Hurricanes and Port Strikes Fuel Frozen Food SurgeThe recent double whammy of hurricanes and a brief port strike has provided an unexpected boost for the grocery industry, particularly in the frozen food category. Shoppers in the Southeast and along the East Coast stocked up on essential items in preparation for the storms, leading to a significant spike in sales across various food and beverage segments.

Frozen Food Frenzy: Riding the Wave of Extreme Weather

Processed Meat Dominates the Frozen Aisle

The frozen food category experienced a notable surge during the weeks leading up to Hurricane Milton's landfall in Florida. Processed meat emerged as the top seller, with unit sales up 7.8% year-over-year and dollar sales increasing by 11.4%. This trend has been consistent over the past year, with processed meat leading the frozen food category with an 8.5% year-over-year rise in units sold and a 6.2% increase in dollar sales.The frozen meat and seafood sectors also saw substantial gains, with meat/poultry units up 2.9% and seafood units up 2.1% in September. Dessert novelties also registered a 3% year-over-year increase, showcasing the diverse appeal of frozen offerings.

Beverage and Snack Slump

While the majority of frozen food categories experienced a boost, not all segments shared in the success. Frozen beverages saw a significant 13.2% drop, and frozen snacks declined by 4.2% compared to September 2023.

Frozen Fruit and Potato Products Shine

Frozen fruit emerged as a standout performer, with a 6.8% year-over-year increase in units sold and a 6.6% rise in dollar sales. Potatoes and onion rings also continued to sell well, with a 4.0% surge in units sold, though dollar sales were down 0.4%. Onion ring unit sales increased by 12.1% year over year, and hash brown unit sales spiked by 6.5%.In contrast, prepared vegetables suffered the most, with a 16.5% drop in unit sales and a 20% decrease in dollar sales.

Meat Maintains Momentum

The meat category continued to deliver positive results in September, generating $7.9 billion in sales, a 5.5% increase compared to the same period in 2023. Pound gains stood at 3.3%, and over a 52-week period, dollar sales are now 3.7% ahead of last year, with pound growth at 1.4%.Fresh lamb led the way with a 10.8% year-over-year increase in pounds sold, and fresh turkey registered a 9.6% pound increase. Every fresh meat category, except for veal, which declined by 4.8%, showed positive pound sales growth.In the ground meat segment, ground chicken emerged as the top performer, with an 8.5% year-over-year increase in pounds sold and an 8.0% rise in dollar sales. Ground turkey and ground beef also experienced solid gains.

Seafood Prices Start to Ease

The seafood market is showing signs of relief, with prices for frozen seafood per pound taking a noticeable dip in September. Shrimp prices decreased by 4.7% year over year, and salmon prices dropped by 4.8%. Fresh seafood prices remained relatively flat, with shellfish falling by 2.7%.Despite the price declines, the average price per pound for fresh seafood ($9.45) still remains significantly higher than chicken ($3.11), pork ($3.16), and beef ($6.83). However, prices for fresh tilapia, cod, shrimp, and crab all decreased year over year.

Ambient Seafood Sees Modest Gains

The ambient seafood category, which includes canned and pouched products, reached $256 million in sales during the four weeks in September, a 1.8% year-over-year increase. Sardines were the top monthly seller, with a 9.9% increase in units sold and a 13.2% rise in dollar sales. Tuna and other ambient seafood sales also saw modest gains.In the fresh/refrigerated seafood segment, pound sales increased by 0.6%, and dollar sales rose by 0.2%. Fresh shellfish pound sales were up 1.2%, while fresh finfish pound sales increased by 0.3%. Trout, cod, and lobster were the standout performers in this category.

Produce Prices Brace for Impact

The hurricanes that swept through the Southeast are expected to have a significant impact on fresh produce prices. While the price for vegetables was down 0.4% year over year in September, the price for fruit increased by 2.8%.Fresh vegetables saw a 2.5% year-over-year increase in units sold, and fresh fruit rose 2.1% in units and 11.0% in dollar sales. Grapes, peaches, and berries were the top-selling fresh fruit items, while cucumbers, broccoli, tomatoes, salad kits, and peppers led the fresh vegetable category.

Deli Meat Struggles Amid Listeria Outbreak

The deli meat category faced a significant setback due to a Listeria outbreak linked to contaminated Boar's Head products. Unit sales of deli meats dropped 9.2% year over year in September, and dollar sales declined by 11.9%. However, other deli categories, such as prepared deli and entertaining deli, performed well, with unit sales up 4.4% and dollar sales up 4.9% and 4.8%, respectively.In the deli prepared sector, prepared meats, pizza, salads, combo meals, and entrees all registered strong year-over-year gains in both unit and dollar sales. Appetizers and desserts also saw modest increases.

Bakery Lags Behind

Both perimeter bakery and center-store bakery categories continued to lag behind year-ago levels in both dollar and unit sales. Center-store bakery was down 1.2% in units and 1.4% in dollar sales, while perimeter bakery fared slightly better, declining 0.2% in units and 0.4% in dollar sales.Croissants, breads, and buns and rolls were the lead performers, but specialty desserts dropped 11.0% in units sold and 9.6% in dollar sales.

Plant-Based Alternatives Struggle to Regain Footing

The plant-based meat alternatives category is showing no signs of a rebound, registering an 8.8% sales decrease year over year in September for both refrigerated and frozen products. Pound sales were down 12.5%, with refrigerated plant-based meat alternatives suffering a 22.8% year-over-year decline in dollar sales.