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Prepared Meals and Meal Kits - UK - May 2011

INTRODUCTION
Definition
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Prepared meals market size and forecast, 2005-15
2010 sees the market return to stronger growth
The future
Market factors
Moderate consumption
Premiumisation and healthier products needed to engage the ageing population
Balancing convenience with other determining factors
Companies, brands and innovation
Figure 2: Estimated market share of chilled ready meals, 2010
Own-label leverages power of scale
NPD continues to drive the market
General Mills looks to TV
The consumer
Figure 3: Types of prepared meals and meal kits eaten or bought in the last 12 months, March 2011
Ready meals dominate the market
Ready meal users rate convenience, meal kits users enjoy customising
Figure 4: Agreement with statements on chilled/frozen ready meals and meal kits, by those who have bought/eaten ready meals and meal kits in the last 12 months, March 2011
What we think
ISSUES IN THE MARKET
Can new cuisines prevent the ready meals category from losing share?
Can innovation help broaden the consumer base?
Can meal kits help grow ready meals penetration among families?
Can premiumisation continue to deliver growth in the ready meals category?
How much potential is there for meal kits and ready-to-cook foods?
FUTURE OPPORTUNITIES
FSTR and HYPR
Extend My Brand
INTERNAL MARKET ENVIRONMENT
Key points
A need to increase more regular consumption
Figure 5: Trends in frequency of use of ready meals – chilled and frozen, 2010
Cooking from scratch poses a threat to prepared meals
Figure 6: Trends in agreement with attitudes towards cooking, 2006-10
Frozen ready meals could benefit from strong support for frozen food
Figure 7: Agreement with the statement ‘Frozen foods are as good for you as fresh foods’, 2006-10
Customisation aids meal kits and ready-to-cook foods
Health remains a focus area, with half of consumers trying to eat healthily
Figure 8: Trends in agreement with selected lifestyle statements on health, 2006-10
BROADER MARKET ENVIRONMENT
Key points
The squeeze on incomes could challenge growth
Figure 9: RPI and average weekly earnings, January 2005- February 2011
Food prices having an effect on consumer behaviour
Demographic changes
Growth in 25-34s will provide a boost to the sector
Figure 10: Trends in the age structure of the UK population, 2005-10 and 2010-15
One-person households will enhance ready meals sales
Figure 11: Trends in UK households, by size, 2005-10 and 2010-15
Rising number of C1s aids growth
Figure 12: Forecast adult population trends, by socio-economic group, 2005-15
COMPETITIVE CONTEXT
Key points
A competitive set of meal options
Figure 13: UK retail sales of selected categories of prepared meals, by value, 2010*
Figure 14: UK retail sales of selected categories competing with prepared meals, percentage change in value, 2005-10*
Competing with eating out?
Cooking sauces offer a convenient cooking experience
Pizza retains popularity
Scratch cooking poses a threat to prepared meals
Sandwiches continue to dominate lunchtime options
Figure 15: Performance of sandwich market, market sizes, 2005-10*
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Own-label dominates NPD
Figure 16: New product launches in the prepared meals and meal kits market, own-label vs brands, 2008-10
Premiumising the category through quality ingredients
Standing out in a competitive market
Health remains an issue
Looking to foodservice for inspiration
Flavour innovation contributes to family-friendly positioning
Ease of use appeals to one-person households
MARKET SIZE AND FORECAST
Key points
The market sees stable growth
Figure 17: UK retail sales and forecast of prepared meals, by value, 2005-15
Future growth in the market
Figure 18: Prepared meals market size and forecast, 2005-15
Segmentation
Figure 19: Chilled ready meals market size and forecast, 2005-15
Figure 20: Frozen ready meals market size and forecast, 2005-15
Figure 21: Ready-to-cook foods market size and forecast, 2005-15
Figure 22: Pies and pasties market size and forecast, 2005-15
Methodology
SEGMENT PERFORMANCE
Key points
Ready meals see steady growth
Figure 23: UK retail value sales and forecast of chilled and frozen ready meals, 2005-15
British cuisine dominates the prepared meals market
Figure 24: Market segments in the chilled and frozen ready meals market, by cuisine, 2009 and 2010
Ready-to-cook foods also find British favour
Figure 25: Market segments in the ready-to-cook foods market, by cuisine, 2009 and 2010
Standard segment continues to dominate the market
Figure 26: Market segments in the chilled and frozen ready meals and ready-to-cook foods market, by type, 2009 and 2010
Chilled options dominate pies and pasties market
Figure 27: Market segments in the pies and pasties market, by type, 2010
MARKET SHARE
Key points
M&S grows share in chilled ready meals
Figure 28: Estimated manufacturer shares in retail value sales of chilled ready meals, 2010
Heinz’ Weight Watchers dominates frozen ready meals
Figure 29: Estimated manufacturer shares in retail value sales of frozen ready meals, 2009 and 2010
COMPANIES AND PRODUCTS
Asda
Birds Eye
Findus
Heinz
Marks & Spencer
Morrisons
Sainsbury’s
Tesco
Waitrose
 MEAL KITS
Blue Dragon
Discovery Foods
Old El Paso
BRAND COMMUNICATION AND PROMOTION
Key points
2010 sees a return to advertising investment
Figure 30: Main monitored advertising expenditure on prepared meals and meal centres market, by top 20 companies, 2006-11*
General Mills dominates expenditure
Figure 31: Advertising expenditure by top ten companies, in the UK prepared meals and meal kits market, 2006-10
Figure 32: Advertising expenditure by brand, in the UK prepared meals and meal kits market, 2006-10
CHANNELS TO MARKET
Key points
Supermarkets leverage scale of distribution
Figure 33: Food, drink and tobacco – estimated channels of distribution, 2009
Premium stores prove popular
Figure 34: Index of supermarkets used by prepared meals and meal kit users (Average = 100), March 2011
THE CONSUMER – USAGE
Key points
Ready meals remain the most popular type of prepared meal
Figure 35: Prepared meals/meal kits eaten or bought in the last 12 months, March 2011
25-34s are the core users of prepared meals and meal kits
Figure 36: Index of prepared meals and meal kits eaten or bought in the last 12 months, by gender, age and socio-economic group (Average = 100), March 2011
Appealing to different sized households
Figure 37: Prepared meals/meal kits eaten or bought in the last 12 months, by household size, March 2011
Brands dominate meal kits
Figure 38: Prepared meals/meal kits eaten or bought in the last 12 months, by brand or own-label, March 2011
Premium own-label variants prove popular for chilled ready meals and ready-to-cook foods
Frozen dominated by brands and standard varieties
British meals find favour with consumers
Figure 39: Trends in kinds of ready meals – chilled or frozen (excluding pizzas) used, 2006-10
Notable crossover between the convenient categories
Figure 40: Crossover in usage of prepared meals, March 2011
THE CONSUMER – GENERAL EATING/COOKING HABITS
Key points
Figure 41: Agreement with statements on eating and cooking habits, March 2011
Scratch cooking could threaten the market
Catering to eating habits
Figure 42: Index of agreement with statements on eating and cooking habits, by gender, age, socio-economic status and annual household income, (Average = 100), March 2011
Appealing to the health-conscious consumer
Figure 43: Agreement with statements on eating and cooking habits, by gender, March 2011
Travelling has a limited impact on tastes
Figure 44: Agreement with statements on eating and cooking habits, by age, March 2011
CONSUMER ATTITUDES TOWARDS READY MEALS AND MEAL KITS
Key points
Figure 45: Statements on ready meals and meal kits*, March 2011
Recreating the restaurant experience at home
Convenience appeals to the majority
Figure 46: Agreement with statements on ready meals and meal kits, by age, March 2011
Meal kit users look for different things than ready meal users
Figure 47: Agreement with statements on chilled/frozen ready meals and meal kits, by those who have bought/eaten ready meals and meal kits in the last 12 months, March 2011
Quality image has improved, health perception lags behind
Figure 48: Index of agreement with statements on ready meals and meal kits, by gender, age, socio-economic status and annual household income, (Average = 100), March 2011
CONSUMER ATTITUDES TOWARDS READY-TO-COOK FOODS
Key points
Women are more engaged in the category
Figure 49: Index of agreement with statements on ready-to-cook foods, by gender (Average = 100), March 2011
Convenience element staves off competition from scratch cooking
Figure 50: Statements on ready-to-cook foods, March 2011
Confusion over the category is still apparent
Figure 51: Index of agreement with statements on ready-to-cook foods, by gender, age, socio-economic group and annual household income (Average = 100), March 2011
Cost savings help the category compete with foodservice
Figure 52: Agreement with the statement ’Ready-to-cook foods are a cheaper alternative to a takeaway/eating out’, March 2011
Positive associations will help to boost the category
Figure 53: Statements on ready-to-cook foods, March 2011
THE CONSUMER – TARGETING OPPORTUNITIES
Key points
Figure 54: Consumer clusters for ready meals and meal kits, March 2011
Healthy and Adventurous
Retired on a Budget
Authentics
Disengaged
APPENDIX – WHO’S INNOVATING?
Figure 55: New product launches in the prepared meals and meal centres market, by storage, 2008-10
Figure 56: New product launches in the prepared meals and meal kits market, by top ten companies, 2008-10
APPENDIX – MARKET SIZE AND FORECAST
Figure 57: Best- and worst-case forecasts for prepared meals and meal kits, 2010-15
APPENDIX – SEGMENT PERFORMANCE
Figure 58: Value sales and forecast for chilled and frozen ready meals, 2005-15
Figure 59: Value sales and forecast for chilled ready meals, 2005-15
Figure 60: Value sales and forecast for frozen ready meals, 2005-15
Figure 61: Value sales and forecast for ready-to-cook foods, 2005-15
Figure 62: Value sales and forecast for pies and pasties, 2005-15
APPENDIX – THE CONSUMER – USAGE
Figure 63: Types of prepared meals and meal kits eaten or bought in the last 12 months, by most popular agreement with statements on eating and cooking habits, March 2011
Figure 64: Types of prepared meals and meal kits eaten or bought in the last 12 months, by demographics, March 2011
Figure 65: Types of branded or own-label prepared meals and meal kits eaten or bought in the last 12 months, by demographics, March 2011
Figure 66: Types of branded or own-label prepared meals and meal kits eaten or bought in the last 12 months, by demographics, March 2011
Figure 67: Types of prepared meals and meal kits eaten or bought in the last 12 months, by demographics, March 2011
APPENDIX – GENERAL EATING/COOKING HABITS
Figure 68: Most popular agreement with statements on eating and cooking habits, by demographics, March 2011
Figure 69: Next most popular agreement with statements on eating and cooking habits, by demographics, March 2011
Figure 70: Types of prepared meals and meal kits eaten or bought in the last 12 months, by most popular agreement with statements on eating and cooking habits, March 2011
Figure 71: Types of prepared meals and meal kits eaten or bought in the last 12 months, by next most popular agreement with statements on eating and cooking habits, March 2011
APPENDIX – ATTITUDES TOWARDS READY MEALS AND MEAL KITS
Figure 72: Agreement with the statement ‘They are a cheaper alternative to a takeaway/eating out’, by demographics, March 2011
Figure 73: Agreement with the statement ‘They are a healthier alternative to a takeaway/eating out’, by demographics, March 2011
Figure 74: Agreement with the statement ‘They are not as authentic as a takeaway/eating out’, by demographics, March 2011
Figure 75: Agreement with the statement ‘They are unhealthy’, by demographics, March 2011
Figure 76: Agreement with the statement ‘They are fine when you’re pressed for time’, by demographics, March 2011
Figure 77: Agreement with the statement ‘They are good for sharing/when entertaining’, by demographics, March 2011
Figure 78: Agreement with the statement ‘The quality of ready meals has improved’, by demographics, March 2011
Figure 79: Agreement with the statement ‘They are a good option for solo dining’, by demographics, March 2011
Figure 80: Agreement with the statement ‘They are a good way to try a new cuisine’, by demographics, March 2011
Figure 81: Agreement with the statement ‘I prefer meal kits to ready meals as I feel more involved in the cooking process’, by demographics, March 2011
Figure 82: Agreement with the statement ‘Meal kits can be easily customised to my tastes’, by demographics, March 2011
APPENDIX – ATTITUDES TOWARDS READY-TO-COOK FOODS
Figure 83: Attitudes towards ready-to-cook foods, March 2011
Figure 84: Agreement with the statement ‘They are a healthier alternative to a ready meal’, by demographics, March 2011
Figure 85: Agreement with the statement ‘They are a cheaper alternative to a takeaway/eating out’, by demographics, March 2011
Figure 86: Agreement with the statement ‘They are more convenient than cooking from scratch’, by demographics, March 2011
Figure 87: Agreement with the statement ‘They are not as convenient as a ready meal’, by demographics, March 2011
Figure 88: Agreement with the statement ‘They are good when you are pressed for time’, by demographics, March 2011
Figure 89: Agreement with the statement ‘They are good for sharing/when entertaining’, by demographics, March 2011
Figure 90: Agreement with the statement ‘The quality of ready-to-cook meals has improved’, by demographics, March 2011
Figure 91: Agreement with the statement ‘They are of a better quality than a ready meal’, by demographics, March 2011
Figure 92: Agreement with the statement ‘They provide inspirational recipe ideas’, by demographics, March 2011
Figure 93: Agreement with the statement ‘Their packaging is easy to use’, by demographics, March 2011
APPENDIX – TARGETING OPPORTUNITIES
Figure 94: Target groups, by demographics, March 2011
Figure 95: Agreement with statements on eating and cooking habits, by target groups, March 2011
Figure 96: Types of prepared meals and meal kits eaten or bought in the last 12 months, by target groups, March 2011
Figure 97: Types of prepared meals and meal kits eaten or bought in the last 12 months, by target groups, March 2011
Figure 98: Types of branded or own-label prepared meals and meal kits eaten or bought in the last 12 months, by target groups, March 2011
Figure 99: Types of branded or own-label prepared meals and meal kits eaten or bought in the last 12 months, by target groups, March 2011
Figure 100: Attitudes towards chilled/frozen ready meals and meal kits, by target groups, March 2011
Figure 101: Attitudes towards ready-to-cook foods, by target groups, March 2011

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