Nestlé has amassed an enviable portfolio of well-known frozen offerings in the U.S. such as Stouffers, Lean Cuisine, Hot Pockets and DiGiorno pizza. But as consumers increasingly value convenience and portability, the CPG giant is establishing a presence in the fast-growing $600 million portable meal segment where food doesn’t need need an oven or microwave to prepare.
The CPG first entered the thaw-and-eat space in May with a Deliwich, touted at the time as the company’s first sandwich that doesn’t need to be cooked in a microwave. The sandwich, which contains deli meat and cheese wrapped in a soft roll that is designed to be taken on the go frozen and ready to eat fresh in two to four hours, could be just the first entree for Nestlé as it tailors its portfolio to mirror changing market conditions and consumer eating habits.
“This is a very important incremental occasion in which, today, our portfolio doesn’t stretch,” Alicia Enciso, Nestlé USA’s chief marketing officer, said. “We’re aiming for it to be a significant part of sales, but we’re going to see how consumers continue to adopt the behavior and the opportunity for it to grow.”
For now, the thaw-and-eat category is expanding rapidly, increasing at a 25% compound annual growth rate, according to IRI data shared by Nestlé.
Nestlé is not the only CPG giant to enter the thaw-and-eat category this year. J.M. Smucker announced in September it was taking its popular Uncrustables brand into the space with portable bites containing meat, cheese and soft bread.
In an email, Chris Achenbach, director of brand strategy at J.M. Smucker, said the Ohio-based company is planning to do more thaw-and-eat items. “The demand for Uncrustables is unprecedented and we are working diligently to expand capacity to meet this need while continuing to find new ways to delight consumers,” he said.
Enciso said Nestlé is viewing Deliwich as a test but would “definitely” do more in the thaw-and-eat category in the future.
In the case of Deliwich, which is marketed under the company’s Hot Pockets brand, Nestlé can take the frozen brand into a slightly different consumption occasion that otherwise would have been lost, for example, with someone driving in their car, catching a flight or going on a hike. It also plays into other popular trends, too, like freshness and convenience — it saves a parent time making the food item the night before or having their child heat it later on.
Deliwich is primarily targeted at younger consumers, allowing Nestlé another way to reach a shopper who may later transition into their other products depending on their appetite or where they are located.
Adam Graves, the president of Nestlé USA’s pizza and snacking division, told reporters during an event at the company’s U.S. headquarters earlier this year, the company needs to evolve with the consumer. He estimated 15% of eating occasions occur outside the home.
He said thaw-and-eat is a “nascent category” but for now the company’s focus is entirely on Deliwich. It’s currently selling the product at major retailers, but Nestlé is assessing whether it would work in other channels like convenience stores.
“It’s a platformable idea, for sure, so there would be opportunities to expand in the future,” Graves said.