The UK market for ready meals reached a total value of £1,058 million in 1996. This represents growth of just under 11 percent on the previous year, with this sector showing a faster rate of growth than the overall food market. Ready meals represent one of the most dynamic sectors in the food market, with a steadily increasing share of the total market since 1992. In 1996 the share taken of the total market was 2.1 percent compared to 1.9 percent in 1992. The only reason that this figure is not even higher is the fact that price cutting in the market has kept prices very competitive and hence restricted value growth to a certain extent.

Frozen ready meals still constitute the largest market sector, with sales worth £611 million in 1996. The frozen sector is the most mature ready meals market but has still shown strong growth of 32 percent since 1992, with retailers and manufacturers alike helping to sustain market growth through new product development and innovation. This renewed growth makes this the fastest growing sector whereas previously chilled meals experienced the most rapid growth. Frozen meals accounted for 57.7 percent of the total ready meals market in 1996, compared with 54.6 percent in 1992, with most of this growth at the expense of ambient ready meals.

Chilled ready meals represent the second fastest growing segment of the ready meals market with growth of 26 percent since 1992 to reach £342 million in 1996. This means that chilled ready meals now account for just under a third of the market by value. The only sector to show a decline in total sales and share of the market between 1992 and 1996 is the ambient ready meals sector, which accounted for 10 percent of the total market in 1996 with sales down by 5 percent to £106 million. This decline is due partly to the success of the other sectors and partly due to the failure of the wet ambient meals sector which did not fulfil its early promise.

Certain key factors continue to influence the ready meals market such as the intense price competition, that has kept prices low over the last five years; the continued rise of own label that has eroded the share of some of the branded players; the rise of niche brands particularly in specialist sectors such as ethnic or vegetarian foods; and the changes in consumer eating habits and lifestyles with a continued increase in snacking and grazing.

MAPS research shows that over the past twelve months, 85 percent of consumers have bought a ready meal, an increase from 62 percent since 1993, suggesting that manufacturers and retailers have been very successful in exploiting the third of consumers who had never bought a ready meal in 1993. In 1997 only 15 percent of respondents had never bought a ready meal. The types of ready meals showing the highest level of purchasing are all in the frozen or chilled sectors, with ambient meals much less popular amongst consumers in 1997. The most popular dishes in 1997 were chilled pasta based dishes bought by 46 percent of respondents, followed by frozen pasta based dishes and fishseafood based dishes (45 percent) and frozen chicken based dishes (42 percent). The least popular dish was the dry ambient ready meal sector with only 13 percent having bought in the last year.

In terms of the socio-demographics of purchasers, the single most important group is the youngest 15-24 age range who consistently show higher levels of purchasing for most types of ready meal. Chilled and most frozen ready meal sectors also show a slight upmarket ABC1 bias whilst ambient meal sectors show a more downmarket C2DE bias. The upmarket bias reflects the fact that many types of ready meal still command premium prices and if used regularly are a relatively expensive way of eating. The ABC1s are also more likely to own appliances such as deep freezers and microwave ovens, which tie in with higher consumption of ready meals. In most instances, households with children are more likely to buy ready meals than those without. However, single respondents are more likely to buy ready meals on average than those who are married or widoweddivorcedseparated. Those in full time work are also most likely to buy ready meals, reflecting the fact that they are therefore likely to have less time to spend preparing meals from scratch on a regular basis.

The leading players in the ready meals market vary by product sector, with few companies active across more than one product sector. In the frozen ready meals sector branding is more important, with Birds Eye Walls the overall market leader with a 19 percent share of the market, followed by Findus and Heinz Weight Watchers. In the chilled ready meals sector, branded products are the exception rather than the rule with Marks & Spencer still overall leader of the market with 45 percent of sales, despite increased competition from other grocery multiples in the last five years. The ambient ready meals sector, dominated as it is by the dry pot snacks sector, is therefore led by Golden Wonder with very few competitors in this market sector.

Retail distribution in the ready meals market continues to be dominated by the large grocery multiples such as J. Sainsbury and Tesco and by the major mixed retailers, like Marks & Spencer. The role of the grocery multiple is of most importance to the chilled ready meals sector, which the multiples totally dominate along with mixed retailer Marks & Spencer. The role of the multiples is also becoming increasingly influential in the frozen ready meals sector. Their importance is not as great in the ambient meal market, as the dominant sector is that of dried pot snacks, and this means that impulse buying is as important as planned purchasing. Consequently, the independent convenience retailer has a greater role to play in this market.

The ready meals market is becoming increasingly segmented and will continue to segment in the next five years as consumer tastes become more diverse and as manufacturers compete to create ever more exotic recipe dishes. This is likely to further restrict major above-the-line market promotions which are very costly and cannot be targeted closely enough at niche sectors of the market. This will lead to further growth in below-the-line and in-store activity to promote new lines and a continued emphasis by manufacturers on corporate generic advertising for a whole brand rather than individual product sectors.

Some of the factors that will influence the ready meals market over the next five years include health issues, which will help to shape consumer demand and tastes, and are particularly relevant given the ageing nature of the population. With continued media coverage given to issues such as fat and salt content in the diet, there is likely to be continued growth in low-fat, high fibre recipe dishes. With the BSE scare of 1996 causing many consumers to re-evaluate their eating habits, there is likely to be a steady long term decline in red meat-based recipe dishes to the benefit of fish, poultry and vegetable products, while ethnic and foreign based meals will continue to grow in importance. There is also growing concern about the methods of rearing and slaughtering of animals for human consumption and so there is likely to be a move towards more humane methods of animal husbandry over the next five years as well as greater use of organic methods of production. Whilst at present the use of free range or organically produced meat in ready meals is virtually non-existent the fact that demand for these types of product in the fresh meat sector is rising, may lead to the development of ready meals that are based on such ingredients. This would perhaps also allow manufacturers and retailers to re-establish premium pricing on such niche products.

The consumer of the late 1990s is much more value for money conscious than in the past and so the demand for products offering value for money in terms of portion size, quality of ingredients or recipe type will continue. Demand for larger portion sizes is likely to continue although this will not necessarily lead to pack prices increasing proportionately with pack size. Niche sector products will continue to be developed by the major manufacturers in order to maximise profits and ward off further own label incursions into their market share.

Between 1997 and 2001 the ready meals market is expected to grow by 21 percent to reach £1,404 million. Chilled meals will continue to show the fastest growth, rising by 25 percent to £495 million, whilst frozen meals are set to rise by 21 percent to £800 million. The ambient ready meals market, as the smallest but most mature sector, is likely to see the lowest level of growth, forecast at just 3 percent between 1997 and 2001 to £109 million.