UK consumption of chilled ready meals
continues to rise sharply in contrast to the frozen ready meals market, which declined
last year.

Changing lifestyles giving rise to a demand
for more convenience foods, coupled with a growing taste for exotic foods is driving sales
of chilled ready meals, which were worth an estimated £700 million last year (see Table
One), according to a recent market survey by Corporate Intelligence on Retailing. Entitled
‘Chilled Ready Meals a Consumer Product Survey,’ the study predicts that rapid
growth will continue over the next few years with the market value reaching £1.06 billion
in 2001.

Key Trends
Recipes of international origin now account for two-thirds of chilled ready meals sales
and consumers are steadily trading up as products of higher quality and based on more
authentic recipes are developed, so affording retailers better margins. Italian, Indian
and Oriental meals are outperforming the traditional meals sector in value terms, as they
generally command a higher premium. Italian meals until recently had been the most
popular, with lasagne outselling all other dishes, but constant innovation has now allowed
the Indian meals sector to challenge for supremacy. Italian and Indian dishes are now on
par with each commanding a 21% share of the chilled ready meals market in the UK (see
Table Two in Cover Story).

More Exotic
To satisfy and indeed to encourage consumer demand for more exotic dishes, new recipes are
constantly being developed. Newer international cuisines such as Thai, Japanese, Malaysian
and Moroccan are emerging. Cajun, Creole and Afro-Caribbean recipes are entering the chill
cabinet, and established sectors of the market are also broadening their appeal through
innovation. Consequently, Indian cuisine is expanding into Moghlai and Mysore recipes,
while Italian adopts Venetian and Tuscan regional cuisine, and the choice within Chinese
chilled ready meals is extended to include Sezchuan, Cantonese, Peking and Shanghai

Some of the multiple retailers have also
launched luxury ranges, such as Tesco Finest and Marks & Spencer Connoisseur, which
offer special occasion meals.

Private Label Dominant
Having been pioneered by Marks & Spencer, the chilled ready meals market is dominated
by private label products. Although Marks & Spencer is still the top player with about
45% of the market (see Table Two), the other retailers are catching up and matching
M&S in terms of breadth of range but also on quality and price, points out Corporate
Intelligence on Retailing.

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Because of the dominance of Marks & Spencer and its policy of exclusive supply
agreements, the chilled ready meals market is split between those manufacturers operating
dedicated factories for M&S and those supplying other retailers. Suppliers to Marks
& Spencer include Northern Foods (encompassing Cavaghan & Gray acquired last
year), RF Brooks (part of Tomkins), Sun Valley Foods, Rahbek-Food (Albert Fisher) and
Marshall Food Group (recently acquired by Grampian Food Group). Headed by Hazlewood Foods,
the group of manufacturers supplying to other retailers also includes Geest, privately
owned Oscar Mayer, Noon Foods (acquired recently by WT Foods) and S&A Foods (see Cover
Story). The top players within the chilled ready meals market are featured in Table One in
the Cover Story.

Chilled and Frozen
Having exhibited average annual growth of over 13% between 1993 and 1997, chilled ready
meals overtook the frozen sector in value size during 1998. By contrast the frozen ready
meals sector grew by just 3.6% over the same period and ambient was static (see Table

According to Birds Eye Wall’s, the
market leader with an 18% branded share, frozen ready meals sales declined by 5.5% to
£574.5 million last year due to less new product development activity – crucial to
driving the market forward – and increasing competition from chilled ready meals. Retailer
own brand products, with 40% of sales, dominate the frozen ready meals market but
manufacturers still have a strong branded presence, unlike the chilled ready meals market.
Behind Birds Eye Wall’s the other major branded players in frozen ready meals are
Nestle and Heinz, each with 9%, and United Biscuits on 6%. A host of smaller processors
account for the remainder.

The analysis of the chilled ready meals
market features in Consumer Goods UK (formerly Retail Business), which is Corporate
Intelligence’s monthly journal researching consumer goods markets in the UK (cost
£495 for 12 issues or £150 per issue). For further information contact Corporate
Intelligence on Retailing on Tel 0171 6969006.

Table One: Market Size for Chilled
Ready Meals, 1993-98

  1993 1994 1995 1996 1997 1998
Value (£m) 342 384 464 505 570 700
% Change 12 12 21 9 13 23

Source: Corporate Intelligence on


Table Two: Multiples’ Market
Shares for Chilled Ready Meals, 1997-1998

Multiple 1997 1998*
Marks &
49% 45%
Sainsbury’s 22% 23%
Tesco 15% 17%
Asda 5% 5%
Safeway 4% 4%
Waitrose 3% 3%
Others 2% 3%
Total 100% 100%

Source: Corporate Intelligence on
Retailing. * Partly forecast.


Table Three: Chilled Ready Meals v
Frozen Ready Meals, 1993-1997

Sector 1993 1994 1995 1996 1997 Change 1993-97 1993 Share 1994 Share
Chilled £342m £384m £464m £505m £570m 67% 35% 44%
Frozen £517m £541m £575m £607m £608m 18% 53% 47%
Ambient £108m £106m £102m £106m £110m 2% 11% 9%
Total £967m £1,031m £1,141m £1,218m £1,288m 33% 100% 100%

Source: Corporate Intelligence on Retailing