Frozen desserts have been the whipping boys of the pudding market in recent years. Often perceived as an inferior substitute for fresh desserts, heavily price-promoted and appealing to poorer consumers, sales were in decline and suffering from a lack of consumer interest similar to that experienced in other frozen-food categories. Growing concern over healthy eating hit prepared frozen dishes, which were declining in popularity despite high levels of freezer ownership in the UK. However, Birds Eye's high-profile promotion of the benefits of freezing food have helped turn the tide.
Birds Eye's ongoing campaign to change the public's perception of frozen food has helped improve the image of the whole sector. One effect of this is that frozen dessert manufacturers have turned around their fortunes to the point where sales grew in 2007. The fact that brand-owners have adapted their products to tap into consumer trends and several new brands have entered the sector has also sparked fresh interest.
This has led to a growing proportion of premium products made with better-quality constituents and fewer artificial ingredients, tapping into the trend for a more 'homemade' style of dessert.
As a result, in 2007 sales reached a value of £258m and the market returned to growth, according to Mintel. This was the first year the market had improved, but it still has some way to go to rebuild its sales, which have suffered a long-term decline. Even with last year's boost, sales are 9% lower than in 2002.
As well as the obvious range of frozen desserts such as pies, cheesecakes and cakes, this sector includes frozen ready-to-use pastry but excludes ice cream and frozen yoghurts.
UK consumers' taste for a sweet finale to their meal has changed over the years. Desserts such as cheesecakes and gateaux have lost out to hot puddings and smaller cakes and slices. But the health-conscious avoid all these options in favour of yoghurts and fruit.
Sales of pastry rose by about 5% in 2007 to £17m. More people have become interested in cooking from scratch, but as they are still time-poor, frozen ready-made pastry appeals as an acceptable short-cut.
In this era of rampant obesity, more people are trying to eat less sugar and fat as they strive to follow a healthier diet. In 2007, a TGI survey found that 40% of adults were trying to slim. Single-serve desserts appeal to this group and are convenient for single-person households, as well as families where members eat at different times. For dieters, they offer a fixed size which helps in portion and calorie control. In general, though, this sector is not viewed as convenient because of the need to defrost the product before consumption.
New brands have boosted sales, but the market is still dominated by own-label, which accounts for about two-thirds of sales. 'Comfort food' - hot desserts such as crumbles and sponges - have gained in popularity, helped by
Tryton's promotional investment in its Aunt Bessie's range. It has positioned the brand as being closer to home-baked, using only store-cupboard ingredients. Last year the brand posted sales of £167m, having clearly expanded beyond its original Yorkshire pudding territory; in October, the range was redesigned to give it a more traditional look.
Meanwhile, more recent market entrants, such as Pudz, have reinvigorated the hot-eating desserts category by making them more of an indulgent treat. Even the humble pie has been given a premium revamp, often reinvented as a French-style open tart. But in the main, frozen fruit pies remain at the value end, where NPD is rare.
Pudz was launched in 2006 by own-label supplier Greencore. The range of nine desserts includes both hot- and cold-eating variants and traditional options such as Bread and Butter Pudding as well as more modern ones such as Panna Cotta with Raspberry Compote. Another entrant at this end of the market is Swedish tarta specialist Almondy.
As the performance of hot desserts has improved, cheesecake sales have declined. Although the latter have been traditional frozen dessert fare, they have suffered in competition with chilled variants. Frozen desserts designed to be eaten cold have seen some NPD in recent years, particularly at the premium end. One example is the merger of the cereal and frozen dessert categories for the launch of Wall's Frusi frozen pot dessert, which comprises frozen yoghurt, cereal and fruit. It is aimed at health-conscious women; a single dessert counts as half a portion of fruit, and each contains vitamin C and no artificial preservatives.
Meanwhile, Country Style Foods has been expanding in this sector with its purchase of Schwan's production facilities in 2006 and its acquisition of RHM's frozen dessert business from Premier Foods last year.
Nonetheless, the sector remains tough, as shown by premium dessert manufacturer GŸ. It made its first foray into the frozen desserts sector in May last year, followed by a 'strategic departure' this February, when it announced that it intended to focus on the chilled category instead.
Frozen desserts are still not viewed as an essential part of the weekly shop by most consumers - just one in 12 includes them each week, according to BMRB. They are more likely to be bought as an occasional treat or to keep in the freezer as a standby, especially by ABC1s and 45- to 64-year-olds. Men, those without children and 15- to 54-year-olds are the most likely to avoid the category.
The modest improvement in sales during the past couple of years is forecast to continue so that the sector grows 3% to reach a value of £265m by 2012, according to Mintel. However, taking food inflation into account, this is equivalent to a 6% decline, as the change in the nation's eating habits continues to affect the performance of this sector.
Analyst comment
Sitanta Ni Mathghamhna Research analyst, Euromonitor
In recent years, the frozen foods market suffered a considerable decline in popularity due to public perception that the products are unhealthy, especially compared with chilled alternatives.
As an exacerbating factor, for many years products of an inferior quality were over-represented in the sector, which suffered in the face of the twin trends of a shift upmarket and more health-led consumption habits. As a result, sales slipped from £240m in 2002 to £217m in 2007.
Recently, this negative perception has begun to reverse for a number of reasons, including the move into the category by premium brands such as Swedish company Almondy, which offers a range of frozen cheesecakes in a variety of flavours, including Daim and Snickers variants. In keeping with the health trend, the cakes contain no artificial preservatives or colourings.
A second major trend that is driving sales in the category is the frozen pastry, cookie and scone market. Premier Foods has a range of frozen ready-made pastries under the Jus-Rol brand, which includes sweet dessert pastry, puff and filo variants, while Tryton foods introduced Aunt Bessie's range of frozen ready-to-bake products last year with a £1.5m TV ad campaign to promote its frozen scones and double chocolate muffins.
These developments have all contributed to a significant lift in consumer interest. The frozen dessert market showed the most dynamic growth in volume and current value terms of any frozen food sector in 2007, with volume growth of 7% and current value growth of 5%. This trend is forecast to continue, with the category expected to expand in value terms from £217.6m in 2007 to £248.6m.
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