The European processed meat and poultry market has seen growth in the last five years, despite concerns surrounding product quality and source. The largest European markets are projected to continue to see positive growth, with the exception of Germany where a strong ‘flexitarian’ (part-time vegetarianism) movement is impacting demand.
Source: Mintel
The UK remains Western Europe’s biggest market in terms of processed meat consumption and is expected to grow 3% in the next five years. Although Germany remains an important market with the second highest consumption in Western Europe, volume has been declining, with a 2.3% drop between 2008 and 2013, and a further projected 4.6% fall between 2013 and 2018.
Italy lags behind in terms of consumption of processed meat, tying in with the fact that just 53% of Italians buy prepared ready to cook chilled or frozen meat or poultry compared to 60% in France, Germany and Spain. However, the Italian market has seen the highest growth with a 35% rise between 2008 and 2013, and is predicted to see strong volume growth in the next five years.
Meat is an important component of daily diets in Poland. Although raw products/whole cuts enjoy the strongest demand with almost 80% of Polish consumers state that they typically choose raw, whole cuts of meat, poultry or seafood, the processed meat market is experiencing healthy growth, with a CAGR of 2.5% in volume through retail channels from 2007 to 2011, and projected to grow at a CAGR of 2% in volume from 2012-16. Despite overall growth in the majority of European markets in processed meat and poultry, the European frozen red meat market has felt the impact of consumers’ increased skepticism towards processed meat following the horsemeat scandal in early 2013, and is still struggling to overcome negative perceptions on health and quality.
In the UK volume sales in the frozen meat category declined an estimated 13% between 2012 and 2013 with private-label sales of frozen burgers dropping by a fifth in the year to 20th July 2013. Birds Eye’s quick media response – the introduction of a ‘triple lock’ DNA testing program in which it promises no minced beef meat can reach the shelves without first being cleared by three separate DNA tests – and the premium 100% British positioning of its beef burgers saw the brand grow volume share, despite the circumstances.
The processed meat and poultry market is heavily dominated by private-label products with retailers such as Tesco and Lidl leading the way. Private-label has a strong presence, with a 50% share of all new launches in the European meat and poultry market in 2013, up from 43% in 2011 and 47% in 2012. In the UK however, following the horsemeat scandal, market share has fallen for private-label frozen products such as frozen burgers, where private-label fell from 47% of value sales in 2011/12 to account for 41% in 2012/13 and frozen processed poultry value sales also fell from a 50% share to 49%. Meanwhile the main branded players in the market such as Birds Eye increased share from 19% to 23% in frozen burgers.
Safety concerns grow
In the wake of last year’s horsemeat scandal in Europe, which exposed 17 UK fraudulently labeled products containing undeclared horsemeat from continental meat suppliers, only half of UK consumers now trust the food industry to provide safe food. This widespread debacle created a crisis of confidence in the UK meat supply chain, while the incident underscored the complexity of modern meat sourcing and processing and put the spotlight on meat ingredient origins and supply chain controls.
The horsemeat incident had an inevitable impact on sales of frozen beef burgers in particular as consumers sought fresh cuts of meat. While some meat and poultry users in the UK cut back altogether on how much they spent in 2013, others switched between proteins, possibly to alleviate food safety concerns.
However the scandal had less of an effect on consumer concerns than might have been expected, with just one in five expressing concern about product safety, even after the revelations about certain suppliers in the industry.
Provenance details to allay fears
Provenance, ingredients/additives and food safety protocols are among the areas which have grown in importance to meat and poultry shoppers since last year. With meat and poultry recalls and scandals receiving widespread media coverage, it is unsurprising that knowing where meat and poultry comes from is important to consumers. This is particularly true in Italy where more than half of consumers consider it important to have detailed information about where their meat, seafood or poultry comes from, and remains high in the UK with nearly four out of 10 consumers highlighting this as important.
Across Europe, a significant portion of consumers now consider local provenance to be an important attribute when purchasing meat, seafood or poultry products as they develop shopping and purchasing strategies that offer them reassurance about the origin and integrity of meats that they purchase. For example, 74% of Poles say that Polish ingredients are an important quality when purchasing these products, while for consumers in the UK, foods of British, local and regional origin have become more important, reflecting a newfound suspicion of international supply chains after the horsemeat scare. Demand for British and local ingredients has increased, with 55% consumers in the UK highlighting British ingredients as one of the most important factors when deciding what meat, seafood or poultry to buy in 2013, up from 51% in 2012.
Globally, retailers and brands have responded to consumer fears by highlighting the transparency, traceability and provenance of meat and poultry products. This includes highlighting farming details, ingredient origin, manufacturing details and certifications on packaging and elsewhere to engender consumer trust. Moving forward, ‘ultra-transparency’ can provide a viable meat innovation platform for manufacturers as well as retailers.
In Ireland, SuperValu, the country’s largest grocery and food distributor, has offered reassurance on its premium Signature Tastes brand by featuring breed specifics, Irish county of origin and farmer details on-pack. The brand also touts participation in Bord Bia’s Quality Assurance Scheme to guarantee its Irish origin. Tesco has adopted a similar strategy in the UK with its premium Finest range, providing consumers with information about producers, breeds, provenance and on-pack cattle rancher biographies with quotes offering reassurance about animal welfare practices.
Frozen meat considered too processed
Frozen food products face a considerable image challenge. Although scientific evidence exists to the contrary, frozen meat and poultry products are often not considered as nutritional or tasty as fresh products. Frozen products have a ‘processed’ image at a time when the media and food experts are championing fresh and less processed food options found on the store’s fresh perimeter for their wholesomeness and high nutrient appeal. This helps to explain the fact that consumers’ usage of fresh products exceeds that of frozen within meat and poultry.
In the UK, some 91% of adults use chilled meat, seafood or poultry compared to 80% using frozen formats. Penetration of chilled burgers has risen, compared to 2012, suggesting that these may have become a more frequent substitute for frozen varieties in the wake of the horsemeat incident. However, used judiciously, minimally processed products could have positioning power. For example, Iglo’s frozen brands Birds Eye in the UK and Iglo in Europe have begun to address consumers’ lower nutritional perceptions of frozen vegetables through product positioning that touts rapid field-to-freezer processing for maximum nutrient preservation. US companies such as Pinnacle Foods, owner of the Birds Eye brand in the US, and General Mills, owner of the Green Giant brand, have indicated that they will work to improve frozen products’ image by ramping up communication that emphasizes the convenience and time-savings of frozen options. All of this image makeover activity should have positive implications for frozen meat, poultry and seafood, hopefully bringing consumers into the frozen aisles.
As consumers have become concerned about artificial food additives and added hormones in food, retailers and branded manufacturers have responded with ‘cleaner’ product formulas and labels, significantly increasing the prevalence of no additives/no preservatives claims on meat and poultry products. Nearly a fifth of frozen meat and poultry product launches have carried no additives/preservatives claims since 2011. Halal and premium claims are also gaining share indicating a shift to more premium positioning. Looking to tap into this market, Lidl launched a number of frozen products in 2013 under its premium Deluxe brand, including the Deluxe Chuleton steak in Denmark and a Saddle of Hare (from Argentina) in Germany.
Under-25s: the most receptive category
In the UK, under-25s show significantly above-average usage of frozen prepared ready to cook meat, poultry or seafood (88% for under-25s compared to an average of 80%), especially meatballs, burgers, sausages and breaded/battered meat and poultry. In Italy, nearly a quarter (24%) of under-25s eat prepared ready to cook chilled or frozen meat, poultry or seafood 3-4 days a week, compared to the average 18%. Affordability is likely to be a key reason for their choice of frozen produce, as well as less planning being required with frozen food (apart from where it needs to be defrosted before use), providing a convenient option for young adults. Marketing this ‘freezer staple’ positioning to families and young people could prove effective.
Ethnic flavored frozen meat appeals to consumers
Red meat remains an important component for many popular ethnic meals, especially those based on Italian and
Mexican cuisines, meals that are especially popular in households with children. In the UK, a quarter of consumers prefer to cook ethnic dishes from scratch rather than buying them ready-made. As most consumers are driven by convenience and look for products that can save preparation or cooking time (45% consumers in the UK rate ‘easy to prepare’ as an important factor when cooking during the week), ethnic meal preparation is an area in which frozen products can look to target.
Currently, products positioned as ‘semi-scratch’ ethnic meal preparation at home are scarce in Europe with existing offerings including NORMA’s Gut Bartenhof Kebab in Germany, launched in 2013 comprising a hackled beef meat that is seasoned, pre-cooked and frozen. It can be cooked from frozen and ready in about five minutes.
This presents opportunities across European markets for brands to tap into the scratch cooking trend whilst offering a quick and easy, yet quality, meal option.