Ready meals are currently one of the most dynamic sectors in the global packaged food market, registering value growth of nearly 4% during 2002. While developed US, UK and Japan markets, which account for 66% of global value sales, clearly dominate, key emerging markets of Eastern Europe, in particular, are also increasingly attracted by the convenience of such products. Per capita consumption in the Czech Republic, for instance, is at over 5kg comparable to that in Germany, and total market value in the region grew by 11% during 2002.
The demise of the family meal
In both developed as well as emerging markets, the trend towards longer and varying working hours has led to the gradual demise of the traditional family meal and the concurrent increase in demand for individual meal solutions. The rising number of single households and a general trend towards smaller households, which are less inclined to devote their free time on the lengthy preparation of meals, has also been beneficial for ready meals. The decline in culinary skills among the younger generation has undoubtedly also had a positive impact in demand for such easy-to-prepare products.
Popular in the UK and Scandinavia
Ready meals have become very popular among UK and Scandinavian households, where consumption levels are higher than anywhere else in the world: per capita consumption of ready meals in the UK was nearly 16kg in 2002, and at 10kg consumption is also comparatively high in Sweden and Denmark. The demand for convenience by UK consumers is most clearly illustrated by the fact that the UK has, after Japan and Canada, one of the highest penetration rates of microwave ovens in the world: in 2002, over 87% of UK households owned a microwave. Both the UK as well as Sweden and Denmark are furthermore characterised by relatively small households. Sweden in fact has the world’s lowest average household size at just two persons.
Chilled and frozen lead
The steady rise in the number of single and dual-income households has spurred demand within the premium end of the market. Leading more stressful lives, while at the same time having more disposable income, these households are particularly attracted to premium product offerings and appreciate the wide variety of ready meals, especially in terms of ethnic cuisine. This demographic group is primarily responsible for the strong growth of chilled ready meals, whose USP is the perceived freshness and superior quality in comparison to canned or frozen products.
While single and dual-income households with no children clearly drive growth of chilled ready meals, frozen meals continue to be the preferred option by family households with children, which are generally more price sensitive, but nevertheless equally time-pressured and also on the look-out for quick-to-prepare food solutions.
Globally, between 1998 and 2002 frozen and chilled ready meals achieved compound annual growth rates of about 4.5%, while dried and canned ready meals lagged behind mainly as they are perceived to be of inferior nutritional quality. Canned ready meals, as did canned food in general, recorded a drop in salesover the same period largely because the products do not carry a healthy and tasty image.
Some challenges to be overcome
While the perceived healthiness and freshness of chilled ready meals, and the convenience of frozen ready meals, helped boost growth, current negative press coverage regarding their high fat and salt content could deter consumers from using ready meals on a regular basis.
Furthermore, products which encourage consumers’ input and which are nevertheless quick to prepare, such as dinner kits, give consumers the feeling of having more control over the final result. Such products are consequently likely to fare well and, depending on variety and availability, could even dampen growth of ready meals.
However, lifestyle and demographic trends will undoubtedly continue to provide ready meals manufacturers with a growing consumer base, and given that manufacturers recognise the need to provide a healthy product offering and continue to focus on flavour and variety, the outlook for ready meals will indeed remain positive. Globally, ready meals are forecast to record growth of close to 18% between 2002 and 2007.