“The other business that was the bigger challenge was Lean Cuisine, which had been declining double digits for many years. We knew we needed a bold pivot.”
The company has transitioned Lean Cuisine from a focus on low fat and low calorie to high protein, gluten-free, non-GMO and certified organics designations.
Lean Cuisine has been segmented into a Comfort line with products such as meatloaf and mashed potatoes, and a Marketplace line, with products such as Ranchero Braised Beef.
The company also is introducing culinary recipes, such as Sweet & Spicy Korean-Style Beef and Mushroom and Spring Pea Risotto, versus older, more basic staple items, such as a spaghetti and meat sauce variety.
The company has introduced a new tagline, “Feed Your Phenomenal.” The moves have been successful, Hamilton said. After years of double-digit sales declines, the brand is growing again in high single digits.
The sales improvement underscores the continued relevance of frozen foods, Hamilton said, noting that frozen foods are well suited to benefit from numerous fundamental consumer trends:
1) “Perfect preservation,” freezing at the peak of freshness
2) Allowing for simple management of portion control
3) Supporting controlled intake of sodium and calories
4) Helping consumers understand and ensure nutritional balance
5) Convenience
6) Reducing food waste
The business case for frozen foods is strong, too, Hamilton said, noting that the frozen foods segment is large and profitable. High growth niches such as organic remain to be more fully penetrated.
“The e-commerce side of frozen has been slower to develop, mostly because of the ‘last mile,’” Hamilton said. “Last mile solutions tend to come first in ambient, then chilled, then frozen. Now we’re coming to frozen. Most importantly, both suppliers and retailers have renewed interest in this category.”
To sustain growth, Nestle must keep abreast of consumer trends, even staying “one step ahead,” Hamilton said. Increased participation in high growth segments and channels is needed. Longer term, he expects the category to generate low- to mid-single digit growth.
