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Organic and chilled foods frozen out
Archived article dated Wednesday January 7th 2009
We ended 2008 talking about consumers shifting to buying cheaper food and at the start of 2009 it is the same story as more evidence shows it is set to continue to be a major trend throughout this year.
By Glynn Davis
The latest figures to support this come from Birds Eye, which increased sales by five per cent and ebitda by 10 per cent during 2008. Its chief executive Martin Glenn put this down to consumers moving away from chilled foods to less expensive frozen goods.
The frozen pea and fish finger is clearly making something of a comeback as shoppers recognise the value in these long-established foodstuffs and turn their backs on chilled. This signifies a major change in buying habits as chilled has been in the ascendency for many years as it has been seen as more fashionable and fresher than frozen.
The latter view was despite the efforts of Iceland founder Malcolm Walker who argued the contrary to anybody who would listen – but not many people did. With slick marketing Glenn is attracting more listeners, helped by the favourable price of frozen.
Ironically, Walker was also an advocate of organic and damagingly once switched all Iceland’s vegetable buying to organic. This was before the public was quite ready for its higher prices and his core customers were simply unable to afford the extra cost.
Today organic still finds it tough to overcome its higher cost base and in these straightened times some shoppers are switching to cheaper alternatives. According to Mintel, organic sales are set to grow 7.5 per cent this year compared with an average of 26 per cent for each of the years between 1993 and 2008.
This still represents decent growth but it is yet another example of consumers stretching their budgets. Expect more of the same throughout 2009.
Tagged as: viewpoint | glynn davis
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