Demand for some varieties of coated foods has increased in the wake of the horsemeat scandal.
Coated foods have performed better than many other types of food during the economic recession, due to trends such as the preference for lower-cost meal centers and the growth of in-home dining and entertaining. However, the sector is thought to have been aided further in parts of the EU region following the horsemeat scandal which engulfed Europe at the start of 2013. With consumer confidence in red meat taking a hit, demand for products based around poultry and seafood experienced a rise.
Coated Fish & Seafood
The Western European market for coated fish and seafood has experienced mixed fortunes in the last year, with sales having declined in Germany but risen in France. The appeal of coated fish products during times of economic hardship remains strong on account of their suitability as low-cost meal centers, while fish is increasingly valued as a healthier protein source than meat. However, competition from more natural fish and seafood remains on the strong side, a factor which is thought to have checked growth in some parts of Europe. The UK has Western Europe’s largest market for coated fish products, as might be expected in a country where almost 230 million portions of fish and chips are sold every year despite weak consumer spending levels. Sales within the UK market are heavily skewed towards the frozen sector, where products such as fish fingers and fish fillets continue to enjoy high penetration levels.
The German market for frozen coated fish and seafood products was worth an estimated EUR245m in 2012, down slightly from the previous year. One of the market’s largest sectors in value terms is fish fingers, sales of which were worth EUR115m in 2012, equivalent to 63% of overall market value.
The fish fingers sector has experienced a slight decline within the past year, despite new product activity which has featured the launch of larger-sized products, for example. Sales of frozen breaded fillets and portions, a sector which makes up most of the remaining 37% of market value, also declined in the last year, mainly as a result of strong competition from uncoated seafood. France has Western Europe’s third largest market for frozen coated fish and seafood, with sales worth EUR150m in 2012. The French market can be segmented into fish portions (worth EUR60m), fish fingers (worth EUR50m) and other speciality products such as fish nuggets and croquettes (worth EUR40m). Within the last year, growth within the coated sector has outperformed the French market for fish and seafood products. Smaller markets for coated fish exist elsewhere in the region, although sales are thought to be highest in Italy, Spain and the Benelux countries.
Coated Meat & Poultry
Meat and poultry products account for much of the remainder of the European market for coated foods. Sales remain high within both the retail and foodservice sectors, aided by the enduring popularity of products such as chicken nuggets and escalopes, as well as the switch towards cheaper groceries perceived as offering value for money. Furthermore, some types of coated poultry are also thought to have benefited from the trend towards entertaining at home, since they can be served during occasions such as parties. The UK has Western Europe’s largest market for coated meat and poultry products by some distance, with sales worth in excess of GBP500m per year. The frozen sector accounts for over GBP300m of this figure, with children’s products thought to make up a sizeable percentage of sales. Recent trends in the UK market have included the removal of artificial additives and ingredients in a bid to improve the nutritional profile of many products, as well as greater emphasis on provenance of meat (a factor which has become doubly important since the horsemeat scandal erupted) and the continued development of novel-tasting coatings.
Elsewhere, sales of breaded poultry products have increased during the last year in France, with the market thought to have been boosted by the horsemeat scandal and the corresponding switch away from red meat. In 2012, French sales of frozen breaded poultry products increased from EUR30m to EUR42m, representing an increase of 40%. During this time, market volume was worth an estimated 6,000 tons. However, the frozen sector tends to lay second fiddle to its chilled counterpart in France, with sales of breaded poultry products in the latter category worth an estimated EUR255m in 2012. The chilled sector in France is dominated by products such as chicken nuggets and cordon bleu portions. Sales of coated meat and poultry are also on the high side in Germany, owing to the popularity of schnitzels. The German market was worth an estimated EUR375m in 2012, of which the chilled sector accounts for the majority of sales. Somewhat lower markets exist across the remainder of the EU region.
Birds Eye
One of the leaders of the UK market for frozen coated and breaded fish is Birds Eye, which accounts for 30% of the country’s frozen foods market. This rises to 68% within the UK market for frozen fish fingers, where all of its products made from cod and haddock now bear the MSC label. Recent extensions to the Birds Eye range of coated fish and seafood have included Fish Fusions (coated Alaskan Pollock fillets in flavours such as Garlic & Herb and Lemon & Black Pepper), as well as Fish Fillet Burgers in cod and Pollock variants.
Birds Eye also supplies coated poultry products, all of which are marketed as being made from 100% chicken breast. Its range in this sector includes coated chicken breasts, as well as children’s products such as Chicken Burgers, Breaded Chicken Nuggets, Chicken Fingers and Crispy Chicken Dippers. The coated chicken breasts range was recently extended with a new Garlic & Herb flavor, while 2012 saw the arrival of new coated products under the Takeaway Feasts banner. The new range included Chicken Strips and Chicken Popstars, in Original and Southern Fried coatings. Birds Eye also competes outside the UK under the Iglo brand, which is present in many Western European markets and also owns the Findus brand in Italy. In France, for example, Iglo accounts for 10% of the market for frozen breaded fish and seafood, although this figure rises to more than a fifth (22%) within the frozen coated poultry sector, where the company is a fairly recent market entrant. In Germany, the Iglo range of coated foods has recently been extended with extra-large Fish Sticks and Carlchen’s Dippers, coated chicken products targeted at children.
Findus
One of the company’s main rivals is The Findus Group, which claims to be one of Western Europe’s largest suppliers of frozen foods. The company – which currently boasts a turnover worth in the region of GBP1bn – is segmented into three regional clusters, namely the UK, Scandinavia and Southern Europe (e.g. France and Spain). Findus competes in the market for frozen coated fish and seafood (e.g. fish fingers and coated fish portions), as well as crispy pancakes. In the UK, the company’s Young’s brand has a heritage stretching back to the nineteenth century, and supplies frozen and chilled fish and seafood products to customers within the retail, industrial and foodservice sectors.
The Young’s range encompasses more than 30 different species, with more than 300 million seafood dishes prepared every year. The company places a strong emphasis on sustainability, via its Fish for Life scheme. One of the company’s best-sellers is Young’s Chip Shop, which accounts for a leading 44% of the UK market for frozen battered fish portions. The range includes Fish Cakes, Fish Fingers, Scampi Bites and Fish Steaks, whilst recent additions have included Large Cod and Haddock Fillets. Other notable coated products include children’s lines (e.g. Flipper Dippers) and Jamie Oliver-branded Crispy Pollock Fishcakes and Fish Fillet Fingers. Elsewhere, the Findus brand accounts for a leading 53% of the French market for frozen breaded fish and seafood. The company’s Croustibat range includes a variety of coated fish and seafood lines, and sells 180 million fish fingers per year. The range was recently extended with Croustibat Puzzle, which appeared at the start of 2013. This was described as comprising different pieces of frozen coated fish which can be assembled to form the Croustibat character.
Other major suppliers
A number of fish and seafood companies also compete in the market, although coated products sometimes only account for a modest percentage of overall sales. One example in the UK is Whitby Seafoods, a family-owned business which is making increasing inroads into the country’s retail fish market. The company is one of the UK’s leading suppliers of scampi to the foodservice sector, and its range also includes Cod Bites and Fillet Goujons. Further afield, one of Europe’s largest fish and seafood companies is Pescanova of Spain, whose range includes a number of coated products. At the time of writing, however, Pescanova is seeking bankruptcy protection, amidst accusations of falsified accounting.
Meanwhile, Frosta represents one of Germany’s leading frozen food brands, and also has a presence in other countries such as Austria and Switzerland. The company is one of Germany’s leading producers of fish fingers, having upgraded its manufacturing capabilities at the end of 2012. Bernard Matthews, which represents the leading supplier of turkeys and turkey products in the UK, also competes within the UK coated poultry products market. The company is well-known for breaded lines such as Golden Drummers, Turkey Burgers, Turkey Dinosaurs and Turkey Nuggets, all of which are now marketed as being free from artificial ingredients. Bernard Matthews is especially strong within the market for children’s coated products, where its range was recently extended with new Turkey Frisbees and Turkey Numbers.
Coated products also represent a major product area for Cargill Meats Europe, which counts amongst its customers some of the region’s leading foodservice restaurants – one notable example is McDonald’s, where the company supplies Chicken McNuggets. The company, which also supplies the retail and own-label sectors, operates three production facilities in the UK (in Hereford, Wolverhampton and Newent), as well as additional sites in France and Russia. Most of the company’s poultry is sourced from Brazil and Thailand.
Other players
Europe’s leading supplier of poultry meat is the French-based Doux Group, which exports whole and processed products to 130 countries spread across five continents. However, the company has been in administration for more than a year now, on account of having high debt levels. Its business has been restructured, a move which saw its Brazilian operations sold to JBS. Many of its leading lines appear under the Pere Dodu range, especially for breaded poultry products such as chicken bites, nuggets, goujons, kievs and cordon bleu portions.
Another French-based poultry meat producer is LDC Group, which has expanded following a number of acquisitions and joint ventures. Volume sales of poultry meat increased from 634,177 tons to 658,772 tons in the latest financial year. LDC’s business includes poultry-based products (including meat varieties such as chicken, turkey, duck and rabbit) and delicatessen meats, examples of which include sausages, breaded poultry portions and cooked meats. Its Le Gaulois brand accounts for an estimated 23% of the French market for chilled breaded poultry products, where it lies in second position.
Other noteworthy European-based suppliers of coated meat and poultry products include the Dutch-based Plukon Food Group (whose Friki brand includes value-added convenience products such as coated nuggets, schnitzels and cordon bleu portions), as well as Vion Food Group. This company supplies coated poultry products in markets such as Germany and the Netherlands, examples of which include Chicken Nuggets, Chicken Escalopes and Chicken and Turkey Schnitzels. Own brands are also present in many parts of Europe – for example, the own-label sector accounts for 65% of French sales of frozen breaded chicken products.