Nearly two months into the horsemeat scandal that has rocked the food industry, UK figures highlighting a sales slowdown in ready meals raise the question of whether this is a temporary blip or a long-term structural decline.

Market data by SymphonyIRI Group published yesterday (4 March), reveal a slowdown in the growth trend of ready meals. This, the analysts say, has been driven by “rising prices and cash-strapped shoppers”. SymphonyIRI adds that the slowdown has been “exacerbated by the horsemeat scandal”.

Value sales growth of the total ready meals market for November and December 2012 dipped to around 1%. Growth dropped further still in early 2012, corresponding with the horsemeat scandal, when sales fell below 2012 levels. Total ready meal sales were down 5% year-on-year, frozen food sales dropped 13% and there was a fall of 3% in chilled ready meal value sales.

It may come as little surprise that frozen food sales are down given the wide range of products drawn into the widely reported horsemeat adulteration scandal. But the category has historically been a high-growth category and a particularly appealing one for cash-strapped shoppers. The category has been driven by the overwhelming need for convenience and value for money in what has become a pretty tough macroeconomic environment.

In light of the figures, Shore Capital analyst Clive Black questions whether onsumer attitudes to prepared food is now changing.

“It will be interesting to see if this is a structural feature of the market or not. Additionally… given the high proportion of contamination of Italian prepared food dishes, whether this category will see a particular downturn too.”

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He pointed to SymphonyIRI’s figures that show 74% of shoppers across Europe said they wanted to buy less ready-made food and to cook more. This serves to highlight the increasing attention consumers have been paying to where their food comes from.

Indeed, the horsemeat saga has undoubtedly undermined consumer confidence in the reliability of the food chain, prompting a call for increased transparency down the supply chain as well as improved labelling to reassure customers they can be 100% sure about what they are consuming.

French President François Hollande last month demanded EU labelling requirements for meat in ready meals. But this is an issue that has been rumbling on for years across the food industry as the consumer appetite for more information about the source of ingredients in the foods they purchase increases.

With many consumers now turning to home cooking, companies such as pork producer Cranswick, meat packer Hilton Food Group and poultry supplier Moy Park, may well benefit from a preference, short-term or otherwise, with respect to an uptake in demand for fresh meat.

Black, however, highlights concerns that this decline in the growth of ready meals and consumers’ reluctance to purchase such items following the horsemeat saga, may conversely be having a negative effect on the trading of many UK food manufacturers.

“Within our universe of domestic companies we would be most concerned that demand for prepared foodstuffs has negatively impacted Bakkavor, Boparan Holdings (which owns Northern Foods and has just announced the acquisition of Vion UK’s poultry & red meat activities, Greencore, Kerry Group and Samworth Bros.”.

Only this week, Greencore chief executive Patrick Coveney told RTÉ’s The Business programme, that sales of its ready meals in the UK fell by 30-40% in February because of the horsemeat scandal.

Coveney said about 7% of Greencore’s business was in ready meals and most of that involved beef. He told the programme that consumers had lost confidence in the supply chain and began buying other foods.

“[That drop in sales was] enormous in an industry that’s several billion of revenue. That makes a big, big difference,” he said.

Greencore was drawn into the horsemeat saga last month when Asda discovered horse DNA in a beef bolognese sauce produced by the convenience food company.

But despite the bleak figures, the phrase ‘every cloud has a silver lining’ may now begin to ring true as retailers and manufacturers ensure rigorous testing measures are put in place across the supply chain as they look to restore consumer confidence.

“[This] will assuage an increasingly sceptical public as to the integrity of the food chain and so demand patterns could return to what may be considered a more normal profile sometime soon,” Black said.

While there has undoubtedly been a cold wind blowing through the frozen ready meal market of late, history suggests memories are short, according to director of strategic insight at SymphonyIRI, Tim Eales.

“It should not take long for the effects of the latest revelations to fade away.”