The Frozen in Focus Report

Hello and welcome to the Nomad Foods podcast, a brand new podcast from Nomad Foods, Europe's leading frozen food company and proud owner of European family favourite brands such as Birds Eye, Lado, Idlou, Findus and Frickron. I'm your host Oliver Thomas, head of corporate affairs here at Nomad Foods and I'm inviting you to join me as we take a deep dive into the world of frozen talking to industry experts and company insiders to explore the initiatives, the products and the people looking to take frozen to the next level and setting it up for success over the years to come. Today we're exploring the topics and themes that have come out of Nomad Foods frozen in focus report. This is a first annual report from Nomad Foods looking at the state of the frozen food industry across Europe and providing an insight into what the future might look like for the category. To discuss the findings of the report and more, I'll be joined by Steve Chaluma, our chief marketing officer at Nomad Foods and Alex Hardy, director of consumer and market insight analytics at Nomad Foods. Steve's career in Nomad and frozen food more generally spans more than 25 years and he was appointed Nomad's chief marketing officer in March 2023 following three years as general manager for the UK and I where he was responsible for the bird's eye, armbessies and Goodfellas brands. Alex joined Nomad Foods two years ago and he has extensive client side experience within the world of insights and analytics, having led teams at a global, regional and local level for top FMCG organizations and having worked internationally throughout his career with experience in the UK, Australia, Netherlands and Switzerland. So stay tuned and we'll be right back with Steve and Alex to talk about whether the frozen category is heading for a new Ice Age. Steve, Alex, welcome to the podcast. It's a pleasure to have you both with us today and Steve, as our chief marketing officer, I'm going to ask you straight away, in your opinion, are we entering a new Ice Age? Well, first, thanks for having me on your podcast Dolly. My view would be and of course, I would say this, but yeah, I do think we're entering the new Ice Age. So frozen food is a great category. It stood the time for over 100 years now. When it was invented, it transformed the way we preserve food. And it's a much love stable in Europe, but I think the next 100 years will be even more exciting for frozen food. So yes, I do think we're entering the new Ice Age. Great to hear. And I'm going to turn our attention now straight onto the report frozen in focus that we've launched for the first time as Nomad Foods, where we've gathered consumer data from across Europe surveying more than 7,000 consumers. And perhaps Steve, you can build on your previous answer and first provide our listeners with an overview of why we've launched this report and what we're hoping it will achieve. Well, frozen food is a category we love. So we reach over 60% of households across Europe. And our food is present in over 8 billion meals per year, which is a great privilege to play that role in people's life is also a big responsibility. And Nomad Foods has been around for 10 years now, and we've been on a mission to redefine frozen food, focusing on the great taste, innovation, sustainable sourcing and nutrition value. And I'm sure we're going to get into some of those topics. So we think there's a lot of great things to say about frozen food, but we think also that the categories rather under appreciated as well. So, you know, we've been making some progress, but it's still viewed through a bit of an outdated lens. And there's lots of common misconceptions. I'm sure we'll get into some of these misconceptions through a conversation. But a classic one is that frozen food contains preservatives or is overly processed when the reality is quite opposite. There's freezing's nature's way of preserving food. There's no need for preservatives. So really, that's why we've launched this report. We want to provide insight and inspire those around us and tell our story of why we think frozen food is such a great solution for modern food needs. Frozen is poised for significant growth. The report itself indicates that the total current European market is estimated to be around 55 billion euros. Before we talk about the food itself, let's maybe look at the freezer as an appliance of the kitchen. And I think it was interesting to read in the report that 55% of consumers say they cannot live without their freezer with a further 45% saying it's an underrated kitchen appliance. Alex, if you don't mind, I'll come to you. Why do you think that is? Yeah, I mean, it clearly is a very large category, but it's understandable why it's become such an essential at home. And I guess there's a lot that people do appreciate about frozen food. There's a lot of benefits that consumers tell us about. The ease and convenience that frozen food brings, especially when you're pressed for time or you don't have the confidence to cook is definitely one that comes through. We know a lot about people looking at reducing their food waste, whether it's for sustainability reasons or for saving money. And frozen food is absolutely great for that. And generally, people believe it's really good value for money as a category. So we know there's a lot that people love about freezers. Do we want more space? Yes, I guess people always want more space. And, you know, over the years, actually the average size of the kitchen has come down as we get more smaller households. So the desire for kind of more space, but actually having less room for it is definitely a trend. But I think in terms of where we go with it, I guess probably underappreciated because there's a lot of people that haven't realised all of the benefits that we see with frozen food. And I know Steve has mentioned a couple of those already, but the strong nutrition credentials or the innovation and variety that you find there, I think is perhaps not as well known as it could be with everybody. So I think definitely more room to go on that one. Yeah, absolutely. And you touched on a few themes that we'll talk about shortly. Convenience, though, and in relation to this desire for more freezer space, I can't help but think about the stat around 13% of consumers having directly linked purchasing an air fryer to eat more frozen food more readily. Air fries, to me, is a fascinating one. I have an air fryer. I do use it a lot in conjunction with what's in my freezer, but they've been around for years. So where has this trend come from? Why are we seeing such an association with frozen food outlets? Yeah, it really, I mean, they've been around a little while, but I think the last two or three years have really taken off. And in the UK, there's about two and three households have an air fryer these days, which has kind of come from nowhere, really. And it's one of those valued appliances where it's not like the ice cream machine or the fresh pasta maker that sits in the back of the cupboard. It's on people's work surfaces, and most people are using it at least every week and sometimes every day. So we know it's become part of the kitchen, really. And we know from our own testing that frozen food can be even better when cooked in an air fryer as well. So it lends itself really well to a lot of frozen food. The question as to why it's grown so well, I think, again, the convenience of it, the speed and the ease of cooking with an air fryer can be much more beneficial than putting the oven on and waiting for it to heat up and then to cook. And I think it really took off with particularly where energy prices were going up and people didn't want to put their oven on for 45 minutes or something. A quick sort of 10 minutes in the air fryer was able to work for them. And I think there's also an ease as well, particularly families who've got hungry teens. It kind of passes responsibility to them to kind of keep themselves full up through the day and is kind of quite an easy thing to do. So I think there's a few different reasons why they've really taken off, but they seem here to stay. Well, certainly in my household, that's for sure. And frozen inconvenience, therefore, seem to do hand in hand. But there are other trends that the report highlights in the space of things like snackification, fakeaways. What do our insights show around why these are specific trends in frozen? Are they aligned to particular demographics? And I'm really interested to understand what this means for family mealtimes, something, you know, the traditional setting of sitting around a table, having dinner together. What might these kinds of trends in frozen and maybe food more generally mean for those occasions going forward? Maybe Steve, I'll come to you on that one first. So for sure, these are significant trends for frozen food. And really, they're driven by consumers desire for more experiential mealtimes in home. So it's become less and less about convenience and more around having tasted venture or excitement. And yeah, fakeaways trend is certainly something that we're seeing as some of the Alphome and QSR chains that come across Europe to the UK, countries like France, generate taste excitement and people want to transfer that home and enjoy those flavors at home. And those experiences, whether it's on their own or sharing or in front of a movie, or what have you, because they bring more excitement. And the real benefit that frozen brings is firstly, it's on hand because you can store it in the freezer ready for when you want it. It tastes just as good, if not better, I would say. And it's very flexible. And the air fryer to that extent is an unlocker there because it's enabled that ability to cook a number of different things. So it's definitely a trend we've seen along with, I think the other word you mentioned was snackification. Yeah, what we're seeing there is a real change in habits, especially amongst younger consumers. So the Gen Z millennials. So as you get younger and younger, people are having more fragmented informal meals. And that's something that frozen can really tap into. And what sort of products are we talking about there, Steve? So when we talk about snackification and fakeaways, what might consumers see when they're shopping down the frozen aisle, and they come across different types of products, what would fit into those categories? Maybe there's some examples in our own brands. There are several examples. I'll draw attention to one which is in the UK, we launched a range called Chicken Shop, Birdseye Chicken Shop several years ago. And it's been a huge success. And what that's doing is bringing together a range of products that people might be familiar with that they might have in the QSR in quick servers restaurants and allow you to enjoy that kind of fakeaway experience in the home. So you'll find products like, like a sizzler, fillet burger, for example, or honey, sriracha wings, or a pop called chicken. So you know, spicy flavors, adventurous flavors, very snackable, craveable kind of formats and food. And it's been a huge success for us. I think in the space of two or three years, it's become one of our biggest sub ranges and successes. And it's attracting a new audience to the brand as well, younger consumers, this kind of young adults with no children that wouldn't traditionally buy into frozen or the brand. And that's going to be important for the future for frozen to become more relevant to that audience. Maybe if we touch on the younger generation and younger demographic for a second, clearly there in the report, we also talk around the proliferation of social media and the report references specifically a rise of those influential platforms like TikTok. I read TikTok is now the 12th largest retailer in food and drink online. Where do we see the opportunities in this space, either through marketing, advertising on those platforms, or even how the consumer themselves are actually using that platform to showcase the food they're making at home? Again, Steve, maybe if I tick off with you there. Of course. So the short TikTok as well as other media, with media in general, is fragmenting its highly dynamic. And the way you advertise to shoppers and communicate to them what you're about as a brand and your product, you have to take this dynamic view. So whether it's TikTok, whether it's connected TV, so streaming platforms, we're watching less conventional media channels, people watching less kind of what we call linear TV, the traditional TV channels. There's more streaming platforms like Netflix, Amazon, digital out of home. And then for sure, the social platforms like TikTok, Instagram, they're a big source of inspiration for food. And it's often where food trends start. And people get inspired, especially younger people, to try new products and new flavors. So as a major brand, in particular, if you want to connect with a younger audience and drive a kind of cultural relevance for your brands, you need to be present on these platforms. So that means you need to plan. You need to really think around the consumer journey, the holistic consumer journey in terms of what media people are consuming and when and how to catch consumers in relevant moments. And, you know, I think the chicken shop example, we've got many other examples, is a really great example of that. So we've very much leveraged TikTok with the use of influencers. It's very important that the content that you use on these platforms is native to that platform. If you try and just play a TV ad, people will just thumb past it. So you have to think more creatively, but then also less conventional channels. For example, gaming. So one other thing that we've been investing a lot in to drive awareness of our brand is to advertise within game. So for example, the EAFC, which is, you know, the world's most popular football soccer game that is very popular with younger adults. And we advertise within the game and have partnership with gamers as well. That builds a certain relevance and allows you to catch new audiences. And now let's touch on some of that. I mean, very quickly, are you seeing much in terms of shop of behavior in store versus online purchasing, for example? Yeah, I think just to build on kind of Steve's last response actually from social media. I think what we've seen over the last few years have been how social media has sort of transformed from being just deaf entertainment to being deaf inspiration to now being there for buying and shopping. And so that's where those stats you refer to in terms of color, the growth of TikTok is sort of changing how people are shopping. When we look more broadly against online versus in store, I suppose there's a couple of things people do shop a little bit differently online that has been a bit more habitual shopping lists that sort of are going on that might be a little bit different to what's happening when they visit a regular store. And then what we see with frozen is actually the frozen kind of punches above its weight with online. Mainly for the reason that people put the responsibility on the person delivering it to get their frozen food home still frozen and can be a little bit trickier when you go to an all the stores. So we do tend to see frozen color do particularly well in online versus off. Interesting. And so another area that we looked at in the report is sustainability. And it seems like particularly in the area of food waste, there's a huge opportunity for frozen, especially compared to other areas of the supermarket, like fresh and chilled, you know, frozen naturally gives consumers a solution to wasting less food and therefore saving money. Steve, do we think this is helping dry frozen food to becoming more popular? And are we seeing any trends being reflected in consumer insights or brand messaging, for example, around attracting more consumers to the category because of the opportunity to waste less food? Yes, food waste is certainly one of the benefits frozen is increasingly being recognized for. So in the European Union, it's 59 million tons of food waste is generated every year. And for sure, one of the compelling arguments that we talk about in the report for reducing food waste and embracing frozen food is in that ability to significantly reduce food waste within households. There's nearly half of consumers opt for frozen to help reduce food waste. So we've all been there, right? You do a supermarket shop and you buy some fresh vegetables and life is busy and you leave that bit of broccoli in the fridge. And after a few days, it goes a bit limp and you throw away or that nice fillet of salmon or whatever. So not only does that drive a gill in consumers in terms of the sheer waste that that brings, but it's also a waste of money. And in these more economically challenged times, that's where frozen really comes into its own. So certainly consumers are opting for frozen to reduce food waste, partly for that altruistic reasons. It's the right thing to do, but also for self-interested reasons. It's nearly 60% of consumers say they can save money, they can cut down on waste. And there are benefits for retailers as well, right? So frozen food is a very efficient category to manage. When you compare that with fresh and chilled, that has limited shelf life and has variability in purchase. If it's hot weather, you'll sell more of one thing and the other. And if you order too much or too little, then there's a significant amount of wasted as well. And that's kind of built into the price of ultimately the consumer pays for that as do we from an environmental impact. So yeah, for sure, it's a benefit that's recognized, but we need to do more to ensure that it's pushed as a benefit for the category as well. Yeah. And in terms of doing more to ensure it's pushed as a benefit, that brings me nicely onto the idea around frozen being highly nutritious as a category and a nutritious option for consumers to choose. On the last podcast, we talked a lot about nutrition and the role of nutrition policy specifically in helping drive healthier diets across Europe. From a consumer perspective, though, what are we seeing in terms of health and wellness trends influencing frozen food purchases? In the report, I was really interested to read the gap in understanding around nutritional benefits of frozen. So I think it said the 18 or certainly younger generation, 18 to 24 year olds don't seem to recognize the nutritional benefits of frozen as much or as well as say older age groups or demographics, 55 plus, for example, much higher recognition of the nutritional benefits of the category. Is that a fair assessment? Is that what we're seeing reflected in the insights, Alex? And if so, why do we think there's that gap? And how can the category better bridge that? Yeah, I mean, I think simply might just be down to kind of experience of cooking meals over the years and kind of working out what works and what doesn't with perhaps the older generations. But I think it's fair to say there's a job to do in all generations in terms of getting those nutritional benefits around frozen than what it can bring. I think if you are kind of in the old age group and you've had a family and, you know, you've been cooking these kind of meals for years, you get to realize that to what you're cooking and serving your family. And I think it's probably a big bit about experience there. But I think some of the trends, you know, you refer to kind of some of the trends we're seeing nutrition. I think some of those that are coming through certainly are a lot more about functional health and some of the benefits that people are looking to increasingly from food, whether it's, you know, protein or fiber or gut health and some of these things that we're seeing more and more across more categories in store. We're seeing a lot more emerging around more sort of precision health. So kind of people tracking what they're eating, how much of certain nutrients that they're having or they might be lacking that they might want to do a bit more. And obviously technology is playing a big role there in terms of what we're seeing. And then there's an increase in trend in terms of how people are looking at kind of what's in their food and looking for, you know, cleaner ingredients or things they've recognized and reacting against stuff that they don't recognize and don't want to be having in their food. So some more of a back-to-basics approach. All of those things are happening and I think, you know, all of those things are things that we can certainly look at how we best adopt in frozen food. Yeah, and Steve, building on that from a marketing point of view, how do we maybe look at tailoring opportunities to target more health-conscious consumers versus those that are more convenience-driven? Or is it a unified approach across all our different brands? How does that work from a marketing perspective? I think it's a combination of tailoring for different audiences and targeting new audiences as well. So I think there's a, as mentioned earlier, there are many preconceptions around frozen. Part of it is about overcoming the negative barriers to frozen when it comes to health. So this idea or thought that frozen, well, it's frozen food, it lasts so long. So you must have pumped it with preservatives when the reality is the opposite of freezing is nature's preservative. It's the perfect way to retain vitamins and remove the need for preservatives. In fact, you know, 99% of our range plus has absolutely no preservatives. So there's a reassurance job to be done, but then there's a push and a highlighting of the nutrition goodness. And that's something with our portfolio in Nomad Food, rooted in fish and vegetables, which are categories that people aren't eating enough of. If you take government guidelines across Europe, they should be more fish and vegetables. Well, our fish are meter three, fish fingers, well, it's a great source of a meter three, which is great for brain development. Our vegetables, our peas and spinach, great sources of vitamin C that if you buy frozen, those vitamins are retained versus you buy them fresh. And then over a number of days, they kind of wilt away or they lose their freshness. And our chickens are great source of protein, which, you know, as Alex mentioned, that's a big trend now. So it's partly about our core hero products, the ones that people love us for, and dialing up the nutritional credentials of those products, that people consider them convenience products and family favorites, which is a great foundation, but they're more than that. They're really good food. They're really, really good food. And we're really proud of them. But it's also around innovation as well. So how do you target those more health conscious consumers? And we've got some really exciting innovations coming in the coming months that are specifically designed with very natural ingredients to meet specific needs, for example, for high protein content with very simple, clean ingredient lists, healthy proteins like chicken, two of your five a day, and really tapping into those, especially younger audiences who are looking for the kind of healthier, high protein meal solutions, for example. So it's at both ends. It's through the core famous products and also through innovation as well. So Alex, if I come to you actually on this, so I think our listeners will be really interested to understand in a company such as Nomad Foods, how that journey actually plays out. So what Steve has just talked through there is an insight in terms of what consumer preference, what they're looking for, high protein, highly nutritious meals, and how we then run that through to, without giving anything away, a product that might come later this year, which speaks to a lot of that. From an insights point of view, how do you identify the insights and then have it influence the decision making in terms of either marketing strategy or actually bringing a brand new product to market or tweaking an existing product to act upon those trends? I think our listeners would really appreciate understanding a bit more around that. Sure. I think the first and probably most obvious point is there's no crystal ball about understanding where the future's going to be. It's based on data and where some things are just rooted in very solid foundations, for example, like demographic changes over time. But a lot of it is also about kind of where people's attitudes and behaviours are and what's emerging. So it's very much starting with databaseed view of the future and kind of building a point of view in terms of where we think our consumers will be in the next three, five, 10 years even, and following that. Then we would look to see where do we see any particular issues that we might have or particular opportunities that might be emerging that we think might be attractive. And then it really is a strategic choice as a company to say, well, which ones do we really want to back? And which ones do we keep? Maybe a sort of watching eye on in case things change there really. So trying to put data into something that's quite uncertain really to start with. And then the areas that we do choose, it really does start with the consumer understanding where they are, maybe any sort of needs or opportunities that might be emerging from a particular space. And really from deep consumer understanding means that we could then develop potential ideas that might solve that or address that particular issue. And you know, whether that turns into a piece of innovation or communication brief or anything that we might do that will one day reach our consumers, that's where we would start with really in terms of developing a view of the future and then a really good understanding of where people are and where they potentially might go. Great. And I have to ask you, are there any trends that you're seeing at the moment emerging that it's like you the most? I think we've probably touched on some of these moments. I think the world of health and nutrition is one that jumps out. We've talked a bit about that in terms of some of the trends that are driving there. I think one enduring one really though is about how there's just the joy of food really in terms of kind of people looking for exploring new flavours, new cuisines, you know, talk about air fries, but sort of gadgets from the kitchen that make their life sort of easier and better as well. And whatever market we're in, there are things emerging. So whether it's, you know, people eating more Mexican food or Korean food or whatever it might be, there's always something that people are looking for and either trying to master how they cook it or at least just enjoy it. So I think that's an enduring one, but you know, where they will go in different markets will be interesting one to watch. So Steve, I'm going to turn our attention now to the future and the report looks at some of those future trends and sure enough, we've touched on some of them. But where do you see the biggest growth opportunity for frozen in the next three to five years, either from a trend or specific product point of view? And almost the same question I asked Alex, what's exciting new about the category? Well, I think the thing that excites me, which is a both a challenge and an opportunity is that we're facing into some quite significant demographic trends across Europe. So if we look at what frozen food is most famous for, it's family mealtime favourites that people buy week in week out, whether it's frozen peas or fish fingers or chips, these kind of things. And they're they're great for family mealtimes, but the reality is there's going to be fewer and fewer households with children, you know, the people having less children or they're having children later in life. So what I'm excited about is this opportunity to pivot to make frozen more attractive for adults, both younger adults, those who choose not to have children or before they have children and older consumers as well, you know, post family consumers as well. So that means, you know, making frozen a bit more premium, some more taste adventure. I think, you know, as Alex mentioned, whether it's Mexican Thai, this kind of thing, and we're seeing some exciting products, you know, gyozas and all these different cuisines emerging already, it's making frozen more exciting. But then I think it's also broadening what's available along the lines of what we've discussed. So whether it's that fake away trend, whether it's snack of the occasion, whether it's functional nutrition. So there's a kind of modernization of the offerings of the categories future 30 if you like. And, you know, that's the opportunity to transform it for something that's more convenience and traditional family mealtime led, when that's always going to be important, you need those fundamental products that people love, and they'll always be there. But then to surround that with more inspiring products that make a bit more up to date and more future focused. Brilliant. And Alex, a final question actually to you, particularly in light of everything surrounding AI and the democratization of AI specifically, how do you see data and this world of AI that really it feels like we're at the start of, even though it's obviously heavily involved and everyone's kind of using it, how do you see that influencing how companies like ours and the frozen category kind of understands and serves consumers going forward now, particularly looking at some of those trends that Steve has mentioned and sees as being a part of the category in the next three to five years. What role do you think data and the democratization of AI has in that? Yeah, I mean, as you say, we're right in the midst of it at the moment. I think ultimately it will improve the speed of everything that we're able to do. I think in many cases, it will make things a lot easier than they have been. And I think we've also been kind of looking at well, how can we use it for inspiration as well. So I think all of those things will help us enormously. I'm kind of thinking probably today it takes us, I don't know, 80% of our efforts and our time getting information and data and getting it in the right place and 20% thinking about what we do with it. I would think we'll flip that with AI. So actually, we'll speed things up, it'll make it easier to kind of get stuff together. And we can be spending our time thinking about how best to serve our consumers and what we do with it, which will be much better for us, our consumers and the category I would imagine once we get there. But yeah, we're on the moment is really just exploring what's possible and how we get the most from it. Brilliant. Well, look, I just want to thank you both for your time today. This has been a great conversation. And if any of our listeners want to find out more or read about our frozen in focus report, I would encourage them to go to www.nomadfoods.com/frozeninfocus and we'll include a link in the podcast notes too. But you can find all the details, you can find the full report there, as well as some of the trends and insights that we've talked about on this podcast available to download and share. So for now, thanks again, Steve. Thanks, Ollie. It's been a pleasure. And thank you, Alex. Thank you. And that brings us to the end of this latest episode of the Nomad Foods podcast. Thank you, everyone, for spending your time again with us and listening in. And we hope you'll join us again next time where we'll be speaking to another industry expert or company insider to learn more about the world of frozen food. In the meantime, if you want to find out more about Nomad Foods, please visit our website www.nomadfoods.com. Otherwise, we look forward to you joining us again very soon.