 alone. This large uptick during the year can be attributed to the heightened adoption of healthier options in response to increasing health consciousness and dietary restrictions.”
- Expanding Shelf Presence: Expanding into frozen foods offers produce suppliers a unique opportunity to increase their brand’s footprint in stores. You can secure shelf space in both the produce and freezer sections, effectively doubling your brand’s visibility. This expanded presence not only boosts sales potential but also enhances brand recognition among a broader customer base.
- Increased Shelf Life and Reduced Waste: Frozen foods last longer than fresh produce. With a longer shelf life, there is less urgency for products to sell quickly, reducing the risk of spoilage and contributing to a more sustainable operation. This is particularly beneficial as consumers and retailers alike focus on minimizing waste.
- Profitability and Efficiency: The frozen food industry boasts profit margins of around 10%-20%, typically the most profitable grocery category behind fresh produce.
Operational Considerations
There are several key operational requirements to consider when determining if the benefits of expanding into frozen foods outweigh the costs for your business.
- Freezing Processes and Startup Costs: Implementing a frozen product line comes with significant startup costs. This includes acquiring specialized freezing equipment, setting up temperature-controlled storage, and potentially redesigning your production line. For small to mid-sized businesses, these costs can range from $10,000 to over $100,000, all depending on the scale of your operation. The freezing process itself can involve either blast freezing, tunnel freezing, or other methods, each with its own cost and operational implications. It’s essential to factor in these upfront investments and ongoing operational expenses when considering whether to enter the frozen market.
- Packaging for Frozen Products: Packaging priorities and material requirements for frozen food differ from fresh produce. Opaque packaging is a leading design choice in the frozen category (rather than the transparent plastic we see in produce). There are also no barrier requirements, whereas with produce, barrier properties are critical for keeping food shelf-stable. Flexible packaging options, such as roll stock and stand-up pouches, are commonly used for frozen food because they’re lightweight and easy to pack in. They’re especially great for higher volume (value-size) packing and high-quality frozen bags can offer the same durability as cardboard boxes.
Choosing a Strategic Packaging Partner
To successfully enter the frozen food market, it’s essential to work with a packaging partner who understands both the industry and your specific needs. Reliable packaging suppliers with quick lead times, customizable solutions, and innovative material options that meet both performance and sustainability requirements are critical to your success.
It’s a good idea to look for a supplier that can navigate the complexities of sustainable packaging requirements for you and provide adaptable solutions that help you put your strongest foot forward when launching a new line of frozen food.
Start with a Free Packaging Sample
Sev-Rend specializes in providing packaging solutions that are specifically designed to meet the unique demands of the frozen food sector. Not only are we dedicated sustainability partners, but we offer high-quality stand-up pouches and roll stock that help you maximize your brand in stores.