Growth in the Spanish chilled processed food category is running well ahead of average growth for European countries as manufacturers look to capitalise on changing lifestyles and an ageing population. Emily Woon of Euromonitor International examines the key trends and the prospects for further growth.
The market for chilled processed food is booming in Spain according to the latest research from Euromonitor International. Retail value sales of chilled food in Spain reached EUR2.3bn (US$3.08bn) in 2006, up by a robust 9.8% on 2005. Against overall growth for chilled processed food in Western Europe of 4.9%, this is even more impressive. Spain is the second fastest growing market in the region after Portugal.
The strong growth is being driven by key categories such as chilled processed meats, chilled ready meals and prepared salads, with manufacturers becoming increasingly successful in launching novelties that satisfy consumer demand for convenient and high-quality food, as well as healthier variants.
The chilled ready meals sub-category is by far the fastest growing segment, with retail value sales up 26% to EUR150m in 2006, though chilled pizza sales rose by just 6.1%.
The strong performance is in no small part due to the fact that chilled meals in Spain look to recreate traditional home-made dishes. Spanish lifestyles are changing, with more women joining the workforce, but consumers have not lost their taste for quality food. As a result, the most successful brands are those committed to the concept of “home-made food”.
Meanwhile, chilled processed meats also showed a very positive performance, with retail sales up by more than 9% to almost EUR1.4bn in 2006. Spaniards are traditionally great consumers of such products, both for children’s afternoon snacks and for main meals, and lacking the time to shop, they now prefer to buy pre-sliced and packaged cold meats in supermarkets and hypermarkets.
There are a vast number of different types of chilled processed meats sold in Spain, but the most important remains jamón curado (cured ham), which accounted for over one third of total value sales in 2006. Smoked ham and chorizo were the only two other types of meat to account for a double-digit share of value sales.
Retail sales of prepared salads in Spain are also robust, especially those of washed and cut salads, which are by far the most popular. Sales reached EUR130m in 2006, up by slightly more than 9% from 2005. The proliferation of supermarkets in Spain is helping to boost sales of prepared salads, with young professionals the prime purchasers of such products.
Vega Mayor, with its Florette brand, was the leading player in the Spanish prepared salads market in 2005, with over 38% of value sales. Salad producers see strong potential for further growth, especially in improving sales to older consumers.
In 2004, the chilled sandwich category was relatively undeveloped but it has shown significant growth since then. Sales in 2004 stood at EUR6m but rose to around EUR30m in 2005 and EUR38m in 2006. This sector also offers high growth potential.
The impressive performance was driven by Casa Tarradellas, which launched Mixto in 2005, a chilled ham-and-cheese sandwich that can be heated in the toaster in three minutes. This success has resulted in many of the biggest Spanish bakery companies, such as Bimbo and Panrico, following Casa Tarradellas’ example and launching their own ranges of chilled sandwiches.
Between 2001 and 2005, private label’s share of the chilled processed food market grew gradually by almost four percentage points to 19.3% in 2005, with particularly strong growth seen in chilled fish/seafood products. However, private label only gained 0.6 percentage points in chilled ready meals, the most dynamic area in chilled processed food, during 2004 and 2005. Technological issues were identified by industry sources as the key factor limiting private label performance in chilled ready meals.
One key factor pointing to the strong potential for further growth in the Spanish ready meals market is the country’s ageing population. The latest statistics show that the Spanish population will be the oldest in Europe by 2050, at which point 30% of its population will be over 65. This will result in a higher proportion of people requiring special diets, such as low-cholesterol, salt-free or low-fat to prevent cardiovascular problems.
In addition to an ageing population, rising obesity is another major social issue in Spain. With almost 15% of the adult population considered obese and 40% overweight, the Spanish Government is making increasingly strong attempts to warn consumers about the health problems related to obesity. This is likely to result in greater awareness among consumers about the kind of food they eat. In turn, this should result in more active launches of fat-free or low-calorie chilled ready meals and chilled processed meats, in addition to benefiting sales of chilled fish/seafood products.
On the back of these trends, Euromonitor International forecasts that value sales of health and wellness chilled processed food (including organic and better-for-you variants) will grow by 70% over the 2006-2011 period compared to 25% for standard chilled processed food.
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