For cultural reasons, the ready meals category remains virtually undeveloped in certain Asia Pacific countries, but elsewhere in the region sales are growing, spurred by changing lifestyles and retail promotion in markets such as Japan and Taiwan. Emily Woon of Euromonitor International reports.
Per capita consumption of ready meals in the Asia Pacific region may be tiny in comparison with Europe and the US but the category is growing, on the back of changing lifestyles, retail promotion and the introduction of new products.
According to Euromonitor International, the retail value of the ready meals market in Asia Pacific is expected to total US$14.8bn for 2006, an increase of about 3% over the previous year. Volume sales are expected to be up by 3.6% at almost 1.9m tonnes.
Although the region is generally undeveloped in comparison with western countries, in Japan it does boast the world’s second largest ready meals market in value terms, after the US. In 2005, per capita spending on ready meals in Japan was US$103, compared with $75 in the US and $158 in the UK.
Moreover, increasingly hectic lifestyles, the rising number of women in the workplace and the increase in single households have stimulated sales of ready meals as a quick and convenient alternative to time-consuming Japanese home cooking.
Conversely, per capita spending on ready meals in Asia Pacific as a whole was only US$4 in 2005, compared to the Western Europe average of US$54. Outside Japan, the limited consumption is primarily due to the dominance of home cooking and the traditional mindset that fresh food is better than pre-prepared meals.
However, the ready meals sector is gaining momentum within Asia Pacific, with changing consumer lifestyles, the development of new products that cater to local tastes and aggressive promotions by retailers the main driving forces behind the growth.
In Japan, chilled prepared meals accounted for 84% of ready meal value sales in 2005, with lunch boxes the prime sub-category. However, Euromonitor International predicts that sales of lunch boxes will slow down significantly over the next four years, due to a lack of novelty and increased competition from lower-end family restaurants that increasingly offer takeaway services. Intensified competition may well drive small manufacturers out of the market, as it is increasingly difficult to generate profits from lunchboxes. Chilled ready meals sales are expected to grow at an average of just 1% per annum from 2005 to 2010, compared with 4% between 2001 and 2005.
Sales of canned/preserved ready meals gained momentum in Japan over the last two years, on the back of the rapidly growing popularity of retort-packed rice porridge. As these products appeal particularly to older consumers, demographic factors, namely Japan’s ageing population, are spurring growth. Canned and preserved ready meals are set to grow at twice the rate as chilled, at least for the next two years.
The second largest ready meals market in the region is Taiwan, with estimated value sales of US$451m in 2006, up by as much as 17% from 2005. This robust growth was driven by the strong performance of chilled ready meals which is by far the largest and fastest growing sector, accounting for 86% of value sales.
The rising number of dual income families has meant the traditional three meals a day is becoming a rushed five. Furthermore, industry surveys suggest that as many as 60% of white collar urban residents in Taiwan do not have a regular dinner at home.
On the back of these trends, manufacturers have been developing a variety of Taiwanese-style chilled prepared meals, such as Yu Bian Chang’s two traditional Taiwanese dishes of chicken drumsticks and pork ribs, introduced by 7-Eleven. Family Mart, 7-Eleven’s main rival, has launched its Discover Taiwan range, which includes local favourites such as Chia Yi chicken rice flavour and Hwa Lien Bian Shi wanton.
Along with the introduction of new products by manufacturers, aggressive promotion and own brand development by large retailers has been a major factor in the development of the ready meals market in Taiwan. In fact, ready meals accounted for more than 10% of 7-Eleven’s total sales in 2005. More retailers are expected to follow suit in the near future. Indeed, large branded manufacturers looking to enter Taiwan will face an uphill task trying to gain shelf space and compete with retailers’ own brands in terms of product range and price.
In China, the third largest market in the region, canned/preserved is the most popular style of ready meal, with expected retail value sales of US$370m in 2006, an increase of 8% from the previous year.
At present, other ready meal formats are virtually non-existent in China but canned ready meals are now approaching saturation and choice is limited, very often restricted to mixed congee and canned meat-based products. Sales of canned/preserved ready meals are therefore expected to slow in the near future.
However, increasing microwave oven ownership will foster growth in frozen and chilled ready meals sales, especially among young and single consumers, and particularly in urban centres. The development of microwave-ready meals has been high on the agenda of the national food industry, and may help to trigger a new trend in Chinese cuisine.
Sales of ready meals in other Asia Pacific countries are insignificant at present, according to Euromonitor, accounting for only around 4% of total regional sales.
The reasons for the lack of development in other markets, such as South Korea, are largely cultural. The roles of men and women are clearly demarcated, with men fulfilling the task of breadwinner in the family and women acting as homemakers. In addition, consumers in these countries generally prefer to use fresh ingredients to prepare meals, and if not cooking at home will generally buy from foodservice outlets, such as street stalls, rather than rely on mass-produced ready meals.
Relevant reports for further information on ready meals in the Asia Pacific region: