New Developments in the Frozen Food Industry: A Study of Capital Requirements

Excerpts from the report: Frozen foods have been one of the most important developments in the food industry in recent years. Most of the growth in production of frozen foods has occurred since World War II. A whole new marketing structure had to be developed. The coordinated efforts of every segment of the trade were required. New varieties of fruits and vegetables were developed for freezing. New and improved methods of quick freezing were required. New packaging materials, specially designed for each type of frozen product, had to be developed. Below-zero storage, all the way from packer to consumer, required new refrigerating facilities at every step in the marketing process. Many of these changes are already evident, while others are still in process of development. Each change requires increased investments of capital. The amount of capital investments is one way of measuring the change which has occurred. Also, the growth in capital requirements affects competition within the industry. Where capital requirements are high, freedom of entry may be greatly restricted. This report is designed to show the magnitude of the changes in capital requirements for processing and distributing frozen foods, and to indicate further adjustments that may be necessary and how they may affect the competitive structure of the industry. This research project is part of a continuing program designed to increase the efficiency of the marketing processes for farm products.