SOLON, Ohio — The pizza arrived, mozzarella melting on a red crushed tomato blanket dotted with brilliant green spinach aboard a crispy, irregularly shaped crust dusted here and there with ash.
The only hint that it had emerged from the freezer rather than the nearby wood-fired oven in the culinary kitchen at Nestlé’s new research and development center here? A faint, raised ring around the edge of the crust, a telltale sign that it was stamped out of a sheet of dough in an industrial process.
Nestlé has sunk $50 million into the center, which opened in July, in a bold effort to reinvigorate its frozen foods business, which has been in the doldrums in the United States together with other stalwarts of the frozen aisle. “We test more than 2,500 recipes every year here, using more than 800 raw materials, and it typically takes 100 recipes to get to a single product,” said Sean Westcott, director of the center.
It is not the only one pumping money into its frozen offerings, either. ConAgra Foods is revamping its frozen food brands, which include Marie Callender’s and Banquet. Atkins Nutritionals started a new frozen line in 2013, and when Christine Day left the C.E.O. chair at Lululemon, she invested in Luvo, a relatively new line of frozen foods.
“I was looking for convenient food options that my dad, who has taken over the cooking, could make easily for my mother, who has diabetes,” said Ms. Day, who is now Luvo’s chief executive. “But standing in the frozen food aisle looking at what was available, I wasn’t impressed.”
Other consumers have apparently shared her disappointment. According to data from Nielsen, sales of frozen food in the United States have bumped along, growing at a rate of less than 1 percent on average over the last four years. On a unit basis, sales have declined 2 percent.
According to a 2014 report from Jeffries, an investment bank, established companies have lost more than 5 percent of their share of the revenue generated by frozen entrees, while smaller and private label brands increased their share. Traditional brands of frozen vegetables showed similar losses to smaller competitors.
“They’ve lost their way in terms of keeping up with the latest flavor and other trends and now are trying to catch up,” Mr. Hale said. “I’m not saying it will work for every segment of the business out there, but there’s certainly a lot of effort going into driving growth again.”
Frozen foods’ malaise isn’t so surprising. Consumers today are seeking out foods with intense flavors, no gluten, high protein, minimal and fresh ingredients, turning their backs on the frozen section at a time when frozen food executives have been working feverishly to reduce sodium and sugar, eliminate additives and otherwise improve their products.
“There’s been a lot of baggage in this industry with consumers thinking we use a lot of preservatives,” said Rob McCutcheon, president of ConAgra’s frozen business. “But we usually don’t need to add preservatives to our frozen products, because freezing is like nature’s pause button.”
But Nestlé and ConAgra, as well as other top producers of frozen food like General Mills, which owns the Green Giant brand, and Pinnacle Foods Group, which is behind Mrs. Paul’s and, in the United States, Birds Eye, no longer dominate the freezer cases the way they once did. Established frozen brands like Lean Cuisine and Marie Callender are facing stiff competition from smaller, nimbler competitors like Luvo, Amy’s Kitchen and Simple Truth.
Atkins Nutritionals saw an opportunity, for example, to exploit a gap in the frozen food cases that no big company seemed to have spotted: There were few options for adherents of low-carb diets like Atkins.
So the company came up with a frozen line that has a low-carb pizza and breakfast sandwich — and sales in the first year hit $68 million and have just kept growing, according to Scott Parker, the company’s chief marketing officer.
Only two of Luvo’s meals have more than 1 teaspoon of added sugar, and none contain more than 500 milligrams of salt. Its products are packed in patented paper pouches that consumers can open onto their own plates. “No one likes eating out of a black plastic tray,” Ms. Day said.
She said research by the Hartman Group showed that consumers shop the frozen aisle the way they choose what to eat off a menu, and so Luvo designed its products with that in mind. “Most meals in that aisle traditionally have been designed around price, the value shopper, and that’s not what’s coming out in our research at all,” she said.
Products like Luvo’s are helping reinvigorate a category that still generates a handsome piece of grocery store sales. Frozen foods accounted for more than 6 percent of $810.8 billion in sales in the 52 weeks that ended June 27, according to Nielsen — or more than four times the revenue generated by the deli department.
Judson Wells, manager of Kroger’s frozen food business, said its frozen sales had actually grown, thanks to such new brands. “With everybody promoting fresh and local, there’s a lot of noise out there for those type of items and not a whole lot of noise about frozen foods,” Mr. Wells said. “A lot of the traditional suppliers of frozen food kind of let the conversation get away from them, and now they’re having to catch up.”
Jeff Hamilton, president of Nestlé Prepared Foods, agreed that Nestlé had been “slow to catch on to what was going on.” When he took over the division in March 2014, sales of Lean Cuisine, Nestlé’s biggest frozen brand, were in a free fall.
“We’re not making subtle changes,” Mr. Hamilton said. “We want to be making radical changes.”
A little more than a year later, Nestlé introduced new and reformulated versions of a dozen Lean Cuisine products and put the entire line in new, more contemporary packaging that proclaims attributes like “gluten-free” and “22g protein” out front.
Mr. Hamilton treated a visitor to a lunch that sampled several of Nestlé’s retooled frozen products, including Lean Cuisine’s Vermont White Cheddar Mac & Cheese (“made with organic pasta” and “No GMO ingredients”) that is made with Cheddar from a single Vermont supplier and ridged noodles to help the cheese cling.
Another item on the tasting menu was Cilantro Lime Chicken blanketed in a tomatillo sauce and served with black beans and corn, one of several items in a new, protein-rich frozen line called Stouffer’s Fit Kitchen.
“What the consumer today wants is foods that are indulgent but healthy,” said Lucien Vendôme, director of strategy and innovation for Nestlé Prepared Foods.
ConAgra has identified “pockets” of growth in frozen food and is working to capitalize on them.
Sales of its potpies, for instance, have grown by more than $100 million over the last four years, and 10 months ago, the company added a family-size potpie that has already generated $10 million in retail sales. Soon it will introduce a vegetarian potpie and a chili potpie, hoping to draw even more consumers to the category.
“When you think about millennials who are just learning how to cook, building that skill set, frozen foods are perfect for them,” said Bob Nolan, senior vice president for insights and analytics at ConAgra.
Rob Dickerson, an investment analyst at Consumer Edge Research, estimates that sales of frozen processed food will grow at a compound annual rate of 4.6 percent globally over the next five years, representing additional revenue of $32 billion, similar to the growth rate of coffee.
There is a lot of investment activity in frozen foods, too. This summer, Nomad Foods, an investment company backed by William Ackman, who has also invested in Burger King and Mondelez, snapped up Iglo and Findus, two large European frozen foods businesses.
And investment analysts have speculated that Pinnacle may sell Birds Eye’s United States business to Nomad, which already controls the brand in Europe, and General Mills is reportedly in negotiations to sell Green Giant to a French food company.
“I don’t think frozen is dead or even under so much pressure as the big guys would have you believe,” Mr. Dickerson said. “In my mind, it’s really more of a branding issue, and the question really is: Can they renovate those big brands? I think the jury is still out on that.”