Growth opportunities continue for prepared meals category
July 28, 2016
by Monica Watrous
Prepared food brands perceived as fresher and healthier with more flavor variety have preserved.
CHICAGO – Sales of prepared meals have become stagnant as a result of changing consumer perceptions and behaviors, said John Owen, senior food and drink analyst for Mintel, Chicago. The key to unlocking growth in the category may lie in the success of meal kit delivery, which has burgeoned into a $1.5 billion market over the past several years.
|John Owen, senior food and drink analyst for Mintel
“This phenomenon is appealing to the same trends that prepared meals need to answer to,” Owen said during a presentation at the Institute of Food Technologists’ annual meeting and food exposition held July 16-19 in Chicago.
Twenty-one percent of adults and 40 percent of millennials said they have tried meal kit delivery services, driven by the need for convenience, an interest in exploring cuisines and eating fresh, and a lack of expertise in cooking, Owen said.
Meanwhile, nearly half of consumers surveyed by Mintel who eat frozen or refrigerated meals or side dishes said these options are quicker than preparing food from scratch and are handy when they don’t want to cook. A third said they like the taste of prepared meals, and a quarter of consumers said the category offers a wide variety of cuisine options.
Meal kit delivery has burgeoned into a $1.5 billion market over the past several years.
One of the biggest hurdles manufacturers of prepared meals must overcome is consumer perception of products as “too processed,” Owen said.
“More than a third of consumers say all natural ingredients would convince them to purchase prepared meals more often,” Owen said. “Two-thirds say they would eat more prepared meals if they were less processed.”
Consumers are more likely to buy prepared meals with a “no additives or preservatives” claim on the package, he said.
Amy's Kitchen, Evol, Luvo, P.F. Chang's and Innovasion all posted double-digit grown last year.
While sales of such stalwarts as Lean Cuisine, Healthy Choice and Banquet have plummeted in the past five years, brands perceived as fresher and healthier with more flavor variety have persevered. Amy’s Kitchen, Evol, Luvo, P.F. Chang’s and Innovasion all posted double-digit growth last year.
To succeed going forward, manufacturers of prepared meals must continue to align with changing attitudes about food while looking for opportunities to create an advantage in the marketplace, Owen said.
As the line between meals and snacks continues to blur, products positioned as a snack or side dish may capture new usage occasions. An example from Nestle USA is Stouffer’s Cups, which are single-serve portions of lasagna or macaroni and cheese varieties packaged in handheld cups. Evol, a business unit of Pinnacle Foods, offers a similar line of products.
Products positioned as a snack or side dish may capture new usage occasions.
“Brands like Stouffer’s and Evol are using package and portion size to move prepared meals farther down that line to the middle ground of meal and snack,” Owen said.
Another example is Devour, a new line of frozen entrees from the Kraft Heinz Co., that is “not based on meals but on cravings,” Owen said. Featuring such varieties as chicken and waffles, white cheddar macaroni and cheese with bacon, and Angus beef and corn bread, Devour offers a twist on traditional comfort food and rates favorably among millennial men surveyed by Mintel.
Devour meals offer a twist on traditional comfort food.
Products that address specific health and lifestyle needs or enable customization may also deliver a much-needed boost to the category, Owen said.
“We think there is room on the spectrum from completely prepared meals to cooking from scratch for prepared meals to move in the direction of cooking and creativity, whether it’s mixing and matching or creating your own meals with components to have that same kind of ownership,” Owen said.