Richard Harrow is the CEO of the British Frozen Food Federation (BFFF). Its mission is to promote and protect the interests of the frozen food industry and campaign with its members to educate, promote and inform consumers, retailers and the food service sector about the value of frozen food. A frozen industry expert, for over 20 years Richard was Managing Director of Freiberger UK, helping build the business to become the UK’s leading supplier of private label frozen pizza. Since 2017, he has worked as a consultant to private label food businesses.
One business success
- Surviving the impact of Covid. The effects were so wide-ranging and varied for the BFFF and our members. On one hand, our retail members and their frozen food suppliers saw their sales jump by 28% at the start of the pandemic, whilst those supplying hospitality saw their sales disappear overnight. As a trade association, we were able to support members with advice and new services whilst also working to make the Government recognise the vital role of the food industry. It was a real achievement to help our members make it through, although many are still suffering from the business equivalent of long covid.
Two challenges for the sector
- Labour supply is a major challenge: labour shortages throughout the food supply chain and at all levels from the factory floor to management are creating a ‘perfect storm’ of increasing costs for our members. Whilst the long-term solution is to train more UK nationals, we will only avoid further disruption to food supplies and cost increases by taking temporary visa measures to let more people work in the UK.
- Managing inflation is going to be a big challenge in the year ahead: higher wages need to be paid for, and this combined with all the other input costs from energy, shipping costs, transport costs, and higher raw materials will inevitability lead to food inflation. Some will argue this is no bad thing with food currently being relatively cheap for many consumers. However, there are many people, even today, that rely on food banks to survive. Surely a disgrace in a modern, rich and industrialised economy such as the UK. 2022 will also see the introduction of Government legislation that will drive costs such as tax changes on red diesel, the plastic tax and new rules around foods that are high in saturated fat, salt or sugar.
Three forecasts for the sector
- Tesco will continue to distance its rivals increasing market share and growing faster than the rest of the big four.
- Discounters will continue to grow and will take market share off the weaker players. Whilst the current ‘Aldi Price Match’ activity of some of the larger grocers may reassure some of their shoppers, it also reminds them that Aldi and Lidl are cheaper across the board. With rising inflation many more shoppers will opt for the discounters as they struggle to make ends meet. The other effect of inflation will be that private label products will start to re-grow as consumers who don’t opt for the discounters look to save money by opting out of brands.
- Frozen food sales will remain strong. After two years of disruption, the retail market is returning to pre-pandemic normal, but the frozen food sector has attracted over 400,000 more shoppers in the last two years. The retail frozen food market is now worth £7.1bn and has added £814m worth of sales since 2019 - that’s value growth of +12.8% and volume growth of +8.1%. With the total grocery market broadly flat, frozen sales have significantly outperformed the market. With many consumers converting to frozen and pressure on prices, I expect frozen sales to continue to do well, especially when they also recognise that frozen has an important role to play in reducing food waste.
March 2022
