Northbrook, IL -- (SBWIRE) -- 02/08/2022 -- The frozen food market is estimated to account for about USD 244.3 billion in 2020 and is projected to reach a value of about USD 312.3 billion by 2025, at a CAGR of 5.0%. Developments in the retail landscape, rising demand for convenience food, and technological advancements in the cold chain market are the major driving factors for the market. On the other hand, the rising preference for fresh and natural food products is a restraining factor for the frozen food market.

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Market Dynamics:

Drivers: Rising demand for convenience food

The increasing consumer preference toward convenience foods indirectly favors the increasing demand for frozen products as they require less time and effort as compared to cooking from scratch. The processed food market is driven by the greater need for convenience due to the busy lifestyles of consumers. This, in turn, increases the demand for frozen products. Increasing disposable income is also one such factor that has a huge influence on the growth of the frozen food market as it increases the buying power of consumers.

Restraints: Rising preference for fresh and natural food products

To some consumers, frozen food is thought of as a product that is an inferior substitute for fresh food, which is one of the major restraints for this market. There is a notion that food processed a year or more before it is consumed could not be nutritious. However, statements such as "frozen produce can be just as good as the fresh stuff in terms of nutrition" from the US Food and Drug Administration (FDA) and the International Food Information Council (IFIC) about the nutrient content of frozen food are changing the consumer perception. Nutrients such as vitamin C and folate can change with the change in temperature while food items stored at varying temperatures can lose their nutrients. Since frozen foods are stored at a constant low temperature, they do not lose such essential nutrients.

Opportunities: Digitalization of the retail industry

One of the latest trends driving the market is online grocery shopping and the introduction of new apps, making it convenient for consumers to pick their preferred products. Consumers are inclined toward online shopping due to features of convenience and variety. According to Eurostat, in 2018, almost 25% of the population bought food and groceries from online retail channels. With the growing penetration of the Internet and smartphone usage, retail grocery shopping is emerging as one of the platforms for companies to showcase and sell their food products.

Challenges: Lack of cold chain infrastructure in developing economies

Cold chain logistics have proved to be a vital requirement to increase the market share of frozen food in any country. However, developing countries are still lacking in cold chain infrastructure and are unable to supply safe frozen food products to their citizens. Frozen food has a long shelf-life; however, due to lack of infrastructure, the product is wasted easily leading to a loss for frozen food manufacturers. Lack of investment due to the monetary crisis in developing economies has been one reason slowing down the cold chain logistics business. This, in turn, has hampered the frozen food market. Poor infrastructure in cold chain logistics has also directly impacted the import & export business of frozen food products in developing countries such as Bangladesh, South Africa, and Myanmar. However, these developing countries offer a huge opportunity for investment in the market due to the rising acceptance among consumers in urban areas.

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Europe accounted for the largest market share in the market. Population growth, rapid urbanization, and the rise in consumer awareness about the benefits of frozen food are the key factors driving the demand for frozen food in the region.

The key players in this market include General Mills Inc (US), Conagra Brands, Inc. (US), Grupo Bimbo S.A.B. de C.V. (Mexico), Nestle SA (Switzerland), Unilever (Netherlands), Kellogg Company (US), McCain Foods Limited (Canada), Kraft Heinz Company (US), Associated British Foods plc (UK), Ajinomoto (Japan), Vandemoortele NV (Belgium), Lantmannen Unibake International (Denmark), Cargill (US), Europastry S.A. (Spain), JBS (Brazil), Kidfresh (US), Aryzta (US), Kuppies (India), OOB Organics (New Zealand), Omar International Pvt Ltd (India), Bubba Foods (US), Shishi He Deming (China), and Smart Price Sales & Marketing (US), Chevon Agrotech Pvt Ltd (India), and Omar International Pvt Ltd (India).

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