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ISBN: 1-84168-074-5

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Table of Contents

Executive Summary

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EXECUTIVE SUMMARY

In 1999, the ready meals market was valued at £1.22bn, a 6 percent increase on the 1998 sales total. The two core markets are frozen ready meals, valued at £598m in 1999, and chilled ready meals, with sales of £596m in 1999. After 2 years of poor sales in 1997 and 1998, the total ready meals market recovered in 1999, boosted by strong growth in the chilled ready meals sector. In 1999, sales of frozen ready meals increased by 4 percent in value terms, but in the chilled sector sales increased by a more impressive 8.2 percent.

Chilled premium ready meals have driven this sales increase. International meals, led by Indian, have shown strong growth, with consumers demanding more variety and more authentic dishes. Traditional British meals have also had their best year for some time, helped by the spread of premium products. Various brands compete for consumers’ attention in the ready meals market and no one brand dominates. In the frozen sector, Birds Eye is the leading brand and Heinz is also significant.

In both the frozen and chilled sectors, however, retailers’ own-brands take a significant market share. Own brands claim an estimated 42 percent of all frozen ready meal sales but their influence is much stronger in the chilled food cabinet, where they account for 62 percent of all sales. Marks and Spencer is the market leader in chilled ready meals, with 37 percent of all value sales, but both Tesco and Sainsbury’s have been increasing their market share in recent months.

Consumer research commissioned by Key Note in March 2000 emphasises the influence of retailers’ brands and that no brand dominates. The most popular brand is Birds Eye (mentioned by 36 percent of respondents), followed by Tesco (mentioned by 29 percent). Marks and Spencer is third at 25 percent and four other retailers — Sainsbury’s, Iceland, Asda, and Safeway — are mentioned by over 20 percent of respondents. Consumer demand for convenience foods, increases in the number of working women and single-person households, and the increased penetration of microwaves and freezers have all been factors encouraging the purchase of ready meals in recent years. The suppliers have also begun to transform the market by introducing more premium products and improving the quality of the product.

A growing interest in international foods, together with the demand for more restaurant-quality meals, has also encouraged more new product development. Market growth is expected to continue in the next few years, driven by further development of the premium chilled sector. Sales in 2000 are forecast to increase by 6.6 percent to £1.3bn, and by 2004 the market is forecast to reach £1.5bn.

Text © 2000 Key Note

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Last updated by Paul Tucker 3rd June 2000