Convenience was the poster boy of the boom years when consumers were ‘cash rich and time poor’ and favored prepared foods and ready meals. With the economic downturn, baking, entertaining at home, and growing vegetables have become popular activities.
There is less demand for those expensive ready meals, but the basic staples, which are perceived as offering value for money, are still selling well in a recession. “We’ve seen consistent growth (in frozen food category) from March 2011,” said Brian Young, Director-General, British Frozen Food Federation (BFFF), who explained that that was the start of the double dip in the UK economy. “So the economy was back in decline and frozen foods sales increased.”
In the UK annual sales of frozen foods grew in value 6.4% to £5.5bn to the year ended 2 September 2012. He explained that frozen foods are perceived as good value for money and less wasteful, so consumers changed from more expensive chilled products to better value for money frozen equivalents. “Growth in chilled has slowed down and growth in frozen has accelerated. There are several reasons; one is everybody is finding their disposable income is squeezed. They are managing their budgets more carefully than before. There is also a greater realization that frozen food has locked in goodness and there are people like Jamie Oliver who is putting his name to some fish products this year,” said Brian Young. Although price has taken a hit in the downturn convenience is still in demand. The Consumer Lifestyles Trends (CLT) published in August 2012 by Bord Bia (Irish Food Board) has placed ‘convenience’ at the top of its list of six trends for the next five years. Under the headline ‘Fluid Lives’ Bord Bia states that life is still busy and finding time to fit in everything remains a challenge, so people still want solutions that save time or make life easier. Smart, simple ideas at affordable prices have high appeal. “Convenience is still a core trend but the issue today is, because of the recession and other priorities in their lives, consumers can no longer afford to pay a premium. At the height of the Celtic Tiger (economic boom in Ireland) people were willing to pay much more for convenient solutions but now consumers expect convenience to be part of the product proposition and the overall price,” said Helen King, Senior Business Analyst, Bord Bia, who was responsible for the CLT report.
Trends
The Bord Bia report involved studies such as Global Monitor in 21 markets and surveying 28,000 respondents, as well as research with individuals who are spread throughout 40 countries and 60 cities in every continent of the world. It offers six core trends it expects to prevail over the next 5 years. It states that convenience foods are evolving to take into account consumer demands for healthier, tasty, and home cooked food. Mintel research showed that 44% UK consumers claim to be cooking more from scratch at home, instead of eating out. “I wouldn’t say we have totally gone back to scratch cooking, but I think people are looking at putting two or three convenient foods together,” said Brian Young, BFFF. “For example we have seen in Waitrose a range of risotto where you can add frozen herbs or your own meat.” A similar 40% of Irish consumers are now claiming to cook dinner from scratch (using fresh ingredients), with half of adults meals and a quarter of children’s meals reportedly prepared completely from scratch. Bord Bia has highlighted the concept of ‘modern scratch’ where consumers seek short cuts that allow them to enhance home cooking results and achieve these with less effort. For example meal kits incorporating pre-prepared ingredients offer a combination of convenience and freshly cooked foods. Premier Foods saw sales of meal kits in the UK increase almost 9% in value year on year in 2011. Knorr stock pots have driven that category growth since their launch in 2008, and there are now frozen alternatives, all of which allow consumers to achieve depth of flavor in their home cooking quickly and conveniently.
For more adventurous consumers wishing to emulate Masterchef or other TV cooks the range and scope of ingredients and components to make a gourmet meal continues to expand. Several UK retailers have their own ranges for adventurous home cooks. The Marks & Spencer ‘Creative Cooking’ range includes frozen stocks and sauces which are individually portioned for maximum convenience.
Sainsbury’s frozen ‘ingredients for cooks’ features chopped herbs and spices, bags of chopped vegetables and ready to bake pastry dishes, priced from £1. They are designed for the freezer and quick and cost effective ways of adding a something to a meal. Chopped herbs and spices, including chilli, garlic, ginger, coriander and pesto are available in frozen cubes which can be stored away or used easily without the need to measure or chop. “There is a huge amount of sauces and other ingredients that allow people to feel they are being “chefy” and preparing it themselves, but it is all very convenient,” said Stephanie Moe, frozen food and added value meats sector manager, Bord Bia. “Going back a few years there was only frozen pastry. These are premium positioned products and they are moving away from the cheaper frozen food.”
Other trends highlighted in CLT report are the combining of healthy eating and ‘on the go’ snacks. Healthy snacks are forecast to rise globally by more than a fifth by 2014. Another consumer concern is having enough energy to get through their busy day. Satiety foods that offer slow release energy are moving more into the mainstream as large retailers launch new ranges that offer sustained and balanced energy and nutrition. According to Mintel, new satiety product launches increased 40% in Europe from 2010 to 2011.
Defining convenience
It is difficult to define convenience foods as a category because it can include everything from frozen ready meals to pizzas and certain savory products suitable for parties, and vegetables and even a microwaveable baked potato. The indulgent ice creams can also be considered a convenient treat. The entire frozen food category might well be defined as a convenience food as it can be stored safely at home. Individual portions can be removed from the freezer as required so there is no waste. Ready meals and pizza are among the categories more often linked to the term convenience.
Bord Bia estimates based on trade resources state that the frozen food market in Western Europe was valued at almost $54billion in 2009 and over 8 million kg in volume. By the end of 2014, this will be worth $63.5b, with an expected annual growth rate of 3.5% between 2009 and 2014, and in volume terms it will total 9,123.4 million kg, with an expected annual growth of 2%, between 2009 and 2014.
The frozen food market in Western Europe was led by frozen meat products, representing 34% of the total value, followed by frozen ready meals and frozen fish/seafood, with an 18% and 13% market share, respectively. Frozen pizza, frozen vegetables and frozen potato products form the next largest categories with a 10.3%, 10% and 7% market share, respectively. Frozen bakery products, frozen desserts and frozen fruit constitute the remaining categories, with a 4%, 3.5% and 1% market share, respectively.
Bord Bia forecasts the frozen ready meals market in Western Europe to grow at a CAGR of 4% between 2009 and 2014, to reach a value of $11.7b in 2014. This market is estimated to increase by $2b sales over the 2009-14 period. Meat/poultry-based ready meals are expected to be the leading segment, accounting for a predicted 33.4% share of the frozen ready meals market in 2014.
In volume terms the frozen ready meals market in Western Europe is forecast to grow at a CAGR of 2.8% between 2009 and 2014, to total 1,361.8 million kg in 2014. This market is estimated to increase by 173.3 million kg over the 2009-14 period. Meat/poultry-based ready meals are expected to be the leading segment, accounting for a 29.9% share of the frozen ready meals market in 2014. The leading players in the Western Europe frozen ready meals market are Unilever and Nestle S.A. The UK is considered one of the more advanced markets in frozen ready meals and other convenience products. Overall frozen food volume grew by 0.7% YOY and in value 6.4% to £5.5bn to the year ended 2 September 2012, according to BFFF and Kantar Worldpanel. Ready meals showed growth in value 5.6% to £690m, but also pizzas which grew by 5.9% to £411m and savory by 5.0% to £960m.
Retail
Edward Garner of Kantar Worldpanel stated in a recent presentation that there is strong interest in online shopping at supermarkets in the UK such as Tesco or Sainsbury and home delivery of frozen foods. The convenience of having frozen goods delivered to the home in suitable temperature controlled vehicles cannot be denied. The Kantar Worldpanel research finds that 20% more people are buying frozen than general groceries. Internet ordering and home delivery of frozen goods has increased every year for the last three years.
Discounting at retail outlets continues for certain frozen foods and many such products is the mainstay of the family diet and the frozen food industry. But there is an increasing demand for quality frozen meals for ‘dining-in’. This is where consumers stay at home in order to save money, but want to re-create the ‘restaurant experience’ at home. Retailers are offering up-market meals many of which are promoted with the help of celebrity chefs who lend their names to the products.
There are some retailers who specialize in this area. Picard in France, and Cook in the UK offer such high quality frozen meals for stylish at home dining and entertaining. These two companies have been expanding quickly during the last few years. Picard, which now has stores in France, Belgium and Italy and plans to go further afield, is considered “the” place to go for frozen meals and party food. The company website states that each product, whether it is fish, meat, vegetables, fruits or grains, is selected from the best possible geographic zone and flash-frozen exactly at its peak of ripeness or freshness. The flash-freezing process preserves the cellular structure of the food so that taste, texture and appearance remain the same. No additives, preservatives or stabilizers are added to the product. Cook is a UK business that sells high quality dining from the freezer. Operating its own stores, through franchised shops and home delivery, Cook offers traditional British food such as Poachers’ Pie and Brit Pot offers with Sausages, Bubble and Squeak and Fish and Chips. There is also a range of Indian and Tai food as well as children’s and baby food. The company emphasizes the ‘home cooked’ quality, and includes the name of the chef who prepared the food on the packaging.
“It is at a premium level, it is not cheap but it has been gaining market rapidly in the UK,” said Stephanie Moe who has tracked the rapid expansion of Cook throughout London and elsewhere in the UK.