Prepared Meals Review - UK - May 2014

INTRODUCTION
Definition
Excludes
Abbreviations
EXECUTIVE SUMMARY
The market
The future
Figure 1: Forecast of UK retail sales of prepared meals, by value, 2008-18
Market factors
Horsemeat scare hits ready meals in 2013
Operators look to premiumisation
Companies, brands and innovation
Own-label holds the lead in ready meals
Figure 2: Leading brands’ shares in the UK chilled ready meals market, by value, 2014*
NPD looks to world flavours and low/no/reduced sodium variants
Heinz leads adspend, despite reducing support in 2013
The consumer
88% of UK adults eat prepared meals
Figure 3: Types of prepared meals eaten, March 2014
More than a quarter are buying fewer prepared meals
Figure 4: Changes in purchase patterns of prepared meals over the last six months, March 2014
Ready meals are the most widely seen as convenient
Figure 5: Correspondence analysis of qualities associated with prepared meals, March 2014
Variety of pizza bases would appeal to a third of prepared meal buyers
Figure 6: Agreement with statements on prepared meals, March 2014
What we think
ISSUES AND INSIGHTS
Emphasising involvement in the cooking process could help to mitigate the scratch cooking threat
The facts
The implications
Consumer interest in new cuisines poses an opportunity for flavour innovation
The facts
The implications
Rising incomes will create scope for encouraging trading up
The facts
The implications
Promoting vegetable content in prepared meals could improve health image
The facts
The implications
TREND APPLICATION
Trend: Many Mes
Trend: Survival Skills
Mintel futures: Brand Intervention
MARKET DRIVERS
Key points
Cooking from scratch continues to appeal
Figure 7: Selected cooking and eating habits, March 2012-February 2014
Prepared meals look to encourage trading up as spending and confidence rise
Figure 8: GfK NOP consumer confidence index, monthly, January 2008-March 2014
Winter temperatures jump in 2013/14
Figure 9: Mean winter* temperatures, UK, 2008/09-2013/14
Demographic changes create opportunities for prepared meals
Rise in 25-34s bodes well for the market
Figure 10: Trends in the age structure of the UK population, 2008-13 and 2013-18
That ABs account for one in four adults should continue to benefit chilled formats
Ready meals should benefit from predicted rise in one-person households
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Prepared meals such as ready meals dominate NPD, although all manufacturers cut back in 2013
Figure 11: New product launches in the prepared meals market, by sub-category, 2010-14
NPD looks to cater to more adventurous tastes
World cuisines such as Brazilian provide inspiration for NPD
Operators look to premiumisation to add value
Ready meals
Pizza
Alternative pizza bases would appeal to a third of prepared meal buyers
Soup
Pies
Manufacturers look towards healthier NPD
Low/no/reduced sodium versions become more popular
Figure 12: Index of new product launches across the prepared meals sector, by selected health claims, 2010-13
Skinny soups
Naturalness is also a driver
Pizza manufacturers look to address health concerns
Ready meals manufacturers look to added veg content as a way to help consumers
Extending the soup season
Gazpacho offers an opportunity to deseasonalise soup
MARKET SIZE AND FORECAST
Key points
2013 sees a slight decline in overall value sales
Figure 13: UK retail value sales of prepared meals, 2008-18
Figure 14: UK retail value sales of prepared meals, by segment, 2008-18
Forecast
Figure 15: Forecast of UK retail sales of prepared meals, by value, 2008-18
Methodology
SEGMENT PERFORMANCE
Key points
Ready meals
Chilled ready meals dominate
Figure 16: UK retail value and volume sales of ready meals and ready-to-cook foods, by category, 2011-13
Horsemeat scare has a negative effect on frozen ready meals
Ready-to-cook foods see a decline in sales
Pizza
Chilled pizza leads by value, frozen by volume
Figure 17: UK retail value and volume sales of pizza, by sector, 2011-13
Soup
Wet soup accounts for more than 80% of the market
Figure 18: UK retail value sales of soup, by sector, 2011-13
Pies and pasties
Hot pies lead the segment by value sales, despite a drop in 2013
Figure 19: UK retail value and volume sales of pies and pasties, by type, 2011-13
MARKET SHARE
Key points
Ready meals
Own-label accounts for more than 90% of chilled ready meal market
Figure 20: Leading brands’ sales and shares in the UK chilled ready meals market, by value and volume, 2012/13 and 2013/14
Brands fail to see growth
Smaller brands see mixed fortunes
Few players manage growth in frozen ready meals
Figure 21: Leading brands’ sales and shares in the UK frozen ready meals market, by value and volume, 2012/13 and 2013/14
Limited branded presence within ready-to-cook foods
Figure 22: Sales and shares in the UK ready-to-cook chilled meals market, by own-label and brands, by value and volume, 2012/13 and 2013/14
Pizza
Chicago Town and Goodfella’s lead frozen pizza market, while seeing mixed fortunes
Figure 23: Leading brands’ sales and shares in the UK frozen pizza market, by value and volume, 2012/13 and 2013/14
Soup
Heinz retains its lead, despite falling sales
Figure 24: Leading brands’ sales and shares in the UK soup market, by value, 2012/13 and 2013/14
Pies and pasties
Own-label dominates chilled pies and pasties
Figure 25: Leading brands’ sales and shares in the UK chilled pies and pasties, by value and volume, 2012/13 and 2013/14
COMPANIES AND PRODUCTS
 PRIVATE LABEL
Figure 26: Own-label ready meal sub-brands, by top grocery retailers, 2013/14
Asda
Marks & Spencer (M&S)
Morrisons
Sainsbury’s
Tesco
Waitrose
 BRANDED READY MEALS
Heinz (Weight Watchers)
Product range and innovation
Promotion and advertising
Birds Eye
Product range and innovation
 PIZZA
Dr. Oetker (Chicago Town and Dr. Oetker)
Product range and innovation
Promotion and advertising
2 Sisters Food Group (Goodfella’s, San Marco)
Product line and innovation
Promotion and advertising
 SOUP
Heinz
Product range
Product innovation
Promotion and advertising
New Covent Garden
Product line and innovation
 PIES AND PASTIES
Ginsters
Product line and innovation
Promotion and advertising
BRAND COMMUNICATION AND PROMOTION
Key points
Adspend continues to fall since 2011
Figure 27: Main monitored advertising expenditure in the UK prepared meals, pizza, soup and pies and pasties categories, 2010-14
Ready meals dominate adspend
Figure 28: Main monitored advertising expenditure in the UK prepared meals, pizza, soup and pies and pasties categories, 2010-14
Pizza holds a 17% share
Heinz leads adspend but cuts back in 2013
Figure 29: Total media advertising expenditure on prepared meals, by top 10 advertisers (sorted by 2013), 2010-14
Dr. Oetker focuses on TV
Retailers increase investment
General Mills reduces spend
CHANNELS TO MARKET
Key points
Supermarkets account for 60p in every £1 spent on prepared meals
Figure 30: Estimated consumer spending on prepared meals, by type of retailer, 2013
THE CONSUMER – USAGE OF PREPARED MEALS
Key points
Some 88% of UK adults eat prepared meals
Figure 31: Types of prepared meals eaten, March 2014
Frozen pizza proves popular among nearly 50%
Figure 32: Types of prepared meals eaten, March 2014
Just over half eat ready meals
Usage of soup products varies by age
Figure 33: Types of soup eaten, by age, March 2014
Chilled formats attract an affluent user base
Figure 34: Types of prepared meals eaten, by socio-economic group and household income, March 2014
Opportunities to use products of detailed origin as an ingredient
Frequency of usage
Figure 35: Frequency of eating prepared meals, March 2014
Three in 10 eat pizza, soup and ready meals
Figure 36: Crossover in types of prepared meals eaten, March 2014
A fifth eat more than six types of prepared meals
Figure 37: Repertoire of types of prepared meals eaten, March 2014
THE CONSUMER – BUYING HABITS OF PREPARED MEALS
Key points
More than seven in 10 buy prepared meals
Figure 38: Purchasing of prepared meals, March 2014
Over a quarter are buying fewer prepared meals, while 15% are buying more
Figure 39: Changes in purchase patterns of prepared meals over the last six months, March 2014
A reduction in scratch cooking and improvements to quality cause a third to buy more
Figure 40: Reasons for buying more prepared meals, March 2014
Seven in 10 are buying fewer prepared meals as they are cooking from scratch more often
Figure 41: Reasons for buying fewer prepared meals, March 2014
THE CONSUMER – QUALITIES ASSOCIATED WITH PREPARED MEALS
Key points
Ready meals are seen most widely as convenient
Figure 42: Correspondence analysis of qualities associated with prepared meals, March 2014
Figure 43: Qualities associated with prepared meals, March 2014
Figure 44: Associations of prepared meals with ‘convenient’, by age, March 2014
More than two in five see ready meals as processed
Soup has the healthiest profile
Almost three in 10 see pizza as good for sharing
Methodology
THE CONSUMER – ATTITUDES TOWARDS PREPARED MEALS
Key points
Variety of pizza bases would appeal to a third of prepared meal buyers
Figure 45: Agreement with statements on prepared meals, March 2014
Added veg proposition could help to improve health perceptions
Expanding availability of low-salt/fat ready meals would appeal to almost three in 10
Opportunities for emerging cuisines
Soup kits would appeal to the young
APPENDIX – MARKET DRIVERS
Figure 46: Trends in how respondents would describe their financial situation, February 2009 and March 2014
Figure 47: GDP, PDI, consumer expenditure and savings, at constant 2013 prices, 2008-18
Figure 48: Forecast adult population trends, by socio-economic group, 2008-18
Figure 49: UK households, by size, 2008-18
Figure 50: Forecast adult population trends, by lifestage, 2008-18
APPENDIX – WHO’S INNOVATING?
Figure 51: Share of new product launches within the UK prepared meals market, by claim, 2010-14
APPENDIX – MARKET SIZE AND FORECAST
Figure 52: Best- and worst-case forecasts for retail sales of prepared meals, by value, 2013-18
Chilled ready meals
Figure 53: Forecast of UK retail sales of chilled ready meals, by value, 2008-18
Figure 54: Best- and worst-case forecasts for retail sales of chilled ready meals, by value, 2013-18
Frozen ready meals
Figure 55: Forecast of UK retail sales of frozen ready meals, by value, 2008-18
Figure 56: Best- and worst-case forecasts for retail sales of frozen ready meals, by value, 2013-18
Ready to cook foods
Figure 57: Forecast of UK retail sales of ready to cook foods, by value, 2008-18
Figure 58: Best- and worst-case forecasts for retail sales of ready to cook foods, by value, 2013-18
Pizza
Figure 59: Forecast of UK retail sales of pizza, by value, 2008-18
Figure 60: Best- and worst-case forecasts for retail sales of pizza, by value, 2013-18
Soup
Figure 61: Forecast of UK retail sales of soup, by value, 2008-18
Figure 62: Best- and worst-case forecasts for retail sales of soup, by value, 2013-18
Pies and pasties
Figure 63: Forecast of UK retail sales of pies and pasties, by value, 2008-18
Figure 64: Best- and worst-case forecasts for retail sales of pies and pasties, by value, 2013-18
APPENDIX – THE CONSUMER – USAGE OF PREPARED MEALS
Figure 65: Types of prepared meals eaten, March 2014
Figure 66: Most popular types of prepared meals eaten, by demographics, March 2014
Figure 67: Next most popular types of prepared meals eaten, by demographics, March 2014
Figure 68: Other types of prepared meals eaten, by demographics, March 2014
Frequency of usage
Figure 69: Frequency of eating prepared meals, March 2014
Figure 70: Frequency of eating prepared meals – Ready meal stored at room temperature, by demographics, March 2014
Figure 71: Frequency of eating prepared meals – Chilled ready meal, by demographics, March 2014
Figure 72: Frequency of eating prepared meals – Frozen ready meal, by demographics, March 2014
Figure 73: Frequency of eating prepared meals – Dry packet soup, by demographics, March 2014
Figure 74: Frequency of eating prepared meals – Ready-to-cook foods, by demographics, March 2014
Figure 75: Frequency of eating prepared meals – Chilled soup, by demographics, March 2014
Figure 76: Frequency of eating prepared meals – Soup stored at room temperature, by demographics, March 2014
Figure 77: Frequency of eating prepared meals – Chilled pizza, by demographics, March 2014
Figure 78: Frequency of eating prepared meals – Pastry-based pies and pasties, by demographics, March 2014
Figure 79: Frequency of eating prepared meals – Frozen pizza, by demographics, March 2014
Figure 80: Frequency of eating prepared meals – Meal kits stored at room temperature, by demographics, March 2014
Figure 81: Usage of ready meals, soup and pizza, by demographics, March 2014
Repertoire
Figure 82: Repertoire of types of prepared meals eaten, March 2014
Figure 83: Repertoire of types of prepared meals eaten, by demographics, March 2014
APPENDIX – THE CONSUMER – BUYING HABITS OF PREPARED MEALS
Figure 84: Purchasing of prepared meals, March 2014
Figure 85: Purchasing of prepared meals, by demographics, March 2014
Figure 86: Changes in purchase patterns of prepared meals over the last six months, March 2014
Figure 87: Changes in purchase patterns of prepared meals over the last six months, by demographics, March 2014
Figure 88: Reasons for buying more prepared meals, March 2014
Figure 89: Reasons for buying fewer prepared meals, March 2014
Figure 90: Most popular reasons for buying fewer prepared meals, by demographics, March 2014
Figure 91: Next most popular reasons for buying fewer prepared meals, by demographics, March 2014
APPENDIX – THE CONSUMER – QUALITIES ASSOCIATED WITH PREPARED MEALS
Figure 92: Qualities associated with prepared meals, March 2014
Figure 93: Most popular qualities associated with prepared meals – Ready meals, by demographics, March 2014
Figure 94: Next most popular qualities associated with prepared meals – Ready meals, by demographics, March 2014
Figure 95: Most popular qualities associated with prepared meals – Soup, by demographics, March 2014
Figure 96: Next most popular qualities associated with prepared meals – Soup, by demographics, March 2014
Figure 97: Most popular qualities associated with prepared meals – Pizza, by demographics, March 2014
Figure 98: Next most popular qualities associated with prepared meals – Pizza, by demographics, March 2014
Figure 99: Most popular qualities associated with prepared meals – Pastry-based pies and pasties, by demographics, March 2014
Figure 100: Next most popular qualities associated with prepared meals – Pastry-based pies and pasties, by demographics, March 2014
Figure 101: Words associated with prepared meals, by purchasing of prepared meals, March 2014
APPENDIX – THE CONSUMER – ATTITUDES TOWARDS PREPARED MEALS
Figure 102: Agreement with statements on prepared meals, March 2014
Figure 103: Most popular statements on prepared meals, by demographics, March 2014
Figure 104: Next most popular statements on prepared meals, by demographics, March 2014