This report examines the market for chilled and frozen desserts which are estimated to be worth £1,005 million and £1,126 million respectively in 1996.

The main drivers behind these markets are consumer demand for convenience food products which are also indulgent and hence an everyday 'treat', allied to a growth in consumer expenditure on food both during and since the recession. Changing lifestyles, which allow less time for preparing food, and a decrease in the traditional family meal as a result of increasingly busy lifestyles, contribute towards this demand. Ownership of domestic fridges and freezers is also a key factor, and microwave ovens have added to the perceived convenience of frozen foods.

The influence of the major supermarket multiples on the market is considerable as they account for some 70 percent of household expenditure on food and an even higher proportion of expenditure on convenience food products. Over 40 percent of sales of chilled and frozen desserts are retailers own label products, which provides considerable competition for manufacturers brands, particularly at the economy and standard end of the market.

Key trends within the markets include massive growth of the luxury and premium product sectors with the introduction of new products by both manufacturers and retailers. Premium pricing of these products has driven value market growth way ahead of volume growth. In certain markets, notably yoghurts, volume growth is almost static, although premium pricing of split pots and luxury (whole milk) yoghurts has driven the market forward by 10-12 percent per annum.

At the other end of the market, the 'health' desserts such as low-fat cheesecakes and bio yoghurts have ensured that desserts can be purchased by those on a diet, and those who are looking for positive health benefits from food. However, taste and texture remains a very important aspect of the health desserts market as consumers will not purchase products which have a taste penalty.

Individual portions are well established in the chilled desserts market and multi-packs are major sellers. In the frozen desserts segment this is a relatively new concept, but one which has been very successful to date. Combination and complete desserts are also becoming popular.

The largest market segment in the frozen and chilled desserts market is for take home ice cream, which is worth some £666 million in 1995. Yoghurts are the major sellers in the chilled desserts market, worth £591 million in 1995. Both of these sectors have shown rapid value growth since 1991, driven by premium and luxury products. The only other sizeable segment is for frozen gateaux and cakes worth £190 million in 1995. Smaller segments include frozen cheesecakes, hot puddings, tarts, pies and flans, and mousses. In the chilled sector, fromage frais and other desserts including dairy products make up the remainder of the sector.

The ice cream market has grown strongly, driven by an increase in the availability and purchasing of luxury products, and by shifts in consumer perception and purchasing which has moved ice cream away from a children's confectionery and impulse summertime purchase, to an adult year-round product. Other products which have increased sales in the wake of the ice cream market include sorbets, frozen yoghurts and iced mousses.

Frozen gateaux and cakes include products such as chocolate gateaux and tortes, and as they tend to be cream based, freezing increases the shelf life. The market has benefited from the decline in home baking and the introduction of new products.

Other frozen desserts include cheesecakes, pies, tarts and flans, mousses and bakery products and puddings which are served hot. These markets have grown rather more slowly, but are still well ahead of inflation, fuelled by consumer demand and product innovation.

The yoghurt market has a relatively high proportion of own label product sales, at 46 percent of the total market, with consumption almost static, but aggressive marketing and vigorous innovation by the leading brands, in particular Müller, has combined with a general trading up to premium products to produce a dynamic market. The children's sector is especially important and is one which manufacturers are attempting to drive forward with new 'fun' products, character merchandising and free in-pack toys. Children account for around half of the consumption of fromage frais in the UK.

The market for other chilled desserts is dominated by mousses, with the entrance of confectionery brands such as Cadbury's a major force in the market.

To establish consumer purchasing within these markets, MAPS commissioned exclusive research through the National Opinion Poll (NOP). The results are fully analysed in this report by the main socio-demographic groups. Purchasing of products reflects the size of the market segments with ice cream, fruit yoghurt and low-fat yoghurt, gateaux and cakes being the major items purchased. Women are more likely to purchase chilled and frozen desserts than men, and the presence of children in the household considerably increases the chances of desserts being purchased. Frozen and chilled desserts are more popular among younger age groups, up to 44 years old, these being the main family building age groups, who are also likely to have busy lifestyles and do not have the time, or in some cases the skill, to produce home made desserts. Purchase of many of the desserts have a down market profile being biased towards C2s.

Major companies in the frozen desserts market include Sara Lee, McVities, Bird's Eye Walls and in the chilled desserts market, Müller , St Ivel, Nestlé and Eden Vale. All are international companies, with a range of other business interests. Sara Lee is part of a diversified group, based in the US with concerns in food, personal care products, household goods and clothing. The majority of the company turnover is in the USA.

Bird's Eye Walls has interests in frozen foods across all sectors, while McVities is part of the United Biscuits group which includes McVities parent company, Ross Young's, again a company with a wide range of frozen foods and other food products.

Müller, St Ivel and Eden Vale are primarily dairy based concerns. Müller is a private German company, which only entered the UK market 10 years ago but has been very successful, primarily in the yoghurts market. St Ivel is part of Unigate, and manufactures the Shape brand of dairy products. Eden Vale is part of Northern Foods, the main brands being Ski and Munch Bunch, and are also the major suppliers of own label products.

There are also a number of medium and small companies which supply both speciality brands and retailers own label lines.

Distribution of chilled and frozen desserts is primarily through the major multiples, with freezer centres accounting for a proportion of frozen dessert purchases and independentsconvenience stores having a small share of snack products such as yoghurts.

Future prospects for the frozen and chilled desserts market are good, although MAPS expects growth to slow as the market is reaching saturation in volume terms and total consumption is unlikely to rise much higher. Most of the market growth will therefore come from product switching and trading up to premium brands. MAPS estimates total market growth therefore to be in the range of 14-15 percent between 1996 and 2001.