Freezer cabinet stalwart Birds Eye says the frozen seafood category is well placed to weather economic uncertainty despite recent statistics showing the segment is struggling.
While the threat of recession looms, the company expects frozen food sales to be resilient as consumers seek value and ways to manage their household budgets.
According to newly released statistics, frozen seafood sales at UK retail fell 10 percent by volume to £995 million in the 52 weeks through October, while prices spiked 4.5 percent.
Sales of frozen fish fingers, the mainstay of the Birds Eye brand, fell 4.3 percent by volume over the past year, according to the figures.
Birds Eye's revenue dropped for the first time in four years as 2021, according to results filed recently with Companies House.
The company's annual report blamed the drop on consumers reverting to pre-COVID behaviors, with bigger, less frequent shopping trips as the foodservice sector reopened and shoppers began to eat out of the home again.
As a result of these behavior changes, the Nomad Foods-owned company's revenue declined 3.9 percent, or £28.3 million (€32 million/$32 million), to £704.4 million (€800 million/$800 million).
Operating profit for the year was flat at £106.8 million (€120 million/$120 million).
Pre-tax profits at the group increased by £2 million (€2.3 million/$2.3 million) to £106.7 million (€122 million/$122 million), but Birds Eye warned it would have to increase prices to cope with inflation of raw materials, energy, packaging, freight and logistics as the war in Ukraine continues to take its toll on global supply chains.
The move follows work by a number of large European processors to secure whitefish alternatives, with supply chains for cod and other whitefish disrupted following the Russian invasion of Ukraine, and additional volumes from Norway, Iceland and the Faroes in tight supply.
Last month, Nomad reported a 35 percent increase in preliminary adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to €153 million ($151 million).
Revenue increased 27 percent to €760 million ($751 million) over the period, while organic revenue growth was 7 percent higher.
In 2019, prior to the pandemic, the UK frozen food market was worth approximately £6.32 billion (€7.2 billion/$7.2 billion), according to the British Frozen Food Federation. In 2020 it increased to £7.21 billion (€8.2 billion/$8.2 billion), a spike of 14 percent.
Birds Eye is a member of Nomad Foods group, which also includes Iglo, Findus, Frikom and Ledo brands.
