Britain is set to remain the biggest European market for ready meals, accounting for more than half the total market by 2007, when it will be worth over £5 billion, according to a new report from market analysts Datamonitor.
The report, Consumer Trends in Prepared Meals, shows that the UK is already by far the biggest market in Europe for ready meals, accounting for 49 per cent of all sales. Second-placed France has a mere 20 per cent, followed by Germany with 14 per cent.
Datamonitor said that despite growing consumer concerns relating to health problems, such as the high salt content of many ready meals, growth in the market shows no sign of abating. With Britons working some of the longest hours in Europe, and with increasing disposable incomes allowing them to spend more on leisure time in compensation, ready meals play an important role in catering to cash rich, time poor consumers.
"Consumers are increasingly turning to prepared meals to compensate for a shrinking amount of time available to prepare and eat meals. Simultaneously, their requirements and expectations are growing more sophisticated. Manufacturers, therefore, must ensure that their offering is not only convenient, but also fulfils consumers' evolving requirements," said Lawrence Gould, consumer markets analyst at Datamonitor and author of the report.
Among these requirements is the desire for ever-healthier ready meals. The UK government has issued repeated warnings about the potentially dangerous levels of salt in some ready meals, and while consumers for now remain content to eat ready meals because of their convenience, this may not hold true for much longer if the nation as a whole descends rapidly into ill health.
According to UK government figures, on average, three quarters of consumers' salt intake come from processed foods, in particular ready meals. A high salt intake can lead to serious health problems, particularly heart disease, one of Europe's most important killers. Indeed, the UK government announced this week that it may enact legislation to label certain food products as being 'high in salt' if manufacturers do not reduce their salt content.
But for the time being, consumers are happy to take the risk, it seems - and not just in the UK - the European market for prepared meals was worth more than £8 billion last year, and is set to grow by over 20 per cent in the next five years to £16 billion.
Despite having just a 4 per cent share of the overall market for prepared meals, Sweden has one of the highest per capita expenditures, reflecting the high cost of such products in that country. In fact, Swedish expenditure of £47 per head is second only to Britain (£69) , and both countries are likely to show some of the fastest rates of growth too over the next five years - over 4 per cent, according to Datamonitor.
But in absolute terms, Britain is still far more important than Sweden, with sales of £4 billion last year compared to just £358 million in the Scandinavian country. The French market, where ready meals are still a relatively new phenomenon but where many major companies are becoming increasingly active, is worth some £1.6 billion, while German sales are put at £1.1 billion.
Italy is also ahead of Sweden with a market share of 6 per cent and a total market value of £463 million - despite having the lowest per capita consumption at just £8. Spain is just ahead of Sweden too, with sales of £361 million, giving it a 4 per cent share overall, but it too has low per capita expenditure - just £13. The Netherlands is the smallest market for ready meals in Europe assessed by Datamonitor, with sales of just £262 million last year. Per capita expenditure there was £17, however.
The far greater popularity of prepared meals in the UK than in any other European country is due to several factors, the report said. First, there is a cultural aspect -prepared meals are far less popular in countries with a strong gastronomic tradition such as Italy or France. Secondly, working hours are longer in the UK than they generally are in the rest of Europe, as are commuting times, creating additional levels of time pressure and a heightened need for convenience foods.
But a speedy meal solution at the end of a long working day is now not enough for most British consumers - they also want real quality.
"There is an overarching tendency for consumers to search for better quality prepared meals, in a wider variety. Simple convenience is no longer enough to satisfy their requirements. In order to encourage the market for prepared meals to grow and to increase their market share, suppliers will have to diversify their offering, as well as increase its quality," Gould said.