How Frozen online has changed
The changes in consumer habits during COVID-19 have been well documented in terms of the impact on in-home meals. With the nation’s children eating at home and the shutdown in foodservice and offices, there was a significant increase in home meal occasions.
Collectively, these changes have had a remarkable and continued impact on sales in our category. Still in July as things gradually settle, the market grew an astonishing 17% in value sales. Down from the lockdown peak of 38%, but still an incredible growth rate – and a fertile context within which consumers have reappraised the role of frozen in their households. Some claim they are discovering new exciting frozen food, others being reminded of their love for frozen foods, and others praising frozen food as a creativity enabler. Allied to this, we have seen a surge in the sales of freezers of around 60%, which will lead to higher ongoing capacity at home in the long run.
From a channel perspective, the changes have been no less dramatic, in particular in the proportion of sales going through online shopping. Pre Covid-19, the channel was predicted to grow +43.8% between 2019-2024, with online participation set to increase by 1.7ppts to 7.7% of total grocery sales. However, in the second week of lockdown, online share hit a new record at 7.9%, 0.2ppts ahead of where it had been predicted to be in 2024 already.
In Frozen, this has been even more accentuated: pre-pandemic 9.5% of frozen sales went through e-commerce, rising to 10.4% in the last 12 weeks. Frozen performs very well in e-commerce, given the removal of barriers that would normally be met instore.
This surge in channel demand was generated by both a rise in the number of shoppers using online and a significant increase also in basket spend. Initially, this was challenging for retailers, who didn’t have the capacity to fulfil orders and had to take steps to constrain demand. Indeed, 43% of consumers claim they would have shopped online but the delivery date was far away or unavailable. It is estimated that the share of sales could have accelerated even further to around 10% if the capacity was there. Retailers are working hard to increase their ongoing capacity, with slots available expected to double by the year-end.
Over half of the online shoppers in April were new to the channel in the past year. Although we’ve seen growth across all life stages, the most significant growth in E-commerce has been driven primarily by retirees, with +6.3ppts more retirees shopping online vs. a year ago. It’s predicted that most of these new shoppers are here to stay, with only 26% claiming they will return to pre-lockdown shopping habits, and 55% planning to continue shopping online.
Given the strength of frozen foods in this channel, there is a massive opportunity to double down and leverage the huge growth opportunity – it is critical that manufacturers have strong plans in place to retain the new online shopper.
Take a look at Steve Challoumas latest Webinar Wednesday with the BFFF where he dives deeper into the online channel for Frozen during COVID 19 – Watch