Frozen food 'demand is different, compared to March,' still up more than 20%: Nomad Foods CEO

Stefan Descheemaeker, Nomad Foods CEO, joins Yahoo Finance's Alexis Christoforus and Brian Sozzi to discuss the surge in demand for frozen food over the past few months, how the company is keeping up with the demand and future outlook for the company.

Video Transcript

ALEXIS CHRISTOFOROUS: Nomad Foods is Europe's leading frozen food company. Last week, it posted a 10 and 1/2% jump in revenue year-over-year, driven by an unprecedented demand for frozen food in the wake of the COVID-19 pandemic. Joining us now is Nomad's CEO, Stefan Descheemaeker. Stefan, good to see you, and thanks for making time for us.

STEFAN DESCHEEMAEKER: Good morning, Alexis.

ALEXIS CHRISTOFOROUS: The first quarter that your company was able to put up, tell us what business conditions are like in the second quarter. Are you still seeing heavy demand for frozen food?

STEFAN DESCHEEMAEKER: The simple answer, Alexis, is yes. It's a bit different compared to March. March was a bit like in the US. You know, we had two weeks of some sort of pantry loading, so in the region of 40%. And now we're more in the 20% since the beginning of the quarter.

Which again, you know, it's not abnormal that it went that way. To your point, we are the leader. We order both frozen-- we 100% frozen. We 95% retail, which means at-home consumption. And we have leading brands, like Birds Eye in the UK, or Iglo in the rest of the continent.

So all these are iconic brands. And people obviously do trust these brands, which is important during these times.

BRIAN SOZZI: Stefan, you guys pretty much dominate Europe in terms of frozen food. But as-- what have you seen in the business at some of these economies have reopened?

STEFAN DESCHEEMAEKER: Well, you know, it's-- I wasn't listening to the-- the other people before my time. And actually, it takes time. So we're talking about reopening. But actually, what's really happening is country-by-country. It's very staggered.

For example, schools are starting to reopen. But it's going to be with social distancing. It's going to be 10%, 15% of the students or the children.

Same thing working from home. With Nomad, for example, I would guess by the end of June, 15% of the people will have come back to the office. And I'm not even talking about restaurants.

So everything is really-- you know, it's going to take time. And again, that's what we have in mind. At the same time, what we don't know is will people come?

Because you have the rules. And then people obviously want to go back to work. But they also want to be safe.

ALEXIS CHRISTOFOROUS: Stefan, how much of the uptick in business has been from people trying frozen foods for the first time? I mean, how much is this really an opportunity for you to sort of have your product shine, and maybe retain some of these folks as permanent customers post this pandemic?

STEFAN DESCHEEMAEKER: Alexis, it's a great question, because beyond the 40%, which is more a one-off, I think the key point for us is we have seen a lot of new consumers, sometimes previous consumers that left the category, and then new consumers. And what they see is they see--

[AUDIO OUT]

ALEXIS CHRISTOFOROUS: Oh, you know what, Stefan? I'm sorry, I think you hit the mute button there. If you could just unmute.

STEFAN DESCHEEMAEKER: Sorry.

ALEXIS CHRISTOFOROUS: You're back. You're back. OK, so go ahead. We just missed the back end of that.

STEFAN DESCHEEMAEKER: So what I was about to say is definitely, the new consumers, what they see with the category is not only in something which is affordable. It's nutritious. It's healthy. It's [INAUDIBLE].

You know, the waste level is much lower than anything else. And so definitely they-- we know that they're going to come back. And they're going to come back with our brands. And that's our job mostly, to make sure that they're going to stay with us.

So it's-- I think that's very important. That's the most important piece of this thing. The new normal, we believe that a lot of these people will stay with us, especially with things like-- you know, people like scratch cooking, for example. It will stay a bit more working from home anyway.

So we definitely believe that we have what it takes with our brands, and also with our new-- with our new categories, like plant protein with Green Cuisine, which is great, doing extremely well, to keep them.

BRIAN SOZZI: Stefan, you raised a good chunk of money last year. And you made it-- you didn't hide the fact you were looking for acquisitions. Anything on your radar screen? And do you have interest in getting into the US market?

STEFAN DESCHEEMAEKER: The first-- we were very clear, the first priority for us is to finish the game. I wouldn't say finish the game, but at least complete the game in the frozen food industry in Europe. So there are some countries where we're not present yet. There are some categories where we're not present yet.

And that's where, definitely in terms of synergies, where we can play our roll the best way. So that's going to be a priority number one. If at some stage there would be something appealing in the US, definitely in our category. Why not?

But the first category-- the first criteria for us is let's play where we know that the synergies are going to be the highest, which is Europe, frozen foods.

ALEXIS CHRISTOFOROUS: Stefan, before we let you go, I know you're laser focused on your supply chain right now. What are you doing to ensure that you have enough product to meet this unprecedented demand?

STEFAN DESCHEEMAEKER: Again, an excellent question. The first thing is all our plants are open, operating since the beginning. So that's one thing.

The second piece is we started very early on with all these new rules, social distancing. We probably were among the first ones to install in all our plants thermographic portals, where people had to go through, check the temperature. And obviously, that serves as a convenient way to start to obviously test people.

And we've done this with-- with-- with obviously our people in mind in terms of health and safety. I'm very proud of what the people have been able to do, because again, you know, you always have to have concern for your safety. But we've been able to do this-- and this together with the retailers, by the way, because we have first prioritized the big items, those that obviously are selling with the highest volume, so as to keep our-- or let's say our supply chain, let's say the leanest and the fittest as possible.

So we're doing fine. There are some pressures, obviously. But overall, it's doing-- we're doing fine. And yeah, and let's keep going that way.

ALEXIS CHRISTOFOROUS: All right, we're glad to hear that. Nomad Foods CEO Stefan Descheemaeker, always a pleasure. Good to see you this morning.

STEFAN DESCHEEMAEKER: Thank you very much, Alexis. Thanks, Brian.