Nestlé invests $100M to expand operations at frozen foods factory in SC

Dive Brief:

• Nestlé USA is investing $100 million to expand its frozen foods factory in Gaffney, South Carolina, according to a press release. 
• The facility prepares frozen food entrees for brands like Stouffer’s and Lean Cuisine. The expansion will increase its production capabilities for these brands.
• Frozen food sales soared during the pandemic, gaining 17.4% between November 2019 and November 2020, according to data from IRI and the International Dairy Deli Bakery Association. Many consumers opted for frozen prepared meals as a convenient way to stockpile food or to take a break from cooking three meals a day.

Dive Insight:

Nestlé USA’s factory expansion could capitalize on the continued uptick in frozen food sales. Some of the most popular frozen food items during the pandemic included pizza (37%), vegetables (37%), entrees (27%) and poultry (26%), according to research from The Freedonia Group, which are all core offerings for Nestlé’s frozen food portfolio.

The move also plays into some of Nestlé’s broader growth strategy, steadily shedding lower-performing bands to free up resources to focus on segments that show greater potential.

With the pandemic ebbing in the United States, convenience will continue to be an attractive aspect of frozen foods as consumers readjust to working out of the home and other daily demands. Over one-third of consumers, and 49% of millennials in particular, said they are likely to bring a frozen meal to work for lunch in a survey that Nestlé recently commissioned.

The pandemic also helped frozen food shoppers discover new options. Early in the pandemic, roughly three-quarters of them experienced an out-of-stock tag for their preferred frozen food products, leading two-thirds of them to opt for different items and 72% to try alternative brands, according to an April 2020 survey from the American Frozen Food Institute. A year later, frozen food sales continue their climb. AFFI’s most recent report called frozen foods a “pandemic powerhouse,” hitting $65.1 billion in retail sales in the U.S. last year.  

Ramping up its production capabilities will help Nestlé USA keep pace with its major competitors as the frozen food aisle becomes increasingly crowded. For many years, frozen meals suffered from public perception problems with many shoppers viewing them as low quality and unsatisfying. 

As frozen food makers have honed in on what consumers are looking for out of a frozen meal, perception has changed. One of the major changes that brands like Nestlé, B&G Foods, Conagra and General Mills have made is to focus on healthful offerings and clean label ingredients. Many consumers became focused on health and wellness during the pandemic and shifted their food purchases to reflect more better-for-you options. 

Nestlé has taken other steps to boost its frozen food offerings. During the pandemic, it launched a frozen line called Life Cuisine that caters to low-carb, high protein, meatless and gluten-free eaters. It also debuted a refresh for over half of its Lean Cuisine portfolio, with health-conscious recipes under 400 calories and 10 grams of fat or less. Out of the 18 new Lean Cuisine Bowls launched, 13 featured updated best-selling recipes with 20% more ounces of food as well as five new recipes.

Some of its creative attempts to lure consumers in the frozen food aisle include comfort food dishes like LasagnaMac, which combines two of its classic offerings into one dish. The promotional item is only available this summer.