Frozen food 2025: Frozen hit by costs and UPF concerns

Food’s not the only thing that’s been put on ice in the frozen aisle. Rises in employer National Insurance and the national minimum wage have led many businesses to freeze hiring too. A British Frozen Food Federation survey of its members in November found 42% had halted recruitment, while 36% had actively cut their workforce.

And alongside the impact at frozen suppliers, that’s “impacting retailers’ ability to staff stores sufficiently to keep the aisle well-merchandised and well-stocked”, warns Ross Farquhar, marketing, innovation & sustainability director at frozen desserts leader Little Moons. “For a seasonal category like ice cream, you really need store staff replenishing regularly. So, I do think frozen is hurt with the version of inflation that impacts retailers, when they’re having to strip out store hours.”

Little Moons’ team had to spend time in the summer “talking to store staff and asking if we could help merchandise, because it was a really challenging period”, Farquhar adds. Such efforts helped Little Moons keep volumes in the black, just barely, by 1.1%.

Employment costs are only one front in the inflation battle though. Extended producer responsibility is “another bombshell”, says Rupert Ashby, BFFF CEO. As of October, when the scheme kicked in, “some of our companies have bills of £750,000 to £1m”.

And then there’s the rising cost of ingredients. This year’s dry weather meant, “pea harvest yields, for example, were significantly down”, says Ashby. “Usually in July, you would see some big promotions on peas, but this year there just wasn’t the crop. So, those promotions that drive people down the freezer aisle didn’t happen.”

That goes some way to explaining the 3.5% volume decline in frozen vegetables, driven by brands’ 10.9% fall.

It’s not the only sector shedding kilos either. Across the frozen category, inflation “has now started to impact volumes”, says Veena Venkatesan, NIQ lead consultant. The six sectors covered by this report are down a combined 23.3 million kilos.

Negative preconceptions about frozen mean it hasn’t been helped by “growing demand for less-processed, healthier and locally sourced foods”, Venkatesan adds. Frozen products “are losing ground to fresh and chilled alternatives”.

However, “while most big brands have seen declines this year, there are green shoots in particular segments, like McCain in potatoes and Pukka Pies, with growth through successful innovations”, Venkatesan stresses.

In January, McCain launched Vibes in Salt & Vinegar and Firecracker Chilli: ridge-cut potato snacks that air fry in 10 minutes. They rolled into Iceland as part of the retailer’s Brands on Ice accelerator programme.

The range has since added variants and bagged listings in Tesco, Sainsbury’s and Morrisons. It was supported by a campaign in May in which Gen Z actors debated whether Vibes were crisps or chips.

The lineup taps a “really exciting opportunity” in younger generations looking for new experiences from the freezer aisle, says Ashby. “Our research shows 25 to 35-year-olds want the freezer aisle to change. They’re telling us: ‘Make us try new stuff, because we’re excited about it and want innovation’.”

A more appealing frozen aisle

Part of the challenge lies in making the freezer aisle itself more appealing. “Presentation in fresh is all very attractive, but the frozen aisle is historically a wall of glass, some of it frosted up. It doesn’t make you want to go down there,” Ashby adds.

It’s a barrier that Pukka Pies is striving to break. “We want the aisle to be more of a shopper destination,” says CEO Isaac Fisher. “We work closely with retailers and invest in fully branded Pukka bays and PoS, to bring excitement and visibility.”

The brand also engages in “demand-driven NPD”, she adds. In February, for instance, it launched the “globally inspired” chicken Katsu Curry Pie.

Birds Eye too “recognises a need to attract younger demographics to categories where they traditionally under-index”, says a spokesperson. Its efforts to do so have included adding Get Real high-protein microwavable ready meals in September.

Young’s has taken a different tack, targeting the inflation-fuelled fakeaway trend with Jumbo Fish Special, a pack of two 240g pollock fillets launched in September.

The “massive” fillets “rival the quality and portion size of a fish and chips takeaway”, says Iain Lowrie, category insight director at Young’s owner Sofina Foods Europe.

The hope being it’ll be appealing enough to help thaw frozen’s fortunes.