Growth in chilled and frozen foods driven by segmentation

Value growth in overall food and non-alcoholic drink retail was 4.8% in the year to June 10, said Kantar World Panel.

CFA secretary general Kaarin Goodburn said: “Particularly for the larger-volume lines and recipes, there are many options from economy, standard and luxury to ‘healthy’, all at different price points.”

‘Premiumisation’

Director general of the BFFF Brian Young pointed to ice cream as a category that had benefited from ‘premiumisation’, achieving 4.4% value growth on a 4.5% drop in volume.

Goodburn underlined the continued importance to consumers of convenience and time-saving prepared options. “A couple of years ago, there was a surge in ready-to-cook products generally, not just in chilled. But this does not appear to have been sustained,” she said.

The CFA estimates that chilled foods now account for about 13% of the retail food market.

Strong YOY increases

Innovation, such as meals in microwaveable pouches, has also played its part in driving growth, Goodburn added. Newer chilled sub-categories showing especially strong YOY increases included prepared fruit (17.9%), stir fry (11.6%) and wraps (11.2%).

Greencore said it has seen strong growth in ready meals and sandwiches over the past 12 months. “Some of the value growth will be driven by price inflation,” said a spokesman. “Interestingly, we have also seen growth in the higher-end, premium products as consumers trade down from eating out.”

Young said: “There are lots of things going on. With ice cream, for instance, there have been increases in premium product sales, but also cost pressures from ingredients such as milk.”

Frozen ready meals saw 4.2% value growth on a 1% drop in volume, the BFFF reported. But according to Young, “silly prices” of £1 per meal have thinned out competition in the category, helping to push prices back up to around the £1.30 level.

Data for both sectors was supplied by Kantar World Panel.