Vegetables still the heart of the frozen food industry

More than 50 years ago, Wallace McCain, a young Canadian, had a pioneering idea: McCain and his brother Harrison invested in the still relatively uncommon technology for frozen food and began immediately to produce frozen French fries.

“We used to think we could build a business that might make a million dollars,” McCain later said in looking back at his success as an entrepreneur. McCain died in May 2011 at age 81, leaving his wife Margaret and family a fortune estimated at AU$2.2b. The company he founded, and in which he most recently held more than one third of the shares, today employs approximately 20,000 people, produces frozen foods at more than 50 locations and generates an annual turnover equivalent to about AU$6.25b.

Today, frozen potatoes are still among the five biggest product groups in the German market for frozen foods. And in the European market as a whole, they are even bigger than frozen vegetables and hold the undisputed number one position in frozen foods. The trend is moving more towards potato specialities such as rosti, Pommes Macaire and croquettes, however.

The moment considered the real birth of frozen food came on 6 March 1930, when the first frozen food case was installed in a retail shop in the city of Springfield, Massachusetts in the USA.

American marine biologist Clarence Birdseye is credited with the invention of frozen food. While working in the arctic he observed the Inuit freezing fish to conserve it. He saw that the combination of ice, wind and low temperatures almost instantly froze just-caught fish and the fast freezing process prevented ice crystals from forming and ruining the cellular structure of the fish. He found that when the fish were cooked and eaten, they were scarcely different in taste and texture than they would have been if fresh.

Birdseye went on to develop and patent a system that packed dressed fish, meat or vegetables into waxed-cardboard cartons, which were flash frozen under high pressure. Turning to the marketing of the frozen produce, Birdseye tested refrigerated grocery display cases in 1930, and entered a joint venture to manufacture them in 1934. In 1944, Birdseye’s company began leasing refrigerated boxcars to transport the frozen foods by rail nationwide, making national distribution a reality.

Quick frozen vegetables first became available in Australia amidst the food rationing of the war years. In 1949 vegetables were specially grown, processed and frozen in NSW for sale under the Birds Eye brand. Production later expanded to Tasmania.

The popularity of frozen food products made its way from North America to Europe very gradually at first. In Germany, frozen food made a late but attention-getting premiere in 1955 at Anuga in Cologne, where six German exhibitors, pioneers in frozen foods, presented their products for the first time in packaging sizes appropriate for household consumption. And as the appliance technology of German households then steadily improved, demand for frozen food products also increased.

In 1970, per-capita consumption of frozen food in Germany was ten kilograms a year. Last year, frozen food consumption finally broke the 40 kilogram barrier, which corresponds approximately to the average per capita consumption in Europe as a whole.

Frozen food’s continuing worldwide potential

A study in the USA forecasts that turnover with frozen food products will increase by 3.6% annually between now and 2015. In four years, therefore, the total annual revenues should then be nearly AU$135b, compared to slightly over AU$106b in 2010. Opportunities for growth vary from region to region, though.

Americans remain the undisputed top consumers of frozen food in the world, with an annual per-capita consumption of nearly 52 kilograms, a position they have held for years. However, the sector companies see good possibilities of market development especially in eastern Europe and in Asia.

According to Datamonitor’s ‘Frozen food in Australia to 2013’ report, the market for frozen food in Australia increased at a compound annual growth rate of 2.8% between 2003 and 2008.

In Asia the frozen food producers are looking to China in particular, where annual average consumption of frozen food products is currently as low as about three kilograms. With its 1.3 billion inhabitants, the world’s most populous country may well offer the greatest growth potential by a wide margin. Experts expect a total turnover growth of 30% within the next five years, reaching the equivalent of roughly AU$19b. This growth will be helped by a rapidly developing infrastructure with a closed cold chain, and by improved transport and storage capacities for frozen food.

Thanks to increasing prosperity, growing numbers of consumers in eastern Europe are purchasing modern refrigerators and freezers. The market for frozen food in the Czech Republic is developing well, for instance, while Romania and Bulgaria are still lagging behind.

In general, a north-south divide has been evident in Europe for many years in terms of acceptance of frozen food products. Frozen food is especially popular in Scandinavia, while consumers in Spain and Italy are still slowly beginning to appreciate the advantages of frozen products. In Spain consumption rose to 31.9 kg in 2006 - roughly ten kilos more than in 2001. While in Italy, per-capita consumption rose to 16 kg, an increase of over four kilos.

But the steadily increasing variety of products in supermarkets’ frozen food sections, the growing number of working women and the increasing number of single-person households are factors leading to greater demand in the Mediterranean regions of Europe as well. Germany remains the biggest market for frozen food in Europe by far, measured in terms of volume, with annual revenues most recently reaching AU$15.75b.

In addition to French fries, some of the most popular frozen food products among German consumers are fruit, vegetables, baked goods and convenience food. A clear trend in consumer behaviour is toward greater awareness of good nutrition. This is why many producers are eliminating previously standard ingredients such as aromas or other additives, and using cream instead of powdered milk in their recipes for example.

Energy costs and frozen food

The frozen food sector is keen to dispel the prejudiced claim that frozen food has a very bad climate balance sheet. Initial findings of a study jointly conducted by the Freiburg-based Oeko-Institut and the German Institute for Frozen Products (dti) indicate that a blanket judgement of frozen food is not justified from a scientific point of view.

Initial results from the recently launched pilot project showed that frozen food fares just as well as canned, chilled or home-prepared food in terms of climate compatibility even when considering the entire value chain. In terms of baked goods, for example, the climate balance sheet of frozen and non-frozen products is at the same level.

Ethno food

In recent years there has been exceptionally strong development in the ‘ethno food’ segment. For example, the company Mekkafood, which is based in Nettetal in the Lower Rhine region, produces all of its exotic food products with lamb, beef and chicken that has been ritually slaughtered according to Islamic law. The frozen foods produced in line with the strict Islamic rules, such as doner kebab and lahmacun, are certified as ‘halal’, a term that means ‘permitted’ or ‘allowed’ in Arabic and gives Muslims and many other fans of oriental dishes the desired degree of food safety.

The Vion subsidiary Salomon FoodWorld, on the other hand, is focusing on the trend towards Asian cuisine. The Hesse-based company wants to impress the ‘in’ dining establishments, bistros and hotel bars with its servEasy Asia food system. The focus is on Asian products that are not only free of preservatives and artificial aromas, but also come served on a palm leaf in the traditional Asian manner.