It’s 12 months since the horsemeat scandal broke and caused chaos in the frozen food aisle. But, as the dust settles, some sub-sectors are benefiting and retailers have discovered ways to grow sales. Noli Dinkovski reports

When the horsemeat scandal broke in January 2013, retailers were concerned about the impact it would have on frozen food sales. And rightly so.

Data from Kantar Worldpanel shows that UK-wide sales of frozen ready meals dropped by 13% in the 12 weeks to 14 April as the negative publicity took hold. Frozen burgers fared even worse – plummeting 44% in the same period – as supplies were pulled.

Yet, despite the tumultuous year, there is plenty of evidence to suggest that the frozen food sector as a whole is holding up well. Both retailers and suppliers are reporting strong sales in a number of sub-categories, and product innovation is as rife as ever.

Kay Patel, who owns four Best-one-branded Global Food & Wine stores in London, is one retailer who is happy with how his frozen food offer is being received. In fact, he says a couple of his stores have actually benefited from the horsemeat scandal.

“I considered removing all my beef-based ready meals, but for some reason they kept selling,” he says. “It was strange – I can only guess that because the supermarkets were removing everything, shoppers were turning to us. Now, our sales of cottage pies and lasagnes are better than ever.”

In addition to ready meals, Mr Patel says that frozen desserts and pizzas are also performing well. “It tends to be multipack desserts such as ice creams and £1 pizzas that sell best. Neither offer the best of margins, but you hope people will buy other items along the way too.”

Above all, Mr Patel says that the big growth area in frozen food is pricemarked packs. Again, he concedes that pricemarked margins “could be better”, but maintains that they are a useful way of driving category growth. “They are stuck at around 20% at the moment, but if you mix the freezer with both pricemarked and non-pricemarked items, your margins should average out at 25%,” he says.

Suresh Patel, who runs a Premier store in Upholland, Lancashire, also testifies to the success of pricemarked packs in this category. He agrees that margins aren’t the best, but remains philosophical. “Pricemarking is a useful way of getting customers into your shop, as opposed to the nearest supermarket – and that’s the most important thing,” he says.

Kay Patel says that another way he has increased frozen food sales is via the use of link-deals. It has taken him a long time to work out the most effective offers, he admits, but now he has done so, they are proving lucrative. “One example is a free tub of Rubicon ice cream when you buy a Sharwood’s chicken curry and a Best-one naan. It’s very popular,” he explains.

Given that the link-deal products are unlikely to be situated together, he adds, it’s also important to make promotions easy for customers to identify. “Make sure PoS is displayed where each of the products are. We go as far as to advertise the deals throughout our stores,” he says.

PoS doesn’t just have to apply to deals, say suppliers. It can be used along with a range of other display tactics to bring the frozen food section to life. “Making the most of lighting and promotional material such as floor stickers, banners and barkers, as well as techniques such as brand blocking, will make the section more appealing,” explains Candida Corscadden, head of marketing at frozen pizza company Goodfella’s.

But PoS can only be truly effective if you get the basics right first. Suresh Patel, for instance, says he makes sure his chest freezers are tidied at least twice a day. “Customers move items around, so you need to make sure the chest freezer is kept presentable,” he advises. “You don’t want different products stacked up on top of one another.”

[pull_quote_center]I can only guess that because the super-markets were removing everything, shoppers were turning to us[/pull_quote_center]

– Kay Patel, London retailer

Kay Patel finds that cabinet-style freezers are not quite so high maintenance. He has double-door cabinets at his two larger stores, and despite their size and costly energy output, he says they have proved to be good value. “With cabinet freezers, everything is lit up and easy for shoppers to see,” he explains. “There’s no ice build-up like there is with chest freezers, plus they enable me to use the planograms that Bestway supplies.”

Manufacturers agree that careful planning of ranges and displays is essential in this complex category. Research by Heinz, for example, found two consumer trends in the frozen food market that retailers need to take into account. Customers were found to be relatively risk adverse, highlighting the need to allocate enough space to bestsellers. But Heinz marketing controller Matthew Cullum says shoppers are also now showing greater willingness to engage in “safe adventure”, meaning that it’s worth trialling new products wherever possible too.

“Ensure your freezer reflects the future of the category – give more space to growing segments and recipes, and have a provision of different price points that offer different benefits,” he adds.

After all the category has been through in the past 12 months, it clearly pays to look to the future rather than reflect on the past