SIC 2037

This classification covers establishments primarily engaged in freezing fruits, fruit juices, and vegetables. These establishments also produce important byproducts such as fresh or dried citrus pulp.

NAICS Code(s)

311411 (Frozen Fruit, Juice, and Vegetable Processing)

Industry Snapshot

Frozen foods became available commercially beginning in 1930, making this category a comparative newcomer to the U.S. food industry. By 2001 overall retail sales of frozen foods in the United States reached about $26.6 billion. Of this total, supermarket sales of frozen fruit accounted for roughly $200 million, frozen juices for $827 million, and frozen vegetables for $2.9 billion, of which potatoes garnered $1.07 billion.

Consumers receive frozen fruits, fruit juices, and vegetables through two main sales outlets: grocery stores and foodservice. Grocery stores include supermarkets, other retail stores, and the emerging warehouse clubs; foodservice is a highly fragmented market including restaurants, lodging and recreation outlets, separate eating and drinking establishments, health care institutions, colleges and universities, primary and secondary schools, airlines, business and industry, the military, and more. Frozen food foodservice sales, according to the American Frozen Food Institute reached $40 billion in 2001, accounting for roughly 33 percent of total foodservice sales in the United States.

The frozen fruits, fruit juices, and vegetables industry has been greatly influenced by changes in the needs of the American consumer. Single-parent families, two-income families, and growing numbers of women in the workforce fueled the demand for convenience foods in convenient packaging. To compete in this changing marketplace, processors of commodity frozen vegetables extended their product lines with value-added items such as prepared meals, sauced vegetables, frozen entrees, pasta, and vegetable mixes; although changing demographics affected more than new product introductions. Single-serving frozen vegetables were an example of packaging that targeted changing demographic patterns, but they sold well only in stores with a high proportion of singles, or younger and elderly couples for customers.

Organization and Structure

The major producers of frozen fruits, fruit juices, and vegetables were subsidiaries or divisions of diversified, multinational, multibillion-dollar conglomerates. Ore-Ida, a leading producer of frozen potato products in the 1990s, was, for most of the decade, a subsidiary of H.J. Heinz. Minute-Maid, the top frozen orange juice concentrate, was produced by a division of Coca-Cola. Birds Eye, named for Clarence Birdseye, the "father" of the frozen food industry in the United States, was a Kraft General Foods (KGF) brand; KGF belonged to the Philip Morris family of companies. Green Giant was a subsidiary of Pillsbury Co. J.R. Simplot and its Food Group division were the lone privately held companies among the major ones. Alongside these industry giants, smaller newcomers and regional processors carved out significant markets for themselves. McCain Foods USA, for example, laid claim to being the fastest growing frozen food company in the United States in the late 1990s and made a significant step in that direction when it purchased Ore-Ida from Heinz in 1997.

Background and Development

History. Humans have been using cold to preserve food quality for as long as they have been eating. More than 100,000 years ago food was stored in caves, where the temperatures were naturally low. Ice and snow were used to preserve food when they were available. It was not until the twentieth century, however, that scientific re-search into freezing foods really began. The ability to deliver frozen food to consumers is generally dated from October 14, 1924, when Clarence Birdseye received a patent for his revolutionary new apparatus called a plate freezer. A few more years passed before M.A. Joslyn and W.V. Cruess reported the necessity of blanching vegetables prior to freezing.

The industry has advanced steadily since. In 1930 June peas and spinach were the first commercially available frozen vegetables, making their debut in Massachusetts supermarkets. A shortage of tin for cans during World War II spurred the growth of frozen foods. Mechanically refrigerated railroad cars came into use in 1949, and the early 1960s saw the development of individually quick frozen (IQF) foods.

All food preservation systems are designed to prevent deterioration and spoilage during storage. Lowering food temperature decreases or inhibits the speed of chemical and physical reactions that result in spoilage. Microorganisms are a factor in the deterioration of food quality, but microbiologic growth stops when food temperature is reduced to less than negative 10 degrees Celsius. Foods frozen at temperatures as low as negative 40 degrees Celsius were not unusual towards the end of the twentieth century.

Manufacturing. Processors used several methods of freezing foods. High quality could be achieved with individual quick freezing. Its advantages were rapid freezing rates, and the fact that, because food pieces did not cohere into a solid block, individual portions could be stored in large containers. This made it particularly suitable for foodservice. In blast freezing, fans passed cold air over the food. Food could also be frozen between plates containing freezing coils, or by immersion into freezing liquid such as salt solutions, liquid nitrogen, and liquid carbon dioxide.

After a period of steady growth since 1986, the frozen food market dropped in the recessionary 1990s. Even though poundage production was up slightly, production value was down for the first time since 1947, as a surplus of vegetables had lowered prices. Sales in the frozen fruit and juice concentrate sectors were also down.

Current Conditions

Vegetables. The most popular frozen vegetable in both supermarket and foodservice markets has long been the potato. According to the American Frozen Food Institute, frozen food processors handled 8 billion pounds of potatoes on a yearly basis. Of that 8 billion pounds, about 80 percent was used for the beloved french fry. Between 2000 and 2001, supermarket sales of potatoes rose 4.4 percent and accounted for more than one-third of super-market sales. During the same time period, sales of mixed vegetables grew 7.2 percent, and sales of green beans grew 6 percent. As a whole, frozen vegetables grew 4.3 percent to $2.9 billion. However, frozen vegetables in general did not fare as well in the late 1990s and early 2000s as they had in earlier years, due to the growing trend toward fresh produce.

Sales of organic frozen vegetables climbed in the late 1990s as organic foods gained in popularity. Organic frozen food sales in natural-product outlets were estimated to have reached nearly $200 million in the late 1990s. Sales of organic frozen french fries, as well as organic peas, organic corn, organic broccoli, and organic green beans, grew throughout the late 1990s and early 2000s.

In the late 1990s frozen vegetable manufacturers sought to boost sales and to attract consumers by focusing on the healthful aspects of eating sufficient amounts of vegetables and fruits. In 1998 the U.S. Food and Drug Administration had declared that frozen fruits and vegetables were just as beneficial as their fresh counterparts. Since most frozen vegetables were individually quick frozen within hours of harvest, they offered home cooks and foodservice operations the advantages of laborsaving convenience plus nutrient value, no waste, speed and ease of preparation, and year-round availability. The federal government also launched a campaign to motivate citizens to consume at least five servings of fruits and vegetables a day.

Fruits. The U.S. Department of Agriculture (USDA) provides voluntary grade standards for fruits and vegetables to help processors achieve uniform product quality. The best quality fruit is usually either sold as fresh produce or individually quick frozen, which results in a product close to fresh fruit. In the latter process, no sugar is added, and the speed of freezing minimizes ice crystal damage. Factors affecting fruit quality are color, size, blemishes, flavor, firmness, and unwanted portions such as skin, pits, or leaves. In bulk freezing, the fruit is filled into containers and then frozen. Such fruit can be frozen alone or with sugar or syrups added; sometimes fruit is frozen in its own juice.

Supermarket sales of frozen fruit in the late 1990s were $178 million. Among the most popular fruits were strawberries, raspberries, and blueberries. Blueberries significantly grew in popularity in the late 1990s as their antioxidant properties were heavily promoted.

Fruit Juices. The frozen juice segment suffered through the late 1990s and early 2000s as consumers opted for chilled and shelf-stable container juices, which both provided greater convenience to time-constrained shoppers. Juices became available in a variety of nonfrozen capacities, such as in individual boxes, in concentrate form in plastic containers, and in large cans. Domestic supermarket sales of frozen juices fell by 9.7 percent to $827 million in 2001.

To reinvigorate slow frozen juice sales, manufacturers turned toward such strategies as cross merchandising, new packaging, new products, and marketing. Some juice companies attempted to boost the convenience factor of frozen juices in order to lure consumers. Welch's, the grape juice leader, marketed a new frozen juice container that could be thawed in a microwave, thereby decreasing the time needed to mix a container of juice. Other manufacturers focused on one of the strongest selling points of frozen juice—price—and also introduced new flavors. Cross merchandising, such as pairing frozen juices with such items as frozen breakfast items, was also a tactic employed by frozen juice manufacturers.

Industry Leaders

J.R. Simplot Company was one of the largest processors of frozen potatoes in the late 1990s. Best known as a major supplier of french fries to the McDonald's restaurant chain, Simplot also processed fruits and vegetables at plants in California, Washington, Iowa, and Mexico, with more than half of them destined for foodservice use. The privately held Simplot had 1999 sales of $2.73 billion. McCain Foods was also a major processor of frozen potatoes. McCain supplied french fries to Burger King restaurants. McCain, which also sold frozen vegetables through its Ore-Ida subsidiary, had 1998 sales of $3.48 billion.

Another frozen vegetables and fruits leader in the late 1990s included ConAgra, one of the largest and most diversified frozen food manufacturers in the United States. ConAgra offered frozen potato items as well as frozen prepared foods. Its family of brands included Healthy Choice, Banquet, Kid Cuisine, and Marie Callender's. Another giant, Agrilink Foods Vegetable Co., became larger with the acquisition in 1998 of the vegetable operations of Dean Foods. The purchase included the Birds Eye brand, a top frozen vegetable brand. Agrilink also acquired Agripac, Inc., a private-label frozen vegetable manufacturer and exporter. Pillsbury Company subsidiary, Green Giant USA, was another frozen vegetable leader.

America and the World

In the 1990s manufacturers of frozen fruits, fruit juices, and vegetables looked overseas for opportunities to expand. As the U.S. market for orange juice matured in the 1990s, the three leading producers, Minute Maid, Citrus Hill, and Tropicana, were looking to Europe and Japan for increased sales. Exports of frozen vegetables doubled between 1990 and 1996. Frozen potatoes especially enjoyed growing popularity overseas, with exports doubling in the late 1990s. The leading market for frozen french fries was Japan, which accounted for about half of total frozen potato exports. Other countries that imported frozen potatoes from the U.S. included Hong Kong, Korea, Singapore, Mexico, and Brazil. Another popular frozen vegetable export was sweet corn, though export volume fell 1 percent during the first 9 months of 1999. Exports to Japan, the largest market for frozen sweet corn, declined 5 percent, but exports to Canada and China increased.

Research and Technology

In 1989 the Chicago-based Institute of Food Technologists (IFT) named the ten most significant food science innovations to have taken place during its 50-year history. Third on their list was the development of frozen concentrated citrus juices at the U.S. Department of Agriculture research laboratories in the mid-1940s. The addition of approximately 7 percent fresh juice to the concentrate was the key to the product's success. Since that time, processors have further refined the process with the addition of essential oils and natural flavors to the concentrate before it is packaged and frozen. Also making IFT's top ten list was the development of new freezing methods that enabled the prediction of optimal freezing and storage conditions, an important advance because nutrient loss is negligible when foods are properly frozen and stored.

Another breakthrough in the twentieth century was the development of plastic packaging. Among plastic's advantages: it is heat sealable, microwavable, resistant to corrosion, and easily made. More than 80 percent of American households had microwave ovens by the early 1990s, and makers of frozen vegetables and fruits used dual-purpose plastics in packaging that enabled consumers to use either traditional top-of-the-stove cooking methods or the popular microwave ovens.

Agriculturalists in the field of plant breeding were focusing on improving the taste and nutritional value of vegetables used in frozen products, particularly onions, carrots, cucumbers, and garlic.

Further Reading

"Annual Consumer Expenditures Study." Supermarket News, September 1999.

Breyer, R. Michelle. "Juice War." Supermarket News, 3 August 1998.

"Business Linked to Berries Is Not New to Controversy." New York Times, 3 April 1997.

Friedman, Michael. "A Fresh Challenge." Progressive Grocer, 1 October 1998.

Frozen Food Trends. McLean, Virginia: American Frozen Food Institute, 2003. Available from .

"Frozen Foods, Potato & Seafood Sales Figure Prominently in ConAgra Growth." Quick Frozen Foods International, 1 January 1999.

Glaser, Lawrence, et al. "Demand For Frozen Vegetables: A Comparison of Organic and Conventional Products." Frozen Food Digest, 1 February 1999.

"Heinz Cutting 2500 Jobs in Revamping." New York Times, 15 March 1997.

"J.R. Simplot." Nation's Restaurant News, 2 February 1996.

Murray, Barbara. "Promotional Tour will Promote Fruits and Vegetables." Supermarket News, 5 April 1999.

Pierce, J.J. "Frozen Vegetables Bring in the Green While Improving Consumers' Health." Quick Frozen Foods International, 1 April 1999.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from .

"U.S. Food Consumption." Food Review, May 1996.

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