Longer working hours, higher incomes and the demand for convenience and variety are among the key growth drivers for ready meals, according to a recent report from market analysts Euromonitor.
The ready meals sector is currently one of the most dynamic in the global packaged food market, registering value growth of nearly 4 per cent during 2002. While developed US, UK and Japan markets, which account for 66 per cent 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 over 5kg, comparable to that in Germany, and total market value in the region grew by 11 per cent during 2002.
In both developed and 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 to 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.
Northern Europe leads the way
Ready meals have become very popular among UK and Scandinavian households in particular, and consumption levels are higher there 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 per cent of UK households owned a microwave. The UK, Sweden and Denmark are also 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 for family households with children. Such households are generally more price sensitive, but just as time-pressured as smaller households, and are 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 per cent, 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 sales over 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, according to Euromonitor, 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, with expected growth of close to 18 per cent between 2002 and 2007.
For more details on Euromonitor's packaged food research, click here.