German Frozen Food Institute

Dramatic losses in the out-of-home market

The frozen food industry, which has been spoiled for success, is suffering as a result of the ongoing restaurant lockdown.
The frozen food industry, which has been spoiled for success, is suffering as a result of the ongoing restaurant lockdown.

Total sales of frozen food (TK) in Germany recorded a decline of -4.5 percent in volume terms to 3.660 million tonnes in 2020 (3.833 million tonnes in 2019). Total TK sales decreased by -1.8 percent to 15.081 billion euros (15.361 billion euros in 2019). This is the overall result of the sales statistics of the German Frozen Food Institute (dti), which shows the annual development of TK sales and turnover volumes and is divided into the sales channels food retail/home services (LEH) and out-of-home market (AHM).

The frozen food industry, which has been accustomed to success, had to accept a clear setback, which is solely due to the continuing gastronomy lockdown during the Corona pandemic. The development of the frozen food market must therefore be analysed in a differentiated manner according to the two sales markets of food retailing/home services and the out-of-home market - because light and shadow are very close together here.

The increased demand for frozen products and the high level of acceptance among consumers led to an exceptionally good performance in food retailing and home services, although it was not possible to compensate for the sharp downturn in food service.

As a result of the restaurant crisis, per capita consumption (PCV) of frozen food also fell by -2.1 kilograms to 44.8 kilograms in 2020 (46.9 kg in 2019). This is an unprecedented, dramatic decline at this level, and an unusual departure from the trend of the past 30 years.
Deutsches Tiefkühlinstitut

Per household, consumption declined to an average of 89.8 kilograms (94.2 kg in the previous year) of frozen food, a decrease of -4.4 kilograms per household. The trends were caused by the ongoing closures of catering establishments: out-of-home consumption came to a virtual standstill from mid-March to December 2020 and has not yet recovered in 2021.

Home office and homeschooling

In food retail and home services, TK 2020 saw exceptional volume growth of +12.1 per cent. The dti calculated a sales volume of 2,087 million tonnes (2019: 1,861 million tonnes), which is an absolute record sales volume for the entire frozen category in retail. Frozen food sales in LEH/HD increased by +13.4 percent to €9.40 billion (2019: €8.29 billion), clearly exceeding the 9 billion mark for the first time.

Clearly, the Corona pandemic has caused a major shift in dietary and cooking behaviour. Leisure activities and mobility were and have been severely restricted for months. Many households had to stay at home due to the pandemic, and people worked, taught, studied, cooked, baked and ate at home. This is why the frozen goods groups that are best suited for home cooking, such as potato products (+18.2 %), vegetables (+16.3 %) and fish (+15.9%), saw particularly strong growth.

More ready meals

However, more convenience foods (+11.2 %), pizza (+5.8 %) and snacks (+8.2 % ) were also consumed. These popular convenience products in particular helped to cope with everyday provisioning at home: regardless of whether in a single household or a larger family: in the complicated daily routine between home office, homeschooling and childcare, frozen products were the perfect solution for a healthy and varied diet and to relieve the burden of meal preparation.

Baked goods on the plus side

In frozen bakery products, frozen bread and rolls(+14.7%) were the drivers of the positive performance, while frozen cakes and pies were slightly slower. This was mainly due to the fact that birthday parties and family celebrations - if at all - could only take place in a very small circle. Frozen rolls, on the other hand, increased in popularity, not least to keep shopping trips to a minimum. The small product group frozen fruit also grew at an above-average rate of +16.7 percent.

Home services also saw a significant increase in demand: The service of having frozen products delivered directly to the door experienced a renaissance and was able to attract many new customers. During the lockdown, direct-to-consumer continues to be in high demand. Drivers of demand for home services included customers who shied away from going to the supermarket to reduce the risk of infection.

Dramatic losses in the out-of-home market

The out-of-home market (AHM) recorded an unprecedented slump due to corona: the "perennial winner" of the past few years in the TC market had to accept severe cuts for the first time due to the lockdown phases in the various segments of out-of-home catering, which have been ongoing since March 2020.

Sales fell by -20.3 percent to 1,573 million tonnes (1,973 million tonnes in 2019). TC sales in the out-of-home market in 2020 reached a value of 5.68 billion euros and thus decreased by -19.6 percent (7.07 billion euros in 2019). Here, all frozen goods groups were in the double-digit minus range in 2020.

Frozen products are strongly represented in all areas of out-of-home catering. Many companies are unable to develop alternative sales channels for their products. This is not least due to the fact that the container sizes for bulk consumers are much larger than those for end consumers in food retailing. Company canteens and refectories were used to a much lesser extent in 2020, in particular due to the shift of office work and study to the private sphere. School catering suffered immensely from the week-long closures.

Hope for opening soon

In quick-service catering, only limited sales were possible, via pick-up, delivery services and drive-thru concepts. Traditional service restaurants tried to establish themselves with take-away and delivery services, but with significantly reduced sales compared to normal restaurant operations. The entire hotel, leisure, transport and travel catering sector was hit hard by complete closures, the cancellation of events, restrictions on private travel and a sharp drop in business travel. The hopes of the TC industry are therefore directed towards an early opening of the catering industry with the help of vaccinations and rapid tests.