Ready to Eat Meals, A Revolution - Gerry Finley, Oscar Mayer UK

By Gerry Finley of Oscar Mayer, UK

theagenda

where are we now?the headlines

UK market review

the European focus

whats hot? retail trends

taking a slice - the opportunities for meat


where are we now?

Moving into

ready meals

Through to

meal solutions


The combined ready meals market

(chilled and frozen) was worth

£1.74bn in 2010 up 5.5% on 2009.

‘Dine in for…’ deals have been a

big driver the eat at home

restaurant experience.

Pressure from healthy eating

lobby for a reduction in fat and

salt levels.

headlines


Ready meal sector is forecast to

grow by 20.8% between 2011-2015

The majority of this will come from

the chilled sector as the frozen

sector continues to struggle

Initially 2012 will be a tough year and

the expectations of consumers to be

able to buy ready meals on

promotional offer is not sustainable.

NPD will continue to be driven by

supermarkets in chilled ready meals

as they adapt to increased

consumer sophistication.

headlines


the facts & figures

What can the

number tell us?


UK market review

Ready Meals Market Growth forecasted to reach £3.1 billion by 2015UK retail value sales of ready meals, and index of growth, 2005-15

Source: Mintel -Ready Chilled and Frozen Ready Meals May

2010

Mintel forecast Growth of 16% to £3.1 billion over the period from 2010 to 2015


UK market review

Total Chilled Ready Meals Full Price versus Promoted Contribution to Spend Growth

Source Kantar Worldpanel

Promoted sales are the key driver behind recent spend growth in ready meals

12

W/e

06

Sep

09

12

W/e

04

Oct

09

12

W/e

01

Nov

09

12

W/e

29

Nov

09

12

W/e

27

Dec

09

12

W/e

24

Jan

10

12

W/e

21

Feb

10

12

W/e

21

Mar

10

12

W/e

18

Apr

10

12

W/e

16

May

10

12

W/e

13

Jun

10

12

W/e

11

Jul

10

12

W/e

08

Aug

10

12

W/e

05

Sep

10

12

W/e

03

Oct

10

12

W/e

31

Oct

10

12

W/e

28

Nov

10

12

W/e

26

Dec

10

12

W/e

23

Jan

11

12

W/e

20

Feb

11

12

W/e

20

Mar

11

12

W/e

17

Apr

11

12

W/e

15

May

11

12

W/e

12

Jun

11

Co

ntr

ibu

tio

n t

o G

row

th £

Promoted Full Price


UK market review

10 Evening Meals – Ready Meals has the largest YOY increase

Source: Kantar Worldpanel:

In Home Evening Meals Consumption 12 m/e Feb 2011

1) Pasta1,384 million occasions

+4.7% Year on Year

2) Ready Meals1,060 million occasions

+5.6% Year on Year

3) Roast Dinners973 million occasions

-2.7% Year on Year

4) Sausages835 million occasions

+1.6% Year on Year

5) Pies / Pasties814 million occasions

+0.4% Year on Year

6) Pizza698 million occasions

+5.5% Year on Year

7) Sandwiches626 million occasions

-1.4% Year on Year

8) Curry617 million occasions

+2.7% Year on Year

9) Fish & Chips417 million occasions

-0.1% Year on Year

10) Jacket Potato406 million occasions

+5.2% Year on Year


UK market review

Chilled Ready Meals- Volume share % 52 w/e June 2011 & 2010


Beef and Chicken remain the largest two segment for Chilled Ready Meals

Vegetarian ready meals are suitable for vegetarians but will be eaten by all

35.1 32.9

24.624.4

7.46.9

4.64

7.26.6

8.510.4

12 14.1

0

10

20

30

40

50

60

70

80

90

100

13-Jun-10 12-Jun-11

VO

LU

ME

SH

AR

E %

Vegetarian

Pork

Other Poultry

Mixed

Lamb

Fish

Chicken

Beef

Kg 244,560 (000s) Kg 267,433 (000s)


UK market review

Smaller ready meal categories such as Mexican and Chinese are in strong YOY growth. Pasta ready meals has

shown strong growth since 2007, whilst Britpop has declined. Total Ready Meal/Prepared Dishes +2.1% growth vs year ago

Source Kantar: In Home/Lunchbox, 12 m/e Feb 2011 data – % growth vs year ago

+5.6% YOY

0

100

200

300

400

500

600

12 m/e

Nov

2007

12 m/e

Feb

2008

12 m/e

May

2008

12 m/e

Aug

2008

12 m/e

Nov

2008

12 m/e

Feb

2009

12 m/e

May

2009

12 m/e

Aug

2009

12 m/e

Nov

2009

12 m/e

Feb

2010

12 m/e

May

2010

12 m/e

Aug

2010

12 m/e

Nov

2010

12 m/e

Feb

2011

Total Roast (Ready) Meals Total Britpop (Inc Fish Pie) Total Indian Ready Meals

Total Pasta Ready Meals Total Chinese Ready Meals Total Mexican Ready Meals

Total Vegetarian Ready Meals

-5% YOY

+4% YOY

-7.2% YOY

+8.9% YOY

+15.6% YOY

+10.4% YOY



UK market review

31.7

33.3

15.2

7.3

1.5

2.5

2.1

1.8

1.4

1.3

0.5

0.8

0.7

32.5

32

13.9

7.3

2.3

2.1

2

2

1.6

1.4

1

0.9

0.8

Italian

English

Indian

Chinese

French

Greek

Mexican

Spanish

Thai

Oriental

Other International

Other European

American

52 w/e 13 Jun 10 52 w/e 12 Jun 11

Italian and English Ready Meals have the largest spend share

Chilled Ready Meals Sector Spend Share 2011 vs 2010


UK market review

52 w/e Switching Spend to/from Chilled Ready MealsSwitching Spend (£000s) to Chilled Ready Meals - year ending 12 Jun 2011


0 2000 4000 6000 8000 10000 12000 14000

Fresh & Frozen Meat

Wet/Smoked Fish

Chilled Main Meal Accomps

Frozen Fish

Fresh P/P Meat & Pastry

Burgers+Grills

Fresh & Frozen Poultry

Bacon

Frozen Pizzas

Sausages

Fresh Pizzas

All Others

Fresh Lse Meat & Pastry

Frozen Ready Meals

Fresh Processed Poultry

Net switching - Spend (£000s)

Chilled Ready Meals benefit from switching from Red Meat, Wet Smoked Fish, Main Meal accompaniments, and other proteins


UK market review

Ready Meals Shopper Profiles – Chilled / Frozen / Non Users

Source: Mintel -Ready Chilled and

Frozen Ready Meals May 2010

The usage of chilled ready meals

peaks among:

The usage of frozen ready

meals peaks among:Non Users

35-44-year-olds DEs Women

Full-time employed People not working (excl. retired) 16-24 year olds, 55+

Households earning £50,000 or overHouseholds earning less than

£15,500Full students and retired

Households with children aged 5-15Households with children, especially

aged 5-9AB and C2 Socio-economic groups

M&S and Waitrose grocery shoppers Asda & discounter grocery shoppers Two person households

Chilled ready meals peaks for employed 35-44 year olds and households with children aged 5-15.

Frozen meals peaks within DE’s grouping and households earning less than 15,500.


Source: Kantar In Home/Lunchbox, 12 m/e Nov 2010 data – % meal

occasions

32

40 4037

41

4542

44 44

53

35

3532

34

32

33

32 2830

32

34

2528 29 28

22

26 28 26

15

Ready Meals & Prepared

Dishes

Chilled Britpop (Inc Fish Pie) Chilled International Meals Fresh/Chill Indian Ready Meals Fresh/Chill Pasta Ready Meals Frozen Britpop (Inc Fish Pie) Frz International Ready Meals Frz Indian Ready Meals Frozen Pasta Ready Meals Total Roast (Ready) Meals

3+ peoplepresent

2 peoplepresent

1 personpresent

UK market review

Ready Meals by number of people present

There is not much variation between type of meal. Roast meals are more likely to be a one person present occasion.


UK market review

The category now meets a broader range of consumer need states

Component cooking £233m(+£12m / +5%)


Family meal deals £60m(+£5m / +9%)

Everyday value £1,125m(+£85m / +7%)

Restaurant replacement

& ‘Dining in’ £89m(+£26m / +40%)

Fresh and healthy £212m(+£30m / +16%)

the european

focus


• Around £1.9 billion was spent on the meals in the UK last year –double that of the French and six times more than in Spain.

• And while demand for ready-made meals across Europe rose by 29% between 1998 and 2002, in the UK it soared by 44%.

• Sales of ready meals in top 5 EU states was £4.7 billion last year. The UK accounted for 42% of all sales, France 21%, Germany 20%, Italy 9% and Spain 7%.

• Ethnic meals are the most prominent—Indian, Chinese and other Asian meals making up 40% of the chilled ready meal market across Europe.

• Whilst convenience is the platform for growth , consumers are looking for products that are natural, offer better quality of ingredients and are nutritious.


what’s hot?

the step changes are:

Ultra fresh

Deconstructed meals

Starters and sharing

Restaurant replacement/Super premium

Uniqueness

New channels

Restaurant branding


theoutlook


retail trends

eating out-driving innovation


Pizza Hut: Free unlimited salad with every

main course

Red Market: Late-night street food in East London

Carluccio’s: Italian picnic hampers

McDonald’s:Company pledges

new commitment

to nutritional

awareness

Consuming

with Ethics

Wagamama: Positive Eating + Positive Living

Leon: Food should

taste good &

do you good

eating out:Innovations & trends

McDonald’s:Calorie counts on in-store menus

http://www.amazon.co.uk/Leon-Book-Naturally-Fast-Food/dp/1840915560/ref=sr_1_2?ie=UTF8&s=books&qid=1283774968&sr=8-2


Cuisine Tesco M&S Sainsburys Asda Morrisons Waitrose Total

Premium 142 51 88 76 37 75 469

Indian 35 36 59 46 58 50 290

Ready to Cook 28 58 45 47 49 60 287

Healthy - Diet 57 59 54 46 34 24 274

Traditional 34 87 34 40 40 16 251

Oriental 29 35 42 46 31 37 223

Fresh & Tasty 40 44 49 46 14 25 218

Italian 32 48 36 36 23 20 198

Vegetable 26 31 18 15 14 20 124

Kids 27 17 23 13 7 10 97

Vegetarian 27 13 8 30 4 9 91

American 26 11 12 19 14 6 88

Value 12 18 14 11 55

Emerging Cuisines 35 2 40

Party 6 11 17

Small Portions 5 4 9

European 4 4

Other Asian 1

Grand Total 550 490 488 485 347 360 2736

Battle for consumersRanging and choice

npd innovation

Fair-trade ready meals first on sale in May 2011

Gluten free products

Ready Meal Kits

Kent’s Kitchenlaunched March 2011

Lakehouse Tablepremium chilled ready meals that bridge the

gap for convenience before compromise;

they sacrifice shelf life for superior flavour


npd innovation

Pastaboxby French manufacturer Sodebo

Eat In by the Coop in the UK

Charlie Bighamspremium ready meals

Giovanni Rana

Pasta Ready Mealswhere the pasta cooks in the

microwave instead of being reheated


Value of ready meals by type

measured in £m RSP as at November 2010. Type% change 2009 to 2010

English 366.3 11.6

Italian 354.3 10.2

Indian 163.5 4.5

Chinese 83.0 10.0

Greek 24.8 3.7

Mexican 23.1 6.4

Spanish 21.9 48.9

French 21.2 72.5

Thai 17.9 48.4

Oriental 15.0 22.8

where is the growth coming from

Source: Kantar World Panel

taking a slice

the opportunities

for meat

Quality and provenance

New and forgotten cuts

Developing health messages

Matching products

to flavour trends


High specification, quality

standards and innovation

supplied by weight, sold by

portion, who wins/loses

some examples

chicken breastdimension and residual

shin of beefweight, confirmation and butchery

lamb shankweight and uniformity

meat a quality focus



summaryChilled ready meals still offers

significant growth potential

Premium, health, and innovation

are key drivers

Diversity in restaurant trends

are fuelling competitive

retail responses

Lifestyle trends and demographic

change will underpin demand

Economic recovery will reverse

some of the eating in trends

Ready to Eat Meals, A Revolution - Gerry Finley, Oscar Mayer UK

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