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Microwavable Foods - Quantitative Techniques & Analytics, 2016 Global Strategic Business Report
Busy lifestyles and hectic work schedules are leaving little time for the preparation of elaborate meals. A growing number of consumers are therefore turning to ready-to-eat or ready-to-cook food products. While the trend has been in existence for several years, the introduction of microwave ovens has helped take the convenience trend to its limits, by reducing cooking and heating time to mere minutes. Microwavable packaged foods such as snacks and meals gained in popularity for their ability to expedite cooking time. Today, microwave ovens are a standard kitchen appliance in developed markets, while developing markets are witnessing a surge in ownership rates. As the number of women joining the workforce continues to rise, more women are likely to turn to microwavable foods as a method to save time and provide quick and simple meals for their families. Rising income levels, urbanization, changing consumer lifestyles, and spurt in nuclear families have emerged as major factors supporting growth in the market.
The evolving consumer palette is driving manufacturers to innovate new and unique microwavable food varieties in bold and exotic flavors. Food manufacturers are increasingly positioning precooked meals/entrees as being "homemade", given the growing preference for traditional homemade food. Shrinking family sizes driven by the rise in the number of double income no kids (DINK) households, as well as an increase in the number of singles are leading to the popularity of single-serve microwavable food packs. With a growing number of children assembling their own meals, there is a strong demand for do-it-yourself microwavable meal kits. Frozen foods continue to enjoy significant demand owing to a host of advantages such as convenience, and perceptions of quality, freshness and taste among others. The trend has percolated into the frozen microwavable foods market as well, with consumers preferring frozen microwavable dinners and meals. Technological advancements in microwaveable packaging are enabling the launch of a wide range of organic and ethnic frozen foods. Concerns over the use of preservatives are driving demand for shelf-stable microwavable foods and preservative free frozen diets.
As stated by the new market research report on Microwavable Foods, the United States represents the largest market worldwide, supported by the established culture of snacking, easy meal preparation, and processed food consumption. Emerging markets specifically BRIC (Brazil, Russia, India, and China) are expected to fuel growth in the coming years. The Middle East, Latin America, and Asia-Pacific offer significant potential for growth led by factors such as rising disposable incomes, booming supermarkets and hypermarkets sector, rapid urbanization, and Westernization of food and cooking habits. Asia-Pacific ranks as the fastest growing market with a CAGR of 9.5% over the analysis period.
Major players covered in the report include Ajinomoto Windsor, Inc., Bellisio Foods, Inc., Campbell Soup Company, ConAgra Foods, Inc., General Mills, Inc., Gunnar Dafgård AB, Hormel Foods Corp., Kellogg Company, McCain Foods Limited, Nestle SA, Pinnacle Foods Inc., The Kraft Heinz Company and The Schwan Food Company among others.
The latest grocery market share figures from Kantar Worldpanel for the 12 weeks ending 29 January 2017, show Aldi is now Britain’s fifth largest supermarket.
With sales up 12.4% year on year, the retailer increased its market share by 0.6 percentage points to clinch fifth place for the first time.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “Just a decade ago Aldi was the UK’s tenth largest food retailer, accounting for less than 2% of the grocery market. Since then the grocer has grown rapidly, climbing the rankings by an impressive five places to hold a 6.2% market share. Underpinned by an extensive programme of store openings, the past quarter has seen Aldi attract 826,000 more shoppers than during the same period last year.
“Despite being overtaken by Aldi, Co-op’s 2% sales increase was well ahead of the market, continuing a run of growth stretching back to July 2015. A significant own label sales increase of 7% was behind the strong performance, with healthier ranges successfully catering to consumers’ good intentions for the new year.
“Not all shoppers were convinced by the health message though: while overall sales of healthy own label lines increased by 3%, a dry January was certainly not on the cards for many of us – sales of beer increased by 4% over the past 12 weeks, with wine up by 1% over the same period.”
The market continues to grow faster than it did in 2016, with supermarket sales up 1.7% on last year: eight of the nine major retailers saw positive sales growth during the past 12 weeks. Although not significant enough to dampen the market, well-publicised supply issues over the past few weeks have affected sales in fresh produce. Fraser McKevitt comments: “11 million households buy courgettes annually, but supply issues contributed to 759,000 fewer shoppers buying them this January – that’s a 31% drop in spending compared with the same month last year. Sales of spinach also fell by 12%, in a clear sign that the poor weather in southern Europe has had a tangible impact on British shopping baskets.”
“Meanwhile rising prices – which we saw at Christmas for the first time since 2014 – have continued into the new year, with like-for-like inflation on a basket of everyday groceries climbing to 0.7%. If prices continue to rise at the same rate for the rest of 2017, shoppers will find themselves around £27 worse off.”
Morrisons was the fastest-growing retailer within the big four, increasing its market share for the first time since June 2015 with a sales uplift of 1.9% year on year. Although growth came from across the store, premium own label was a real bright spot – sales were up by 35%, while its revamped The Best range made its way into 14% of Morrisons baskets.
Growing for the fifth period in a row – albeit at a slower rate than previously – Tesco’s sales were up 0.3% year on year as its market share fell to 28.1%. Sainsbury’s sales remained flat, while its share fell by 0.3 percentage points to stand at 16.5%.
Meanwhile Asda’s 1.9% fall in sales signalled a decline which continues to slow. Although its share dropped by 0.6 percentage points over the quarter, the retailer did manage to increase the number of shoppers visiting its stores compared to the same period last year.
Elsewhere, Waitrose, Lidl and Iceland all continued to grow. Boosting sales by 3.4%, Waitrose increased its share of the grocery market to 5.3%, while Iceland – up 8.6% year on year – saw sales growth for the tenth consecutive period. A 9.4% year on year sales increase for Lidl buoyed the retailer’s market share by 0.3 percentage points, leaving the discounter holding 4.5% of the UK grocery market.
Checkouts Ring Up A Record Christmas As Grocery Market Waves Goodbye To Deflation
The latest grocery market share figures from Kantar Worldpanel, for the 12 weeks ending 1 January 2017, show the fastest recorded growth since June 2014, thanks to an additional consumer spend of almost half a billion pounds increasing total supermarket sales by 1.8%.
Fraser McKevitt, head of retail and consumer insight at Kantar Worldpanel, explains: “Year-on-year market growth has been helped by comparisons to a weaker Christmas in 2015, but sales were also buoyed by strong consumer appetite for festive celebration after a turbulent year. Shoppers spent £480 million more at the tills than in 2015, leading to record sales for the Christmas period.
“With Christmas Eve falling on a Saturday and giving shoppers more time to buy their final festive trimmings, the single busiest shopping day of the year was Friday 23 December with over half the population braving a grocery store. The typical household spend for December reached £365 this year – £52 more than the average month.
“Thanks to continued investment in premium own label brands across the major retailers in 2016, such products finished the year with record 12 week sales of almost one billion pounds. Top tier lines including own label fresh and smoked fish, cooked meats such as ham, and wine performed particularly well.”
After 28 months of deflation in the market, like-for-like grocery prices have increased by 0.2 percentage points to bring a return to inflation.
Fraser McKevitt comments: “The long-anticipated return to inflation suggests that the speed of growth in the overall market will continue to hasten in 2017, and both consumers and retailers will be looking at ways to avoid increasing the cost of the weekly shop. Last year retailers focused on simplifying their discounts and offers, and the level of promotional sales has fallen to 37% as a result – the lowest level over Christmas since 2009.”
Overall market growth and two additional shopping days the week before Christmas have left room for most retailers to find some success over the festive period. The big four supermarkets together accounted for 71.4% of market share, with a sales increase of 0.1% – the first time that all four have collectively grown since June 2014.
Fraser McKevitt says: “Tesco’s recent sales revival continued with an increase of 1.3% particularly helped by its performance within fresh food. However, this wasn’t enough to stop its market share from falling back by 0.1 percentage points to 28.2%.
“Morrisons, whose overall sales were held back in 2016 by the impact of a number of store closures, marked a strong start to the year with growth of 1.2% – its first period of growth since June 2015.”
“The discounters tend to take a slightly smaller share of the market in December than the rest of the year as consumers revert to traditional retailers for the holiday season. This year sales growth for both Aldi and Lidl accelerated compared to pre-Christmas levels as shoppers continued to warm to their premium lines. Year-on-year, Aldi grew sales by 11.8% and market share to 6.0%, while Lidl’s sales growth of 7.5% increased its share by 0.2 percentage points to 4.4%.”
Also increasing sales after a successful end to 2016 were Iceland, where sales grew by 9.6%, Waitrose (3.0%) and Co-op (2.4%).
Sainsbury’s saw a marginal sales decline of 0.1%, though it did deliver strong online sales growth having attracted new shoppers to the channel. While Asda was down by 2.4%, this is a considerable improvement on the 4.7% decline reported in December.