2014-04-16 12:01:02 - Frozen Food Production in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
The United States Frozen Food Production market´s revenue has grown slowly over the past five years. The industry grew strongly in 2009 as a dip in disposable incomes spurred customers to opt for the inexpensive products the industry provides. However, sales soon declined once unemployment fell and disposable incomes ticked upward. With more money to spend, consumers preferred fresh produce to frozen. Operators responded to this shift in consumer preferences through product innovation that focused on higher quality and healthier ingredients. As a result, revenue is anticipated to grow at an annualized rate of 2.6% to $28.4 billion over the five years to 2013. In 2013 alone, revenue is expected to grow an estimated 2.0% as frozen meals will remain
attractive to time-poor individuals. In addition, the industry will benefit from successful marketing aimed at its products´ healthfulness.
Despite revenue growth in the past five years, industry profit suffered due to rising commodity prices and the cost of sweeping marketing campaigns convincing consumers that its products were healthful even compared with fresh food, the industry´s main competition.
Complicating the matter, operators were unable to pass on the input cost increases through higher prices because consumers were more price-sensitive during the recession. Therefore, profit fell from 3.3% of revenue in 2008 to 3.0% in 2013. As the economy recovers, disposable income increases and quality becomes a larger demand factor, companies will have more leverage to raise prices on premium prepared frozen meals because consumers will pay more for higher quality products. Therefore, profit is estimated to expand to 3.6% of revenue in 2018.
During the next five years, operators will continue to develop products and marketing messages that focus on healthfulness. Further, as more Americans return to work and have less time to prepare meals, they will opt for the convenience of frozen meals.
However, consumers are expected to benefit from a recovering economy and more disposable income, allowing them to buy fresh produce. Such competition will hurt demand for frozen food and, therefore, stifle revenue. Ultimately, revenue is expected to rise 0.4% per year on average to $28.9 billion during the five years to 2018.
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