On-the-go pots enjoy rising demand, but frozen and online groceries suffer as shopper habits return to normal
From firm favourites such as instant noodle pots to quinoa salads, the freeze dry specialist is seeing a rising demand for ingredients used in on-the-go meal pots, with enquiries up 30% since offices started to reopen in spring.
Across Europe, workers are returning to offices with more consistency, with UK government data showing 60% of workers are now back in their regular workplace. The return of office workers has also led to an increase in city centre footfall and a fresh demand for ready to eat on-the-go food, according to European Freeze Dry.
Diana Morris, Country Manager UK for European Freeze Dry, said: “The combination of convenience and nutritional value make the on-the-go pots a firm favourite. We pack in all the goodness and nutrition of our ingredients through our process and that makes for a healthy snack.
“After almost 18 months of remote working, employees returning to the office are finding it easier again to pick up on-the-go meals for a quick lunch so they can enjoy a nutritious, tasty meal that is ready to eat in minutes.
“Retailers will also be looking at new ways to make food-to-go affordable through new promotions and capitalising on the popularity of the grab and go meal deal. Similarly, people’s diets and requirements have changed and we are constantly working with suppliers to produce nutrition heavy meals packed with additional protein or containing new plant-based ingredients and formulations.”
Frozen ‘will remain on an upward trajectory’ despite sharp fall
Frozen sales will also remain strong as hospitality re-opens, according to the British Frozen Food Federation (BFFF). That’s despite the sector witnessing a sharper yearly decline in sales than other grocery categories in the UK as shopper habits return to normal.
Kantar data show that in the 12 weeks to 13 June, frozen sales fell 5.7% in value and 7.1% in volume, while fresh and chilled saw 1.2% value decline and a 5.1% dip in volume.
Frozen also dropped faster than total grocery, which fell 3.2% in value and 2% in volume. That said, Kantar figures for the 52-week period ending 13 June reveal frozen food sales have outperformed total grocery growth in both value (+7.8%) and volume (+5.2%). The overall grocery market in the same period has been +6.9% value and +4.8% in volume. Frozen is outperforming fresh and chilled on value growth 7.8% vs 7.3%. However, volume growth is behind at 5.2% vs 6.9%.
Although the value growth of the frozen market is slowing down as consumers return to more normal shopping patterns, Richard Harrow, chief executive of the BFFF believes frozen will remain on an upward trajectory.
He said: “Frozen food has, in the last 12 months, become the fastest growing sector in retail, after alcohol. Of course, much of this growth has been the result of the pandemic, which after the shutters came down on out-of-home, saw the return of the big weekly shop, from which frozen directly benefited.
“However, the market remains nearly £1bn higher than the 52 weeks to June 2019, with an additional 241 tonnes of volume. Further insights from the latest Kantar figures also suggest that frozen will continue to be a winner. All nine of the categories are showing growth in both value and volume, with three categories - ice cream, fish and savoury - showing double digit growth.”
The BFFF is also encouraged by the buying habits of younger consumers, with under 25s 23% more likely to eat frozen dinners, according to the data. Harrow added: “As well as convenience being of utmost importance, Gen Z consumers place a higher value on flavour and quality of ingredients, as opposed to seeking out brands. Having grown up with smartphones, they are connected and informed. This is a generation looking to make responsible choices about people and the planet.
“Frozen has always been recognised as a great value option, but value is now combined with innovation as companies work to develop high-quality frozen free-from products, sustainable packaging solutions and plant-based meals. We know people across all demographics are increasingly seeking out healthy and sustainable products, so options on offer in the frozen aisle will continue to attract new consumers.”
Online’s rapid rise is also starting to taper
Total grocery sales fell by 5.1% over the 12 weeks to 11 July 2021, according to Kantar, but shoppers still spent £3 billion more on groceries compared with the same period in 2019. Retailers will also be benefiting from sales of goods consumed on-the-go, which are not captured in these numbers, Kantar added.
Year-on-year online grocery sales declined for the first time ever – by 2.6% -- as the nation returned to physical stores, workplaces, and restaurants over the past month. With online’s rapid rise starting to taper, Ocado’s growth has also slowed over the past 12 weeks to 3.0%, though it remained the fastest growing retailer and increased its market share by 0.1 percentage points to 1.8%. All of Britain’s big four grocers - market leader Tesco, Sainsbury’s, Asda and Morrisons, recorded sales decline versus last year.
Fraser McKevitt, head of retail and consumer insight at Kantar, said: “The number of people choosing to buy groceries online fell by 81,000 in July compared with the same four weeks last year. As the nation returned to shops, workplaces and restaurants over the past month, digital baskets shrunk by 8% to an average of £80 per shop, the lowest since February 2020. As a result, year-on-year sales growth for online groceries has dropped for the first time ever – falling by 2.6%. The channel currently accounts for 13.3% of the total market.”