Frozen Food Market

The global frozen food market witnessed significant growth over the last few years and is projected to register a 5.68% CAGR during the forecast period. The key drivers fueling the growth of the market are the rising demand for convenience food, the increasing number of working women, and the rapid growth of the organized retail sector. However, the regulatory framework of the frozen food market is set to curb the market growth of frozen food. Nevertheless, the increasing investments in the cold chain market in developing countries and the growing demand for organic products are expected to create lucrative growth opportunities for players operating in the global frozen food market during the forecast period. Market players, mainly the new entrants and small regional players, are faced with the challenge of higher consumer preference for branded products over non-branded, thus limiting their growth in this competitive market.

The changing lifestyles, evolving dietary patterns, and availability of convenience food are factors that play an important role in defining the consumer’s food choices. The growing trend of consuming convenience food began in the western world and rapidly spread to other regions across the globe. Consumers prefer convenience foods as they are easy to consume and have nutritional value, variety, and product appeal. Owing to changing lifestyles, consumers are spending less time on planning and cooking meals at home, as they consider preparing food at home to be a time and energy-consuming process. The increasing consumption of convenience food is driven by the need to create more leisure time, which means that consumers look for options that would help them maximize their free time, doing the things they value more. This, along with the increasing per capita disposable income, is expected to increase the demand for frozen food. Frozen consumables are considered convenient as there is no need to put in a lot of effort to make these products edible. Frozen food can be prepared by simply heating the product in a microwave or oven. Thus, the rising demand for convenience food is expected to drive the growth of the global frozen food market during the review period.

Globalization and growth of international trade, coupled with government support toward infrastructure development for the cold chain sector, are factors that have created growth and investment opportunities in multiple markets. The cold chain logistics market in developing countries is dynamic and continuously evolving. Owing to the current demand-supply gap in the global market, the fragmented cold chain logistics market offers ample opportunities for new entrants to enter the market. Furthermore, cold storage is also a crucial factor and key component of food trade in various countries. Operations in the cold chain market have substantially improved in recent decades. The market has been offering services for a wide range of products, which require storage at certain temperature levels to maintain integrity throughout the transport chain. The development of the cold chain market in emerging economies has led to the establishment of a proper logistical process to maintain shipment integrity. It has enabled the food industry to take advantage of opportunities provided globally. This is expected to create a growth opportunity for the players operating in or planning to enter the global frozen food market during the forecast period.

The regulatory framework includes a broad range of legal instruments and decisions such as licenses, permits, codes, laws, decrees, and even informal measures such as instructions and guidelines. Food Standards Agency (FSA)and other associations are involved in defining guidelines for legal requirements on quick-frozen foodstuffs, including temperatures and labeling for producers, transporters, and retailers. The regulations are different for 'quick-frozen' food and ice-creams and ice-based products. Since January 2006, FSA has set rules in the form of new temperature monitoring instruments used in the transporting, warehousing, and storing of quick-frozen foodstuffs (QFF), which complies with the European standards (EN12830, EN13485, and EN13486). The temperature-monitoring rule was also applied to QFF transported by rail, and business units were expected to maintain all the relevant documents showing that the instruments meet the relevant European standard. The other parameters which form the regulatory structure for frozen food include:

¡ The ingredients which go in the preparation of frozen food should be sound, genuine, and of merchantable quality that are fit for human consumption

¡ The food must be frozen and have crossed the zone of maximum crystallization as rapidly as possible for that type of product

¡ Air, nitrogen, or carbon dioxide are the only cryogenic medium which should come in contact with the food

¡ The temperature on thermal stabilization must be -18°C or colder. This should be maintained except for brief periods during transport (including local distribution) where it may reach -15°C, or when in retail display cabinets where it may reach -12°C

¡ The food must be pre-packed to prevent contamination and dehydration, and the packaging must remain until the food is placed on the market, for instance, quick-frozen fish must be kept in its packaging until displayed for sale

¡ Business units must date temperature recordings and store these for at least one year or longer, depending on the nature and shelf-life of the quick-frozen food

Also, the labeling requirements are crucial in studying the regulatory environment in the frozen food market. The label must cover the following information:

¡ Quick frozen

¡ The date of minimum durability such as ‘best before’ date

¡ The maximum advisable storage time

¡ The temperature or the equipment that should be used to store it

¡ A batch or lot mark

¡ Wording such as ‘do not refreeze after defrosting'

These regulations will determine the safety of frozen food for human consumption. The sole purpose of these regulations is to protect the quality of quick-frozen food. Other legislations deal with wider labeling and commodity-specific requirements. Thus, the regulatory environment restricts the market growth and limits the flexibility of market players to operate and hence, acts as a barrier to market entry as well.

When it comes to food, consumers’ spending behavior is determined by their loyalty toward certain brands. Generally, consumers prefer brands that are recognizable and popular. The frozen food market is fragmented, and consumers usually prefer branded frozen food products over non-branded ones, which creates a challenge for new market players to establish themselves. The increasing instances of government bodies relaxing custom and excise duties on machinery and transport equipment associated with frozen processed food production has led to a reduction in the cost of supply chain operations, which, in turn, is expected to attract national and international brands to enter various product categories. However, the new players need significant capital investments to set up their brand and position their product in a way that draws consumer attention. Thus, branding issues are expected to create a challenge for players operating in the global frozen food market during the forecast period.