UK Retail Distribution of Frozen Ready Meals

                         

Frozen Ready Meals - UK -Distribution

FIGURE 21: UK retail distribution of frozen ready meals, 2001-05

	2001		2003		2005 (est)		% change
	£m	%	£m	%	£m	%	2001-05
Multiple grocers and co-ops	463	71	492	72	446	74	-3.6
Freezer centres	65	10	68	10	54	9	-16.5
Independent grocers	33	5	34	5	24	4	-26.9
Discounters	52	8	48	7	42	7	-18.8
Others	39	6	41	6	36	6	-7.2
Total	652	100	684	100	603	100	-7.5

Data may not equal totals due to rounding

SOURCE: Mintel

The multiples take the lead in the distribution of frozen ready meals, because they have the space in-store to offer a range of options including their own-label products. The extension of the multiples into the convenience store format has helped to boost their retail market share.

End of store, in-store

Frozen foods are generally positioned at the back of store or towards the end of the natural shopping route taken by most consumers as most will have already shopped the retailer’s chilled aisles. This can be a real disadvantage as by this stage of a shopping trip products have to work harder to attract waning shopper interest, particularly if consumers have already got the chilled version. Unattractive freezers and a vapid unattractive freezer aisle, which consumers perceive as cold, further exacerbate the situation. The wider use of upright freezers has gone some way towards improving the look of the fixture, while suppliers have been actively improving the look of products. In 2004/05 a number of brands including Linda McCartney and Birds Eye revamped packaging while new product development is another factor in generating consumer interest.

Retailers seem unable or unwilling to list frozen foods nearer the front of store and this situation is unlikely to change under current conditions where price is used as a differentiator with the resultant thinning of retail margins. Chilled foods offer better returns therefore they will retain the prime siting in-store.

Specialist alternatives

The ‘other’ group includes smaller outlets as well as specialist stores and chains. Cook is an upmarket frozen ready meal retailer and it targets higher-spending consumers in more affluent areas with a convenient ‘as good as home cooked’ option. In early 2006 the group was in conflict with M&S as the latter uses the Cook! name for its own range of ready meal products. Both brands tend to appeal to a more upmarket demographic and the independent retailer is concerned that its customer base will assume that it is supplying Marks & Spencer with its product range.

There are also a number of enterprises utilising the Internet to offer mail order frozen ready meals, examples include Wiltshire Farm Foods, Dining Made Easy and Banquet in a Box.

Freezer centres price focus

Iceland leads the freezer centre operatives, although Farmfoods operates over 300 frozen food stores in the UK. Lower prices are a key part of the mix within these types of outlet as with discount stores. Both discount stores and freezer centres tend to have particular appeal to the C1C2 profile of the frozen ready meals market.

RETAILER PROFILES

The major food retailers all tend to take a similar approach to the frozen meal sector. Products are often sited at eye level or in upright freezers in order to encourage easier browsing and product selection. The own-label offer is restricted to standard and better-for-you brands alongside manufacturer products, with premium names absent from the frozen fixture.

Asda

Asda offers a full range of frozen products under its own-label from international to healthy living. The majority of lines are simply packaged and labelled with the umbrella Asda brand. Products are colour-coded to indicate recipe origin, with purple used for standard curry meals, red for British, light blue for Chinese and green for Italian. There is also a slightly more expensive range in some cuisines for example Asda Indian offers more specific recipes such as Balti and Korma and there is also a selection of products in traditional British recipes such as Sliced Beef platter. There is also a selection under the Good For You brand, Asda’s better-for-you proposition. Asda also offers a specific child’s product with Kids Cheesy Tuna Pasta under its Great Stuff brand.

Tesco

Tesco offers its frozen ready meals under standard retailer own-label or its better-for-you brand Healthy Living, which offers over 5,000 products with 37 added in January 2006, including 20 ready meals. Discounting was a feature of the range with customers being offered multibuys at fixed price discounts in three price tiers in early 2006 in both better-for-you and standard products. The recipe types are differentiated on the basis of origin with the use of different coloured packaging.

Morrisons

Morrisons has adopted the ‘Eat Smart’ healthy eating brand for its packaged foods; fat, sugar and salt level are controlled and each meal contains less than 3% fat and less than 400 calories. The standard ready meals range is labelled on the basis of origin, for example Morrisons Indian meals.

Sainsbury’s

As with the other multiples Sainsbury’s offers the majority of product either under standard own-brand or as part of its Be Good to Yourself better-for-you brand. In their children’s range Sainsbury’s offers three dishes, although not under their separate Blue Parrot label, but simply packaged as Kids Spaghetti Bolognese etc.

Waitrose

Waitrose capitalises on its reputation for strong links with farmers and food suppliers to encourage consumer confidence in areas such as traceability and animal husbandry. In the frozen ready meal sector the group offers the umbrella Waitrose brand as well as Perfectly Balanced meals with less than 3% fat.

Marks & Spencer

In 2004/05 Marks & Spencer has been promoting it food range on the basis of product quality. During 2005 recipe changes were also made to 450 ready meal products as all artificial flavourings, artificial colourings and hydrogenated fats were removed. This was to tie in with the quality credentials of an ongoing advertising campaign to position M&S foods as premium quality products. The retailer’s better-for-you brand is Count on Us.