The European frozen food production market comprises companies that engage in the production of frozen food. We segmented the market by product type into (i) meat and fish, (ii) bakery and pastry, (iii) potato products, (iv) meals and (v) generalists.

The European market is consolidated with a number of large, international players and a long tail of smaller, primarily local frozen food producers. The increasing demand for convenience food and ready-to-(h)eat meals, combined with the rising quality and increased variety of frozen food, serve as significant tailwinds for the market.

Sponsor-led interest has been limited. The market’s stable cash flows and expected market growth, driven by quick service restaurants (QSRs) and convenience food trends, are primary drivers for investors. Additionally, the long tail of smaller producers allows for a roll-up of the market in pursuit of multiple arbitrage.

Overall, category shelf space is stable given significant upfront capital expenditure in freezing equipment. However, retailers tend to shift around in the percentage of private label versus branded products. Private label penetration within the frozen food segment is one of the highest across supermarket categories, averaging ~43%.

ESG topics mainly relate to environmental sustainability, since production processes for frozen food result in significant food waste. To combat waste, incumbents invest heavily to make their production lines more efficient and decrease waste output. Moreover, the production process requires substantial energy to prepare and subsequently freeze the products at a temperature of -18°C. In terms of social well-being, producers must adhere to the latest food and health safety procedures when processing frozen food to ensure consumers’ health.