Frozen Processed Food Market Analysis

Frozen Processed Food (Global, 2024)

Introduction

The frozen processed food market has grown considerably, a result of the changing habits of consumers and their growing demand for convenience. This has meant that frozen processed foods have become a more practical solution, without compromising on taste or nutrition. The market is now made up of a wide range of products, including frozen vegetables, frozen meals and frozen meat, all of which can be tailored to meet a variety of dietary needs and trends. Further, improvements in freezing technology and preservation methods have enhanced product quality and shelf life, which has made them even more attractive to health-conscious consumers. In this evolving market, it will be vital for companies to understand the trends influencing consumer behaviour, product innovation and competitive strategy, in order to take advantage of the opportunities that lie ahead.

PESTLE Analysis

Political

In 2024 the frozen food market will be influenced by many political factors, including the government's food safety and quality regulations. The new regulations of the United States Department of Agriculture (USDA) for example require manufacturers to adhere to stricter labeling requirements. The new regulations will have an effect on more than 50% of frozen foods. Also the tariffs on imported frozen foods have been changed. The tariffs on some products have been increased by up to 15%. This will have an effect on the cost structure of companies that rely on imports.

Economic

The economic environment in 2024 will be characterized by the average rate of inflation, which is expected to be around 3.5 percent in developed economies. The price of raw materials, such as vegetables and meats, will rise by an estimated 20 percent, which will be reflected in higher prices for frozen foods. However, the unemployment rate in the United States will remain low, at about 4 percent, which will help to stabilize the frozen food industry.

Social

Surveys show that a majority of people now prefer ready-made foods, and a survey in 2024 shows that sixty-five per cent of people are opting for quick meals because of their busy lives. Moreover, there is an increasing demand for healthy frozen food, with forty per cent of consumers wanting to eat low-sodium and low-preservative food. This trend towards a change in eating habits has led to a change in the food industry, with manufacturers producing new and reformulated products.

Technological

In the frozen food market in 2024, technological progress plays a major role. The automation of the food industry has greatly increased the speed of work, and companies report a reduction in labour costs of thirty per cent following the introduction of robots. In addition, the development of freezing methods such as rapid freezing has improved the quality and life of the products. Recent research has shown that a quarter more nutrients are retained in products frozen in this way.

Legal

Frozen food market is influenced by legal factors such as food safety laws which have become more strict. In 2024, the Food and Drug Administration increased the number of inspections of food processing plants by 10%, ensuring the safety of the food. In addition, a new law was passed, requiring all frozen food products to display the presence of allergens, which influenced the manufacturers' packaging and marketing strategies.

Environmental

The market for frozen processed foods is becoming increasingly concerned with the environment, with the number of sustainable initiatives growing. In 2024, about thirty per cent of frozen food companies have committed to reducing their carbon footprint by a quarter in five years. These companies have also invested in eco-friendly packaging, and fifteen per cent of their products are now being packed in biodegradable materials. Also, water consumption in food production is coming under scrutiny, and new regulations have been passed that require all food producers to reduce their water consumption by ten per cent.

Porter's Five Forces

Threat of New Entrants

The market for frozen food has medium barriers to entry, including a need for considerable capital to be invested in the production and distribution of the product. But the rising demand for fast food and the rise of e-commerce make the industry attractive to new players. The strong customer loyalty to established brands is also a deterrent to new entrants.

Bargaining Power of Suppliers

The suppliers’ bargaining power is relatively low in the frozen food market, due to the availability of numerous suppliers of raw materials. The market is characterized by the wide availability of raw materials that can be gotten from different suppliers, which makes it easy for manufacturers to change suppliers if necessary. This makes the suppliers’ bargaining power over prices and conditions relatively low.

Bargaining Power of Buyers

High — In the frozen-prepared-food market, buyers have high bargaining power, because of the large number of alternatives open to them. Brands and products compete for consumers’ attention, and they can easily switch to other products if they find better prices or quality. The retailing chains also exert pressure on the manufacturers to keep prices low, which further increases buyer power.

Threat of Substitutes

The threat of substitutes in the frozen food market is moderate. Although there are a lot of alternatives to frozen food, such as fresh produce and other foods, the convenience and longer shelf life of frozen foods make them a more desirable product. The trend towards health and organic food, however, does pose a threat to the frozen food industry.

Competitive Rivalry

Competition is intense in the frozen food industry, where there are many established companies. Price, product quality, innovation and marketing strategies are all used by companies to compete. Private labels in the retail sector also intensify competition, offering lower-priced alternatives to branded products.

SWOT Analysis

Strengths

• Convenience and time-saving for consumers.
• Long shelf life, reducing food waste.
• Diverse product offerings catering to various dietary preferences.

Weaknesses

• Perception of lower nutritional value compared to fresh foods.
• Potential for high sodium and preservatives in some products.
• Dependency on cold chain logistics, which can be costly.

Opportunities

• Growing demand for plant-based and organic frozen options.
• Expansion into emerging markets with increasing urbanization.
• Innovations in packaging and preservation technology.

Threats

• Intense competition from fresh food alternatives and meal kits.
• Economic downturns affecting consumer spending on premium products.
• Regulatory changes regarding food safety and labeling.

Summary

Frozen food market in 2024 is characterized by convenience and product diversity, but faces the challenges of health consciousness and logistics. Opportunities lie in the development of the market and the demand for health-conscious products. Competition and economic factors may hinder the development of the industry. Opportunities and threats must be taken into account. Companies should use their strengths to take advantage of the opportunities, and be able to deal with their weaknesses to prepare for the future.