Understanding Opportunities in the Chilled Ready Meals Category in the UK
22nd February 2021
Klara Lynch, Insight Specialist UK, Bord Bia - The Irish Food Board
Bord Bia recently commissioned and completed a study on the Chilled Read Meal category in the UK, which explored the Category Dynamics, Shopper Behaviours, Trends, Futures and Innovation within the category. The methodology used included desk research, expert and industry engagement, as well as a survey that went to a nationally representative sample of ready meals buyers in the market. This Food Alert article will look at the current market situation, the trends that are emerging, and will conclude with some information on the potential futures and areas for opportunity.
Chilled Ready Meals in the UK
According to The Grocer, the UK’s Ready Meals category was worth approximately £3.9 billion in 2019, and with IRI/Mintel data forecasting continued value growth up until 2025, overall the category looked promising in early 2020. This expectation didn’t change at the onset of the Covid-19 crisis, with an initial spike in Chilled Ready Meals being seen by retailers. But, as time went on and the pandemic continued, the initial spike fell back to produce an estimated three point decline in retail sales value for 2020. There were a number of reasons for this decline, including an increase in scratch-cooking, a continuation of working from home, as well as increased consumer focus on making healthy choices. Although there was an estimated decline seen in 2020 retail sales value, it is expected that the Ready Meals and Ready-To-Cook category will return to its value growth once office work resumes and the Covid-19 crisis recedes. While category value is expected to grow, unfortunately the same is not expected for volumes, which could be a result of reduction in promotional activity and possible increases in average retail pricing. With the additional challenges that Brexit may bring, the Chilled Ready Meals category is one that is coming under pressure.
Although the market landscape must be considered, the overall penetration of Ready Meals in the UK market is high. According to Mintel, 88% of consumers eat ready meals regularly, and Kantar estimates that there is Chilled Ready Meals 91% shopper penetration in the UK (Bord Bia, 2020). When looking at the UK market, it is clear that the majority of options in the Chilled Ready Meals category are private label or own label, with branded options accounting for just 7% of retail value (Bord Bia, 2020). While Irish suppliers should consider potential opportunities in the branded space, the price competitiveness within the own label offerings and the further blurring of lines between private brands and supermarket brands, it could be difficult to achieve brand traction in this category (Bord Bia, 2020).
Bord Bia’s recent study also looks at the drivers and barriers to consumers engaging with Chilled Ready Meals. According to the study, ready meals consumers can feel guilty when they eat ready meals, and some consumers feel that ready meals can be too unhealthy to eat more than once a week (Bord Bia, 2020). Interestingly though, 86% of ready meals buyers believe Chilled Ready Meals have improved in recent times (Bord Bia, 2020).
The research looked at how Irish suppliers can unlock growth in the category, with four zones in particular being identified: Cleaning Up, Premiumisation, Plant Power and Closer to Scratch. The exploration of these four zones resulted in the identification of 11 potential Ready Meal futures, each of which was tested with consumers, and some examples of the futures were Keep It Simple, Helping Hand, Plant Power and Chef’s Club. Overall, the research showed which of the futures that the consumers believed in, as well as which they felt would be big and which they themselves were interested in, which highlighted potential opportunity areas for Irish suppliers to consider, when thinking about future planning.
Implications for Irish Suppliers:
Irish suppliers who want to unlock future growth opportunities in the UK chilled ready meals market should use this report as a tool for planning, innovation and possibly even range review. Click here to begin leveraging the report in full.
The Grocer, 2020. The break-up: ready meals category report 2020. Available from: https://www.thegrocer.co.uk/category-reports/the-break-up-ready-meals-category-report-2020/601160.article
Bord Bia, 2020. Exploring opportunities in the Chilled Ready Meal sector in the UK. Available from: https://www.bordbia.ie/globalassets/bordbia2020/industry/insights/new-publications/2020_chilledreadymealsuk.pdf