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Functional Foods: Fad or Opportunity?

Many consumers are adopting holistic attitudes to health, wellness, and nutrition. They no longer seek to just “eat healthy” and now choose to eat for overall health and wellness. According to IRI data, 37% of consumers say “food is a better medicine than medicine.” Increasingly, more and more consumers want foods and beverages to be multi-functional and nutrient-dense.

What are functional foods?

Depending on who you ask, functional foods have varying definitions. Nutritionists and dietitians separate functional foods into two categories:

  • Conventional foods are natural, whole foods that are rich in nutrients such as fruits, vegetables, whole grains, nuts, seeds, and legumes.
  • Modified functional foods include minimally processed foods that are fortified or modified with additional functional ingredients that potentially have beneficial effects on health. Likewise, reducing ingredients that could be considered harmful or not helpful for health can also be regarded as a functional food—for example, lowering the levels of sugar or salt in a food or beverage.

Adding nutrients to food products is not new. Milk has been fortified with Vitamin D since the early 1900s. Vitamin D aids in strengthening bones, preventing bone diseases like rickets, and other essential health benefits.

The process of making yogurt has always required probiotics to thicken the milk and for many years, yogurt manufacturers have also included strains that help maintain a healthy digestive tract and boost the immune system.

Why functional foods and ingredients are on the rise

We can’t talk about functional foods and beverages without mentioning the pandemic’s impact on consumers’ heightened interest in health and wellness. A recent global study showed that 42% of respondents had increased their purchases of functional or fortified foods and beverages during the pandemic. The consumer mindset adopted a holistic and proactive attitude to wellness before the pandemic, however, the pandemic fundamentally accelerated the desire for foods that improve nutrition or immunity. 

The lifestyles of aging Generation Z and millennials will poise functional products for growth. By 2025, 41% of the population will be comprised of these two generations. These consumers are already significantly focused on nourishing their bodies to support physical and mental self-care. Nearly 70% of consumers currently use products that feature a functional benefit, and 4 in 10 younger consumers use products with more than three functional benefits.

For both Generation Z and millennials, weight loss, fitness, and exercise have become a priority after indulging in comfort foods while being cooped up during the pandemic. With keto and high-protein diets still trending, high-quality protein sources, both meat and plant-based, are still in great demand. Generation Z is more concerned about their health – especially their mental health. They self-report higher stress responses to both the news and social media than the three generations that preceded them and this emotional fragility is influencing how they think, eat and shop.  They desire to go beyond generic “better-for-you” products.  They are choosing foods and beverages that are custom to their personal health goals.

Younger consumers are looking for more pleasurable ways to incorporate nutrition into their diet. According to a global report, 85% of consumers prefer to consume health-enhancing ingredients through food and 57% through beverages, compared with only 23% who look to traditional supplement formats, such as pills and tablets. 

Eating well means consuming high-quality, nutrient-dense foods that meet their wellness goals and are also tasty. Today, consumers are flavor-seekers and culinary enthusiasts, often leaning into trending new flavors and being more willing to experiment with different ethnic and global cuisines. It’s important to note that while functional foods meet wellbeing needs, they must also appeal to the senses.

One area that younger generations are creating sweeping changes is the beverage industry. Drinkable nutrition is one of the fastest-growing markets in the food and beverage space. This change is propelled by young consumers looking for beverages that deliver tangible benefits such as enhanced hydration and cognitive support while cutting alcohol and sugar consumption.

The data clearly shows that the functional beverages market is packed full of opportunities to meet the needs of this increasingly health-conscious generation. Cold aisle beverages, like teas, coffees, enhanced water beverages, and smoothies are tapping into this market with added nutrients, botanicals, probiotics, and more.

Functional foods growth potential

No doubt, there is a financial appeal in the functional foods market. The functional food market size was valued at $177,770.0 million in 2019 and is estimated to reach $267,924.4 million by 2027, registering a CAGR of 6.7% from 2021 to 2027. 

For manufacturers, understanding which functional ingredients and product pairings will lead to market success is the key to finding growth.

Trending functional nutrition opportunities for frozen and refrigerated foods

Every week, we see new trends and opportunities popping up in the frozen and refrigerated foods industry. We’ve categorized a few that we believe have promise now and into the future:

Boosting physical wellbeing and immunity

  • Holistic nutrition and wellness – Holistic nutrition is a whole-life approach and is different for every individual. Manufacturers, both large and small, are tailoring new products to meet consumers’ lifestyles, needs, and philosophies. The plant-based shift is driving innovation in the frozen entrée market. From cauliflower macaroni and cheese, protein and grain bowls, to plant-based burgers, brands are customizing their recipes and formulations to be more plant-forward and nutrient-dense.
  • Immunity and disease prevention – Consumers are seeking out products that contain nutrients like zinc, selenium, B complex vitamins, and vitamins C and D, as well as alternative health remedies like moringa, elderberry, echinacea, astragalus, and ginger. Even before the pandemic, immunity1 supplements were growing in popularity. Immunity boosters are seen in refrigerated beverages, such as juices, smoothies, refrigerated coffee, and tea. There has also been a rise of ingredients like ginger, lemongrass, and fruits high in antioxidants in dairy and dairy-alternative drinks.
  • Decrease inflammation Boosting immunity and reducing inflammation were among the top health concerns that consumers tried to treat with food and food substances during the pandemic. The trend shows no signs of fading. Plant-based proteins such as chickpeas, seitan, lentils, turmeric, ginger, green tea, avocado, and olive oils are a few ingredients seen in frozen foods, desserts, and beverages.
  • Digestive support – Probiotics have recently taken center stage and proven that they are not a fad. The market is expected to attain healthy growth of 7.2% through 2028. Yogurt, kefir, kombucha, juices, smoothies, and butter have been natural trendsetters. Opportunity is significant in this market, as a recent study stated that 40% of consumers are willing to try food and drinks that will aid their digestive health. Research reveals pre, pro, and postbiotics offer benefits to the immune system as well.
  • Heart health – Functional foods with heart-healthy benefits have always been in demand. Heart disease is one of the most significant diseases that affects our country.
    • Omega-3 fatty acids – Popular in functional foods, omega-3 fatty acids are added to soy products, milk, yogurt, eggs, pasta, margarine, and other foods. They help heart health by curbing inflammation that can lead to heart attacks, improving blood vessel elasticity, and making blood clots less likely.
    • Phytosterols – These are used to make margarine, butter, and spreads. Plant sterols block cholesterol absorption in the lower intestine and lower LDL (“bad”) cholesterol levels.
    • Fiber – Fiber has also been shown to help lower LDL (“bad”) cholesterol and your risk for heart disease. Beyond heart health, fiber aids digestion and may even help prevent certain cancers. Frozen vegetables and fruits are high in fiber. You may also find fiber in soy milk and many frozen products such as whole wheat bread dough, pizza crusts or waffles.
    • Calcium and Vitamin D – Are vital nutrients that support heart health. Manufacturers across the dairy aisle fortify their products with calcium, such as juices, soy products, and milk alternatives. Vitamin D can be found in milk, yogurt, cheese, juices, and margarine.
    • Beta-glucans are sugars found in the cell walls of bacteria, fungi, yeasts, algae, lichens, and plants, such as oats and barley. Regular consumption of Beta-glucans is said to reduce the risk ofheart disease and high cholesterol. These food additives may be found in products such as frozen desserts, sour cream, and cheese spreads.
  • Improved energy – Generation Z has cornered the market on energy drinks. From coffee-based energy drinks, probiotic seltzers to smoothies, innovation is rising in the refrigerated beverage market. New product development looks to ingredients like caffeine, B vitamins, choline, iron, magnesium, zinc, ginseng, taurine, guarana, yerba mate, teas, coffee, and amino acids to satisfy Gen Z’s demand for energy-boosting beverages. 

Enhancing mental wellbeing

With celebrities, athletes and social media bringing mental wellness to the forefront of culture, more consumers are embracing products that address mental performance and mood enhancement. According to a recent study, more than half of global consumers plan to improve their cognitive and mental health over the next 12 months.  Trending areas to consider:

  • Brain health – Retaining mental sharpness and memory is a high priority for consumers across generations, but more so for those 50 and over. Foods that enhance brain function like leafy greens, nuts, seeds, whole grains and eggs have upped the nutrient content of everything from entrees to snacks in the frozen aisle. Supplements such as caffeine, L-Theanine – an amino acid sometimes found in tea, mushrooms, ginseng, lavender, coconut MCT, and DHA are finding their way into enhanced coffee beverages, juices, snacks, and ice cream.
  • Anti-stress and relaxation – Lemon balm, ginseng, GABA, Rhodiola Rosea, magnesium, valerian root, Vitamin B Complex, L-theanine, ashwagandha, and kava are the most used nutrients, herbs, and botanicals used in relaxation-focused beverages, snacks, frozen desserts, and ice cream. Milk phospholipids are receiving a lot of buzz lately. They are a naturally occurring component in milk fat that is clinically shown to help manage stress response.

What’s on the horizon for 2022 and beyond?

A recent 2022 trend report from Spoonshot shares up-and-coming food and beverage trends in the functional food area:

  • Synergistic food blends These are blends of two or more foods that enhance potential health benefits significantly more than the individual ingredients. There is an opportunity for CPG companies to use ingredient pairs rather than focus on a single ingredient. Thus, paving the way for innovation in the food and beverage space. For example, green tea and black pepper enhance the bioavailability of EGCG, thought to reduce inflammation, promote weight loss and help prevent heart disease and the benefits of Vitamin C + Zinc for immune defense. Developing new products with synergistic food blends for cold beverages, smoothies, yogurt, and even ice cream manufacturers could capitalize on the health and wellness benefits and set them apart from the competition.
  • Published research of the gut–lung axis points to a connection between your gut microbiome and the lungs. This fact reinforces that biotics in foods seems to be a golden opportunity for frozen and refrigerated CPGs.

What’s next for dairy aisle products?

A natural fit for the category, prebiotics hold the most promise. Prebiotics offer consumers a more significant nutritional profile to products they already purchase, such as cold beverages, juices, snacks, breakfast products, dairy and alternative dairy products.

Cold coffees, teas, and juices with immunity defense and natural energy claims appeal to consumers who expect their daily drink to support their health and wellbeing.

Versatile ingredients made from algae are also making inroads for manufacturers of cheese and dairy desserts as thickeners that add vitamins, minerals, and fiber.

With 30-50 million people in the US who are lactose intolerant, lactose-free products have loads of potential for milk, cheeses, and yogurts.

What’s next for frozen aisle products?

The top category in the frozen aisle is the dessert and ice cream category. Consumers want to feel good. Enjoying a tasty treat that has a functional food benefit is a win-win – indulgence without guilt. Plant-based, keto, and immunity claims continue to show the most appeal in this market.

Ready meals and snacks have become more desired by consumers as they continue to eat at home, an evolution spurred by the pandemic. A whole new generation considers frozen meals a part of their lifestyle. New premium frozen meals and snacks with wholesome ingredients and restaurant-quality taste have transformed the frozen aisle. Innovation has entered supermarket freezers, creating entirely new categories, like cauliflower pizzas, plant-based snacks and entrees, high-protein snacks and entrees, ethnic and global specialties loaded with unique flavor profiles and functional ingredients like turmeric, ginger and matcha.

CPGs can uncover functional food opportunities by tailoring meals and snacks to meet consumers’ needs. Consumers desire healthier options with healthier ingredients in the frozen food case; they want more vegetables, higher protein, fewer calories, and no artificial colors, flavors, sweeteners, or preservatives.

Fad or opportunity?

The pandemic acted as a catalyst to escalate the production of new functional foods, most notably those with immunity claims. However, consumers were seeking nutrient-dense and multi-functional foods and beverages long before we first heard of COVID-19. As the population ages, there is a prevalent shift in attitudes toward health and wellbeing.  

According to Mintel’s Global Food and Drink Trends, mental and emotional health awareness will increase mindfulness and intuitive eating. This holistic view of wellbeing teaches people to pay more attention to what they eat and how it makes them feel. Coupled with Mintel’s 2030 predictions how consumers view of wellbeing may evolve, makes a solid case for investing in functional foods: 

  1. Smart diets: Technology will enable consumers to construct individualized approaches to physical and mental health.
  2. Consumers will continue to prioritize plants in their diets, with the earth’s health as much in mind as their own. 
  3. With consumers expected to live longer, many people will want to learn how their diet can benefit long-term physical, cognitive and emotional health.

With the rising popularity of mind and body-boosting ingredients, there are abundant growth opportunities in functional foods. Manufacturers who seek to discover ways to meet consumers’ individual needs through nutrient-dense and custom formulations for unique lifestyles may see increased growth. As emerging ingredients are introduced, the holistic wellness movement evolves and technological advances progress, enterprising CPGs hold the keys to market new functional food categories and products in the frozen and refrigerated aisles.

1 Five Functional Benefits That Bring a Wealth of Health Benefits

   The Top 7 Vitamin and Supplement Trends of 2021

   COVID-19 Spurs Rapid Dairy Innovation With Immunity Benefits

   Functional Food is No COVID Fad: ‘Consumers have fundamentally changed their attitudes to health and wellness’

  Commissary Insider: Trending Flavors

  Functional Health Benefits and New Taste Experiences Beckon

Food scientist lookin at a sample

How the Frozen and Refrigerated Foods Industry Advances Food Safety for Consumers

Food safety – a global concern

Access to safe and nutritious food is key to sustaining life and promoting good health. Around the world, an estimated 1 in 10 people fall ill after eating contaminated food each year. In the United States, the CDC estimates that roughly 1 in 6 Americans get sick from foodborne diseases each year.

These are sobering statistics – that’s why our industry takes food safety seriously. We have a shared responsibility to prevent foodborne illness by collaborating with global organizations and governmental agencies, the supply chain, and ultimately consumers. 

From farm to fork, consumers expect the foods they purchase and consume are safe and high-quality. The pandemic has heightened consumers’ desire for greater transparency and raised food safety concerns to the forefront.

How the frozen and refrigerated industry is protecting consumers

Collaborates and uses guidelines established by third parties 

With a complex food supply system, food safety requires oversight and collaboration with multiple organizations and agencies.  

The Food and Drug Administration (FDA) regulates most food manufacturers in the United States (about 80%). In 2011, the Food Safety Modernization Act (FSMA) gave the FDA new authority to regulate how food is grown, harvested, and processed. The FSMA law is designed to transform the nation’s food safety system by shifting the focus from responding to foodborne illness to preventing it.

In 2019, the FDA rolled out a new initiative, the New Era of Smarter Food Safety. The FDA wants to use technology and other measures to modernize and expand traceability and transparency in the food supply chain. For grocery stores, the FDA’s Food Code provides a model to enable local, state and federal food safety regulators to be consistent with national food policies for both retail and foodservice.

The primary mission of the United States Department of Agriculture (USDA) is to support the country’s agricultural economy and ensure that products coming from our agricultural pipeline are safe and nutritious. They also provide leadership on food, agriculture, natural resources, rural development, nutrition, and related issues based on public policy, the best available science, and effective management. Through the Food Safety Inspection Service (FSIS), the USDA regulates meat, poultry and egg products, like packaged egg whites at the manufacturer level. Products like frozen beef patties, frozen chicken nuggets, strips or patties, frozen processed sausage/pork products or refrigerated packaged egg products (not in the shell), to name a few, are also regulated by the USDA.

While the FDA and USDA are two of the largest governing bodies for food regulations and safety in the US, many state and local agencies are also involved in food safety compliance. Each state may set laws and inspection protocols through departments of health, agriculture or food safety. Local jurisdictions may have county or city food inspection agencies. In addition, the Codex Alimentarius International Food Standards are standards developed by a joint commission between the Food and Agriculture Organization (FAO) of the United Nations and the World Health Organization (WHO). This collection of food standards aims to protect consumers’ health and ensure fair practices in the food trade internationally. 

Scientific research through government agencies, academic institutions and private partners reveals new measures to make food even safer from farm to fork. Consumers can rest assured knowing their health and safety are a top priority across the cold food chain. 

Uses operational measures which prevent food safety problems 

Food manufacturers, distributors and processors establish and implement internal procedures following federal, state and local regulations. Strong food safety management programs and protocols, such as Current Good Manufacturing Practice (cGMP) and Hazard Analysis Critical Control Point (HAACP), identify areas where food is at the highest risk of being unsafe and offer procedures to eliminate foodborne illness threats. 

With the advent of the pandemic, manufacturers and retailers escalated their food handling and cleaning procedures. Education and reinforcement of standard food safety practices such as handwashing, more frequent disinfection & sanitization measures, and face and hand coverings became even more critical. 

Focus on safe distribution and storage

The cold chain uses innovative technology to safeguard the public from pathogenic microorganisms, allergens, toxins and other contaminants. 

Many cold chain providers adopt low-temperature chillers, that can freeze prepared foods quickly to ensure they are safe, disinfected and stored appropriately. 

Warehouses are using innovations such as co-bots, ground-based drones, AI and machine learning to help facilitate more efficient order-picking of frozen and refrigerated foods – alleviating any thaw or dangerously low temperatures that might occur.

recent survey shows that half of consumers worry about the safety of fresh, perishable and frozen foods while they are transported to stores. Nearly two out of three consumers agree that better technology has a role in keeping food safe. More than half of consumers say better data is needed to track food safety practices from farm to table. Artificial intelligence, such as transportation management systems that monitor temperature and other critical factors in real-time, can offer transparency to both food shippers and receivers. 

Using emerging technology for transparency

We live in a digital world and technology is advancing in many sectors, including the food industry. Many food safety experts and agencies tout that using blockchain, AI and machine learning can bring transparency throughout the supply chain, reduce food fraud (intentional contamination or corruption of food) and enhance food safety. The FDA is leading the charge, stating that these emerging technologies are the future of tracking and tracing food sources and foodborne illness outbreaks. 

Advances in genotype tracing for pathogens and parasites shed light on the extent of an outbreak and help associate the implicated food through which it was transmitted. The complexity of the food chain, having clear internal and public communication, coping with the high number of tests and feedback required during the escalation phase, obtaining relevant samples and having the right tools all affect the process of finding and tracing back to the route of transmission. 

Food safety is a shared responsibility

A food system works best when we all share the responsibility. From the government level to the consumer, we all have a part to play.

At NFRA, we are working to do our part through collaboration with organizations such as the Partnership for Food Safety Education and promoting consumer food safety initiatives, including World Food Safety Day and  #NationalFoodSafetyEducationMonth.

Our members are making strides every day to make our food healthier and safer. Food safety is a big job and takes the cooperation of many individuals to ensure it’s done correctly. As pioneers of the cool aisles, we know the frozen and refrigerated foods industry is equipped with the knowledge and the ingenuity to help prevent foodborne illness. 

Getting Greener

Sustainability in the Frozen and Refrigerated Foods Sections

Going green is a major priority for consumers, and they want brands that align with their values – environmental responsibility being one of them. Close to 6 in 10 consumers surveyed in a National Retail Federation (NRF)/IBM study said they are willing to change their shopping habits to reduce environmental impact. Nearly 8 in 10 respondents indicate sustainability is important to them1.

This shopper group, called purpose-based consumers1, accounts for 44% of food consumers. These individuals are willing to pay more for brands that have an active environmental stance. Over 70% of the most motivated respondents said they would pay a premium of 35%, on average, for brands that are sustainable and environmentally responsible1. It’s a significant consideration for all age groups, from Generation Z to boomers1.  

The evolving prominence of this mindset has a significant impact on the supermarket – specifically the frozen and refrigerated food sections. 


Transparency initiatives are more important than ever to consumers. 71% state that transparency and traceability are important, and they are willing to pay a premium for brands that provide them1.

NielsenIQ takes it a step further, claiming that transparency drove the growth of food in fast-moving consumer goods in 20182.

It’s no wonder that ethical practices, ingredients, claims, traceability, and communications efforts are rising throughout frozen and refrigerated aisles and will continue to grow as consumers demand more transparency. 


Overall, freezer cases have been doing very well with sustainable initiatives. Frozen foods already have a lower carbon footprint than fresh foods3. Here are three main areas that have helped to lower frozen food’s carbon footprint in recent years:


Overall, transporting frozen foods uses less fuel than traditional shipping methods for fresh products3

Before COVID-19, the focus was on manufacturers to evaluate their emissions with facilities and transportation. But, with the new push for online ordering and grocery delivery, retailers are now examining their processes, too.  Retailers are revamping their delivery and supply chain transportation by modernizing their fleets to options that use less fuel and opt for eco-friendly fuels4.

Less Waste

Frozen foods are a great alternative to fresh produce due to their extended shelf-life and use-what-you-need convenience. They can reduce food waste up to six times, which sounds even better once you know that one-third of our food worldwide ends up in the trash, with 45% being fresh fruits and vegetables5

End users aren’t the only ones that contribute to food waste, though. Consumers are starting to look to manufacturers and retailers to also play their part in reducing food waste. Retailers are contributing to these efforts by preventing food waste through strategic product ordering and responsible food handling on the operational level6. Additionally, manufacturers and retailers alike do a great job in rescuing surplus products for donation to the food insecure.


During the COVID-19 pandemic, almost 50% of consumers started buying more frozen foods. This new high demand is fueling a closer look at more sustainable packaging throughout the frozen food category.  Manufacturers and retailers are listening. Many brands have recently swapped out older packaging for recyclable, reusable, compostable, and biodegradable options7


Environmental consciousness during the pandemic is affecting the refrigerated aisles. Sustainability as a primary reason to purchase products has increased significantly, with dairy consumers focused on carbon emissions and packaging8.

Several efforts are underway to address the sustainability of the category, focusing on innovation in a few key areas:

Storage – Energy Efficiency & Carbon Emissions

The refrigerated supply chain, or cold chain, reduces food losses significantly, but it’s an energy-intensive process. Many companies have made aggressive commitments to carbon neutrality and reduced emissions. Through innovation, the industry is tackling carbon emissions with efficiency projects, renewable energy sourcing and retrofitted refrigeration systems that emit less CO26.


A staggering 86% of U.S consumers agree that if they knew the use of renewable packaging contributed to reducing carbon emissions, it would impact their choice of packaging. On top of this, 69% would be willing to seek out products that come in renewable packages9

Sustainable packaging is a huge opportunity, and we’re starting to see changes such as glass bottles, plant-based plastic containers, and paper/reduced-plastic hybrids make their way into the aisle10

As recycling programs improve and expand, sustainable packaging will become more common in the refrigerated foods section.

Production Emissions & Carbon Footprint

Making strides in the dairy industry

From farm to consumer, the dairy industry is mobilizing to reduce carbon emissions and improve energy efficiency. For example, the Net Zero Initiative by the Innovation Center for U.S. Dairy is an industry-wide effort aimed to help U.S. dairy farms of all sizes and geographies implement new technologies and adopt economically viable practices11

“Producing a glass of milk today requires 30 percent less water, 21 percent less land, and has a 19 percent smaller carbon footprint than it did in 2007, thanks to the positive actions taken by dairy farmers,” says Karen Scanlon, executive vice president of environmental stewardship at the Innovation Center for U.S. Dairy.11 In some parts of the country, dairy generates 50% less greenhouse gas emissions than 50 years ago12

The plant-based alternative dairy industry is a trendsetter in eco-friendliness

Milk alternatives, such as soy, almond, oat, and coconut, continue to rise in popularity. In part because of vegan and plant-based lifestyle choices and because non-dairy alternatives have a low impact on the planet.  According to a University of Oxford study, alternative milk products emit relatively low greenhouse gases and use less land and water in production.13

Reducing environmental impact will be crucial to gaining and retaining new consumers; efforts need to continue to decrease or offset emissions during production and take part in earth-friendly initiatives. 


Sustainability is a popular topic in the frozen and refrigerated foods categories. It’s being driven by increased consumer interest and purchase intent of sustainably focused brands—transparency, packaging, carbon emissions, and waste impact the aisles. Efforts to improve are in motion, and those leading the way and communicating their actions are likely to gain the trust and dollars of loyal and new consumers. 


1 National Retail Federation/IBM Report – Meet the 2020 Consumers Driving Change

2 NielsonIQ – It’s clear transparency is driving FMCG growth

How green is it to eat frozen food?

4 Ahold Delhaize – Climate Impact

5 Fresh versus frozen: a sustainable choice with a twist

6  Supermarket chains embrace eco-friendly initiatives

7 Frozen food packaging gets more sustainable

8  McKinsey & Company – What’s ahead for the dairy industry

Survey: Most U.S. consumers would choose renewable packaging to help mitigate climate change

10  Sustainable packaging options for dairy foods continues to improve

11  Science-based roadmap can help dairy industry meet sustainability goals

12  California dairy farms have halved their emissions since 1964

13 Climate change: which vegan milk is best?

What’s Trending with America’s Favorite Dessert

Ice Cream & Novelties Trends

It’s a fact – America loves ice cream. A quarter of U.S. consumers (25%) said it was at the top of their list of favorite desserts1, and with 87% of consumers saying they bought ice cream in the last 6 months2, it’s a well-earned honor.

Demand for the top dessert has turned the category into a $7.7 billion business3 – the largest in the frozen department. And it’s still growing, with a 3.8% increase in dollar sales and 2.9% increase in unit sales compared to the same period last year3.

Ice cream is also fueling the future – the category is anticipated to grow by 3.3% compound annual growth rate (CAGR) 2019 – 20234. The comfort ice cream brought shoppers gave the category a major bump in the last year as well. Given ice cream’s major role in the frozen case, we’re taking a look at what’s in demand as well as what’s coming next for America’s favorite dessert.

Plant-Based Products

We know – we sound like a broken record, but it’s just a fact: plant-based products are growing like crazy, and we know that ice cream is a key factor for this growth. The global plant-based ice cream market was a $455.9 million category in 2018 and is anticipated to reach $1.2 billion by 20255.

With more and more people adopting vegan practices and an estimated 75% of the population living with lactose intolerance6, it’s no wonder more people are picking up this style of ice cream. These products are typically made using coconut milk, almond milk, cashew milk, oat milk, soy milk, sunflower butter, and even dairy that isn’t produced by animals – appealing to a larger audience and leaving room to innovate and evolve for years to come.

Premium & Indulgence in Moderation

Consumers are spending more time at home, and they’re turning to ice cream as an affordable indulgence7. This has given growth to premium ice cream products. Two-fifths of ice cream manufacturers see an increased demand for premium ice cream8, and retailers say that it is most popular with their consumers8.

These days, more consumers are buying products that boast features such as local, small-batch, craft, artisanal, hand-packed, or that include premium ingredients.  And, packaging these products in smaller cartons is helping to allow them to indulge while keeping it easy on their budgets.

Thanks to accessibility, nostalgia, and relative affordability, premium ice cream has been tagged as a key factor in the category’s growth.


The rise of snacking is another trend making its way to the ice cream aisle, particularly in novelties. It’s a big trend: Over 44% of millennials and 32% of boomers say they snack at home. Even more have at least three snacks a day: 64% of younger millennials, 54% of older millennials, 43% of younger boomers, and 33% of older boomers9.

Snacks are starting to replace meals for some consumers, and dessert and indulgent moments are next. Novelties present a huge opportunity to capitalize on this trend with a ton of room for product, packaging, and portability – an innovation that could spur substantial growth.

Ethnic & Unique Flavors

While looking for variety in their eating habits, shoppers continue to seek unique flavors. Some are turning to ethnic favorites: 64% of U.S. consumers want to discover flavors from other cultures10.

These flavors are popping up in the ice cream aisle, usually as small-batch/premium offerings. Chai, matcha, and other tea-focused flavors are becoming common, as well as Mexican staples such as dulce de leche, mango, chili-lime, and churro.

More sophisticated palates like flavors like strawberry lemongrass, candied ginger, wildberry lavender, guanabana, and mascarpone and berries.

More and more distinct flavors like these will likely be introduced to the market in the future, much like how the culinary industry experiments with cuisine fusion and distinct flavor profiles.

This brings us to…

Savory Flavors

It doesn’t get more unique than bringing savory into a traditionally sweet category.

Sweet and salty has been a tried-and-true flavor combination, and we see brands take that over the top 10. They’ve been infusing chicken and waffles, candied bacon, blue cheese, avocado, olive oil, wasabi, and even smoky flavors into their products.

In Summary

Ice cream is America’s favorite dessert and is a key driver of the frozen food category. It got a big bump due to COVID and will only keep growing from there. 

The leading trends we see fueling the continued expansion are dairy-free/plant-based, premium products, products for snacking, unique ethnic flavors, and savory flavors.

We believe the future looks sweet for this cornerstone category. 



In Demand: The Growth of Plant-Based Products from Refrigerated and Frozen

For years, when you talked about what was hot at grocery, the plant-based food category was almost always at the top of the list. With good reason too – in 2019, their retail market value reached $5.5 billion.

But in the past two years, the market has exploded – growing almost 2.5x faster than total food sales from 2018 to 2020.

Today, it’s grown to a $7 Billon market with no slowdown in sight. The category grew 27% in dollar sales in the last year alone – outpacing dollar sales growth of overall foods by double digits. And the demand is only getting larger – six out of 10 households making a plant-based food purchase in 2020.

Plant-based frozen and refrigerated foods make up a key portion of this growth, primarily due to new products. Let’s take a look at what’s leading the way.

Plant-Based Milk Is King

Out of all the plant-based product categories, plant-based milk is the most developed. It represents 35% of the total plant-based food market – reaching $2.5 billion in dollar sales in 2020. And it’s still growing – up 20% in dollar sales in the last year.

These products are commonly shelved right next to dairy milk. The exponential growth of oat-based products has claimed even more of that shelf space. With 39% household penetration, this will only continue to expand in the future.

Plant-Based Meats Aren’t Far Behind

Plant-based meats are rapidly growing, even as the category matures. Dollar sales grew 45% in the past year and 72% over the past two years.

While plant-based meats launched in the frozen section (and are still generating double-digit sales growth), it’s refrigerated plant-based meats that are driving the category.

Thanks to new product innovation and merchandising, they’re breaking out of their specialty vegan or natural foods cases to sit alongside their meat-based counterparts. These strategies are gaining an increasingly larger share of the category.

Emerging Plant-Based Categories Offer Prime Areas For Growth

Some smaller plant-based dairy products are in the best positions to become substantial players in the market. Some are already growing like crazy.

Piggybacking on the plant-based milk growth, plant-based creamer grew at more than three times the rate of dairy-based creamer. It clearly benefited from sharing the same shelf space. 

And, surprisingly, plant-based cheese also grew at three times the rate of dairy-based cheese. These products are starting to work their way out of the vegan/natural section, as exhibited by this growth.

Another product with a huge opportunity to gain market share is plant-based yogurt. It represented $343 million in dollar sales in 2020, but outperformed its milk-based counterparts by growing at more than 30 times their rate.

Plant-based eggs, while tiny, present the biggest opportunity for growth. Dollar sales grew 168% last year and a whopping 706% over the past two years. They outpaced animal-based eggs by 117x their dollar sales.

In Summary

Plant-based products are a major player in the refrigerated and frozen sections, and they’re only getting bigger. Demand is fueling their exponential growth with no slowdown in sight.

Established products like plant-based milk and meat are leading this substantial category and continuing to grow – making headway into the dairy and meat-based sections of the store.

Products like plant-based creamer, cheese, yogurt and eggs offer a substantial opportunity to gain market share in the coming years.

With these growth numbers and consumer demand, we don’t see growth of plant-based products slowing anytime soon.

SOURCE: All data is from the Good Food Institute report based on SPINS retail sales data released April 6, 2021, found here:

More Than Meets The Aisle: Innovations In The Dairy Section

One of the leading initiatives of NFRA is our June Dairy Month promotion. For years, we’ve highlighted all the exciting ways shoppers can use the unique and different products they can only find in the dairy aisle.

We’ve seen a lot of changes in the aisle since we started this program – going from mostly staples of milk, eggs, cheese and butter to an expansive case that makes up a quarter of the perimeter of the store.

Today, 99.6% of households purchase products from the dairy aisle, and each buyer is now spending $365 annually1. So for this June Dairy Month, we’re diving into the latest innovations and larger trends that are shaping the aisle today and will continue in the future.

Plants Growing Like Crazy

You can’t talk about dairy aisle innovations without talking about the plant-based takeover. Plant-based products continue to be the largest growing portion of the aisle. As we said before, there’s no slowdown in sight.

Plant-based milk is the largest segment of the plant-based category at retail – representing 35% of the total plant-based food market2. This segment reached $2.5 billion in dollar sales in 2020.2 And it’s still growing – up 20% in dollar sales in the last year2. With 39% household penetration, and six out of 10 households making a plant-based food purchase in 20202, this will only continue to expand in the future.

The exponential growth of Oat Milk, with Coconut Milk right on its heels, is fueling this growth. Soy-based milk was one of the first to sit on shelves right next to their dairy-based counterparts. This has obviously played a huge role in the category’s development and the shape the aisle has taken today.

All Hemp Everything

Hemp and CBD products have been popping up all over retail locations. Oils, teas, supplements, waters, dog treats and more are all common in stores today.

Riding the growing popularity of these products, hemp eggs and milk have started creeping into the dairy aisle3. They’re more commonly found in natural food sections, but it’s been increasingly common to see them sitting next to regular milk and eggs.

In the near future, hemp creamer and cheese will be looking to scale up retail distribution levels. Given how prevalent CBD and hemp products are now, we think we’ll see this become the next plant-based area of growth. 

New Items

The dairy aisle has proven to be an area ripe for innovation.

Take yogurt, for example. In 2017, new dairy products generated over $2.6 billion, mostly through brand extensions, especially in yogurt. Yogurt introductions during that time include new brands, new flavors, low fat, no-fat, whole milk products, bulk containers – even yogurts that contained more live and active cultures than the rest.

Their probiotic perks clearly caught the eye of shoppers and manufacturers – seizing the market opportunity to expand. 

Like yogurt, functional foods are a staple of the dairy aisle, and shoppers have turned their attention here for its bevy of health benefits. Products like ready-to-drink kefir have capitalized on this. Rich in nutrients and gut-health aids, it’s expected to have a 9% compound annual growth rate between 2019 and 20294.

Snack Attacks

Snacking continues to be a gigantic trend among shoppers today. Fueled by millennials looking for smaller, quicker meals that fit into their on-the-go lifestyle, 60% of people buy snacks as part of their weekly shop and 57% are replacing meals with snack foods5.

Products in the dairy aisle fit what these snackers want to a T: wholesome nutrition, functional benefits and portion control. Ready-to-go drinks, handheld bars and less-sugary cheese snacks4 are perfect for the large number of people who want to eat well in between meals. Targeting these occasions and finding packaging that can deliver the on-the-go benefits make this an area primed for growth.

Ethical Dairy

Dairy is starting to take a page from their neighbors on the perimeter – the meat case. Ethical practices, claims and marketing communications are on the rise and will continue to grow as consumers demand more humane treatment and transparency.

Current offerings include pasture-raised butter and grass-fed milk, which are positioned and priced as premium. But other everyday items are starting to follow suit with claims and marketing strategies that tell the story of how the milk is raised, how it’s treated and the farms it comes from.

Sustainability on the whole is a big issue the dairy aisle is facing. Packaging is one big area of concern6. The use of plastic containers, cups, wrappers and bags has become commonplace in the aisle. While most are recyclable, more sustainable packaging is on the rise elsewhere – making consumers question their buying habits.

One of the foremost issues within sustainability is the meat industry’s impact on the environment, especially greenhouse emissions7. The carbon footprint for beef and dairy far outweighs that of their plant-based counterparts. Reducing this impact will be crucial to gaining and retaining new consumers, specifically millennials. Efforts need to continue to decrease or offset emissions, and take part in earth-friendly initiatives.

Transparency in ethical practices, ingredients and claims is also key to gaining shoppers’ trust. In 2018, Nielsen claimed transparency was driving the growth of food in fast-moving consumer goods4.

Recently, the use of Blockchain technology was being used to increase the traceability from the cow itself all the way to consumers.

Which brings us to our next trend….


Applying the Blockchain technology platform could revolutionize the transparency of the industry. “Blocks” of information could be strung together from cow to consumers – all the way down to the genetic makeup of the cow and the feed it was given4. It’s being tested right now, and if it’s perfected, every producer and manufacturer will be using it.

Lab-based dairy is another technology that could change the aisle forever. It sounds like a science experiment, and it is – some labs have already synthetically created the proteins found in cow’s milk7. So, basically, milk without the cows. This addresses both the animal treatment and the greenhouse emissions mentioned above. With Non-GMO products still at the forefront of cleaner eating, lab dairy has a huge hurdle to clear.

And lastly, ‘supercooling’ technology could turn exporting fresh dairy into an easier enterprise4. If the technique continues to be successful, we could see more international milks appearing on shelves, or more of our domestic milk going overseas.

In Summary

The dairy aisle of today looks nothing like it did in the past and will continue to reshape itself in the future. We believe plant-based products, hemp products, new items, snacks, ethical initiatives and technological advancements will be key components in determining what the aisle looks like tomorrow and for years to come.