Developing a business plan for a frozen food requires a keen appreciation for the unique dynamics of the frozen-food sector. The frozen-foods business includes product entries from vegetables, seafood and meats, baked goods and a wide selection of prepared frozen meals. Large corporate players inhabit the sector, like Bird’s Eye, Stouffer's (owned by Nestle`) and Pillsbury. The frozen-foods business has unique manufacturing, distribution and growth challenges.
All frozen foods require processing to take them from fresh prepared to their frozen state. A frozen-foods business plan must include a plan for manufacturing the product under guidelines imposed by the Food and Drug Administration. The FDA develops policies for the protection of consumer health and safety that includes production for ingredient usage and sanitation to prevent food contamination.
Because the products are intended for human consumption, a frozen-foods business plan must identify sources of its ingredient supply, machinery and equipment for manufacturing and operations personnel and management.
Distribution and Sales
Frozen foods require special carting for local distribution--cold-storage trucks and cold warehouses. The major distribution channel for frozen foods is large supermarkets. The frozen-foods case in stores have limited capacities, so competition for space in the cold case is fierce.
Introduction of new products must always consider the product’s ability to attain display space in the frozen case. Retailers must make a substitution or count reduction of one product to allow for the display of newer entries. Sales growth is achieved by expanding into new territories or new retail outlets within existing territories.
Frozen-foods marketing is primarily aimed at the trade industry. The American Frozen Food Institute (AFFI) is a national trade association representing frozen-foods processors, suppliers and marketers. AFFI’s more than 500 member companies account for more than 90 percent of the frozen foods produced in the United States.
A business plan should include strategies to develop beneficial relationships within the AFFI membership through attendance at industry conventions. The business plan might include a strategy to use trade advertising to introduce a new product into the sector or an effort to increase the display-case real estate for an existing product, perhaps by emphasizing its popularity among consumers.
Consumers come to the frozen-foods sector for primarily convenience of usage and long shelf life. Frozen foods have come a long way from early image of tasteless dinners consumed in front of a TV. Today’s frozen foods increasingly rely on superior taste claims against fresh foods. A broad consumer profile for a frozen-foods buyers might be working women with children.
A business plan must characterize its unique consumer franchise demographically and use that information to formulate goals for growth. The business plan might reflect strategies achievable by appealing to different consumer segments such as single men through advertising and promotion.