What do Charlie Bigham’s, La Famiglia Rana and Itsu have in common? They’ve all capitalised on the demand for premium, convenient world cuisine in the wake of covid.
The first is up by a staggering £21.8m, while the second has made nearly £5m in its first full year, and the final has grown value sales of its frozen lines by more than a third [NielsenIQ 52 w/e 11 September 2022].
The trio are the vanguard of brands propping up the chilled ready meals category. Over the past year, branded volumes have grown almost a fifth, with value up 24.4% to £234m [Kantar 52 w/e 4 September 2022].
“This growth has been driven predominantly by new shoppers, which has contributed £22.6m,” points out Kantar analyst Oliver Akiwumi.
By contrast, the larger own label ready meals sector has lost shoppers in the past 12 months, resulting in a 5.3% slump in volumes.
It suggests brands are better at catering to the quest to find a speedy hit of world cuisine that’s worth splashing the cash.
In theory, chilled ready meals should be in the perfect place to offer exotic tastes in the wake of the pandemic.
After all, sales of cooking sauces have declined 4.3% to £724.2m – with volumes down 10.1% – as normal life has resumed and shoppers have been less willing to spend time cooking [Kantar].
“People have returned to their busy schedules, and the need is for quicker and more convenient meal options,” says Akiwumi.
Yet volumes are down by 3.3% across the chilled ready meals category. While value is up 6.3% to £1.83bn, that’s entirely due to an average price rise of 10.2%.
Part of this is the result of rising inflation across grocery. More interestingly, though, it’s also been driven by shoppers buying more premium, branded propositions.
Branded ready meals come at an average of £3.78 – 29% more expensive than own label versions, which are £2.94. And many of the fastest-growing brands are even pricier.
“There’s a shift towards British people being willing to try different world products”
A Charlie Bigham’s lasagne for one, for example, costs £6 in Tesco. Rana’s meal kits are £4 in Sainsbury’s. And Itsu’s frozen Chicken Gyoza SKU similarly comes at £4.
The latter illustrates an important point. Because Itsu’s meals may be pricier than some other fare in supermarkets, but they’re still more affordable than much of what’s on offer in its high street outlets.
So, for many shoppers, premium ready meals at the supermarkets represent a cheaper alternative to eating out.
Itsu says it is “tapping into the huge opportunity to drive more Asian-inspired meal occasions at home”, citing research that found 70% of its shoppers consider themselves to be foodies.
- At a first glance, it looks as though Britain’s tastes have become less exotic. Classic Italian ready meals have seen the largest absolute growth in the category, up by a substantial £69.5m.
- But take a look at relative growth, and the picture changes. Cuisines such as Thai and Far Eastern have seen the fastest rises in these terms. And ‘other international’ – comprising more niche cuisines – grew by 40.4% to £7.4m.
- “Eating habits formed during lockdown, where shoppers broadened their horizons and enjoyed more diverse cuisines, have continued,” says Kantar analyst Oliver Akiwumi.
- The growth in volumes of these cuisines is particularly significant, given there was a 3.3% volume decline in the wider chilled ready meals market. The 6.3% rise in value to £1.84bn was entirely down to price rises of 10.2% or 28p per pack.
- Notably, much of the decline has come from own label, which saw volumes fall by 5.3%.
- Contrastingly, brands are up by 24.4% in value and 18.8% in volume.
- “Branded growth has been driven predominantly by new shoppers, which has contributed £22.6m,” says Akiwumi.
Mr Organic sees a clear opportunity in this space. “Due to the rising cost of living, consumers are trading down from restaurants to premium grocery options,” says brand manager Maddie Grinham. As a result, “many brands are positioning themselves towards offering elevated products that mimic restaurant quality”, she explains.
That’s true of Lee Kum Kee, which hammers home quality as a point of difference in its range of Asian sauces, condiments and ingredients. “Many cooking sauces are watered down and therefore do not provide the same taste profile as a restaurant,” says European MD Maria Chong.
“By providing more authentic products, a consumer can more easily replicate restaurant-quality food at home.”
For Chong, there is clear demand for this quality fare. “As consumers move from eating out to eating in, brands are finding new ways to show them exactly how to cook cost-efficient meals with quality food products they love,” she adds.
Indeed, research conducted on behalf of Lee Kum Kee highlights the enduring demand for high-end products despite pressure on household finances. According to the survey, 18% of families are still spending £16-£20 on family ready meals [Opinion Matters September 2022].
Italian to Thai
That spend is going on a wide range of cuisines. Italian, for one, is proving a continually popular choice, as evidenced by ready meal sales. It’s seen the largest absolute growth of all ready meal cuisines, up £69.5m to total £643m (see left).
Such growth will very likely have spurred Italian brand Napolina’s forthcoming debut in the chilled pasta category in April 2023, as it looks to reverse its 15.5% fall in dry pasta value sales [NielsenIQ 52 w/e 27 September 2022].
The premium chilled option will allow “customers to have even more flexibility and versatility when it comes to cooking with Napolina products”, explains brand marketing director Jeremy Gibson. “Innovation is enabling Napolina to deliver new product development that meets evolving consumer interests and trends.”
In relative terms, two cuisine styles are growing even faster than Italian – albeit from smaller bases. Thai ready meals are up 22.5% to £48m and Far Eastern grew 24.4% to £37.5m. Crucially, these were driven by increases in volumes – 11.5% and 17.4% respectively– rather than just price rises. What Kantar defines as ‘other international’ ready meals, comprising more niche cuisines, are up 40.4% in value and 30.4% in volumes.
“People have returned to their busy schedules, and the need is for quicker meal options”
Brands are similarly reporting interest in less familiar cuisine. Direct-to-consumer recipe box brand The Cookaway has experienced greater appetite for “authentic recipes from countries such as Malaysia and Pakistan”, say founders Sahil and Nidhi Verma.
The brand’s Greek range has also seen an “uplift following a strong holiday season over summer as consumers look to recreate dishes they tried when travelling from the comfort of their own homes”, they add.
The rise in adventurousness has been driven by a shift in the age of The Cookaway shoppers, says Sahil Verma. “Young people and teenagers have become more interested in cooking international meals,” he says.
For that reason, he argues Brits are “heading into a period where this country will embrace world food in a manner that it has never done before”.
A similar pattern is apparent at Shwen Shwen, which sells Sierra Leonean hot sauces DTC alongside its catering services. Chef and founder Maria Bradford notes “a shift towards British people being willing to try different products from around the world”.
While previously only customers of African descent bought her spiciest product – Salone Fire Chilli Sauce – that sort of proposition is now finding a much wider audience.
For Golden Acre Foods, which supplies both branded and own label goods, this changed the way it does business. It has recently gone into supermarkets with Suhana-branded products “which until now have been available almost exclusively in specialist stores”, says sales director Dan Sparshatt. Changing appetites mean retailers “must offer an increasingly wide assortment of products and brands that appeal to a diverse range of consumers”.
This need for broader retailer ranges is echoed by Bloomberg Intelligence retail analyst Charles Allen. “In a search for market share, supermarkets are making sure they serve all potential customers. This could tempt a broader range of shoppers to try different things,” he says.
He points to Aldi and Lidl running promotional ‘country cuisine’ weeks. “Although some are quite familiar – such as US and Italy – there are some more adventurous ones. This continues a trend for discounters broadening the palate of UK consumers.”
This discounter activity is pertinent, given their soaring sales in chilled ready meals. Lidl experienced the biggest value growth, up 16.9%, with Aldi not far behind on 11.9% – although both under-index in the category compared with total grocery [Kantar].
The effect is starker still in ambient sauces, where Aldi has seen 17.5% value growth and Lidl 12.7%. The only other retailer in growth is M&S, up 10.9% in value.
The rise of the discounters is likely only to intensify as the cost of living crisis worsens. “Shoppers are trading down to cheaper retailers to save money. Both Lidl and Aldi grew through new shoppers as a result,” says Kantar’s Akiwumi.
“This continues a trend for discounters broadening the palate of UK consumers”
That same trend could threaten the future of branded ready meals. While they are presenting a cheaper alternative to restaurants for now, shoppers may go for an even cheaper option of cooking from scratch as economic conditions toughen.
“Where chilled ready meals might struggle is when scratch cooking becomes popular again, as shoppers take further steps to save what money they can,” adds Akiwumi.
In that case, posh branded ready meals may no longer be at the forefront of growth in world cuisine sales.
But whether it’s a restaurant-style ready meal or scratch ingredients, it seems unlikely shoppers will curb their increasing appetite for world cuisine any time soon.