Peter Duggan, Strategic Information Services, Bord Bia-Irish Food Board
Against a background of on-going subdued consumer sentiment within the UK economy, where approximately 41% of Irish food and drink was exported in 2011, some interesting consumer trends have emerged which should be of interest to food manufacturers who want to maintain or boost market position.
According to the TNS-Rim, the consumer confidence index for the UK shows no sign of recovering. Along with unemployment fears and increased fuels costs, these factors are helping to change the purchasing patterns of many UK consumers.
In response to this uncertainty, UK consumers are dining in more frequently, trading down from fresh to frozen, whilst spending less time preparing their meal than ever before. According to TNS, the amount of time spent preparing and cooking the main meal in 2012 is equivalent to 34 minutes. In contrast, it took an hour back in 1980. Taking this into consideration, most red meat meals are above this time allocation and would partly explain why beef sales in volume terms are struggling, particularly 1st quality roasting and stewing cuts. For the latest 12 week period ending the 18th March, first quality roasting joints and stewing cuts were back by 15% and 11% respectively in volume terms. It wasn't all bad news though for these cuts as some increase was evident for the secondary roasting and stewing cuts with sales increasing by 10% and 6% respectively.
The emphasis of down trading is illustrated by the level of switching that is occurring from roasting joints to mince over the last year which points to both a cost and time saving for the consumer. Needless to say, prices are key to enticing the consumer, with most of the main retailers focusing on pound price points in a bid to portray honesty and simplicity values (fresh meat 3 for £10). Other issues such as health and sustainability are serious issues, although these issues tend to take a back seat during the times of a recession.
It would appear that the prepared food market is not going away (now worth 48% compared to 45% in 2008) compared to the home cooked market (now worth 52% comared to 55% in 2008). This represents a significant opportunity for food manufacturers to incorporate new product innovation to take advantage of ever changing consumer needs, not just in the UK.