Fresh Convenience Foods in the U.S.

August 2010 | 214 pages | ID: F6DE0F38420EN
Packaged Facts

Abstracts

ProdUnit Price (Global Site License): US$ 5,500.00

During 2008 and 2009, as the “Great Recession” took hold, many consumer product marketers and retailers acted as if the walls were closing in on them, in many cases resorting to rampant price-slashing. But not fresh convenience food marketers and retailers, who instead saw an opening. Wisely gauging their main competition as coming from the restaurant industry instead of less costly unprepared food, they continued the innovations in quality and convenience that had been underway in the market for several years, and simultaneously began aggressively competing on price with the foodservice industry in an effort to woo customers away.

According to Packaged Facts, these efforts proved successful, spurring a shift by many consumers from restaurant meals to prepared food purchased at retail outlets. As a result, the market for fresh convenience foods grew by 5.1% in 2009 to reach sales of $22.3 billion. Packaged Facts expects these marketing and merchandising efforts to continue to prove successful over the short term, driving sales of fresh convenience foods up another 28% by 2014 to $28.5 billion.

Fully updated from the December 2007 edition, Fresh Convenience Foods in the U.S. offers a comprehensive look at this complex market. It examines the both myriad types of fresh convenience foods and the myriad retail channels through which they are obtained—from traditional outlets such supermarkets and supercenters/mass merchandisers to such increasingly dynamic segments as convenience stores, delis and local food outlets, drugstores, the Internet, and even food carts.

This full updated report details the complex changes that have taken place in the market since the previous edition, with new attention to competition by retail sector. Using Symphony/IRI mass-market sales tracking data, it offers detailed accounts of sales and marketer/brand activity across 17 refrigerated product segments, from lunch kits and dinners/entrees to fresh soup and side dishes, while diving into selected segments using SPINSscan data for natural supermarket channel. The report projects sales, market growth drivers, and competitive opportunities, including an extensive account of the battle with the foodservice industry for consumer dollars that details the staggering—and still growing—assortment of menu and marketing trends shaping the industry.

A special feature of this report is custom survey data by Packaged Facts specifically addressing consumer purchasing of fresh prepared foods, including vis-a-vis the down economy. Additional demographic analysis derives from data compiled by Experian Simmons, New York, NY, including demographic indexing of consumers most or least likely to often eat store-made, pre-cooked meals.

Contents

CHAPTER 1: EXECUTIVE SUMMARY

Introduction

Scope of Report

Two Classifications

Unpackaged Foods

Packaged Foods

Exclusions

Report Methodology

Market Trends

Myriad Modalities of Fresh Prepared Food

Retail Channels Compete with Each Other and with Foodservice

Mega Brands Play Less of a Role in Fresh Convenience Food

Private Label/Store Brands Are Disproportionately Important

U.S. Retail Sales Top $22 Billion in 2009

Unpackaged Food Accounts for Lion’s Share of Market

Figure 1-1: Share of U.S. Retail Sales of Fresh Convenience Foods by Classification, 2005 vs. 2009 (percent)

Supermarkets the Primary Retail Channel

Marketers and Retailers Turn Recession to Advantage

Retail Trends

Take-and-Bake Is Taking Off

Illustration 1-1: Papa Murphy’s Website Banner for Take ‘N’ Bake Pizza

Going Head-to-Head with Restaurants

Supermarkets: The Top Retail Channel for Fresh Prepared Foods

Small Marts: Tesco Sets the Pace

New Product, Menu & Food Trends

Rate of Introductions

Ready Meals and Salads Are the Most Active Classifications

NRA’s “What’s Hot In 2010” Survey IDs Top Menu Trends

Local Food Holds Broad Appeal

World Cuisine: Ethnic Food as American as Apple Pie

Mediterranean Food

Packaged Food Trends

Fresh Prepared Food Retail Segments

Refrigerated Lunch Kits

Refrigerated Prepared Salad/Fruit/Coleslaw

Refrigerated Dinner/Entrees

Consumer Trends

Though Time-Pressed, Most Americans Are Trying to Eat Healthier

Recessionary Decline in Restaurant Traffic a Plus for Fresh Convenience Foods

Figure 1-2: Impact of Recession on Consumer Cooking and Restaurant Habits, May/June 2010 percent of U.S. adults)

18% of U.S. Consumers Are Buying More Fresh Prepared Foods

Prime Targets: Young Singles Living on Their Own

CHAPTER 2: MARKET TRENDS

Introduction

Market Definition: Fresh Prepared Convenience Foods

Two Classifications

Unpackaged Foods

Packaged Foods

Exclusions

Report Methodology

Market Fundamentals

Myriad Modalities of Fresh Prepared Food

The Lunch Kit Lesson: Freshness and Nutrition Sometimes in Eye of Beholder

Mommy Bloggers Give Meal Kits a Big Thumbs Up

Divergence of Views Underscores Complexity of Competition

HACCP (Hazard Analysis and Critical Control Point) = Prevention

State of the Market

Retail Channels Compete with Each Other and with Foodservice

Legal Sea Foods Covers Supermarket, Restaurant, and Online Bases

Illustration 2-1: Kroger In-store Bistro Columbus Ohio (2009)

Illustration 2-2: Carrabba’s Italian Grill in a Publix supermarket in Sarasota Florida

Mega Brands Play Less of a Role in Fresh Convenience Food

Private Label/Store Brands Are Disproportionately Important

Table 2-1: Private-Label Ranking in 17 Packaged Fresh/Refrigerated Convenience Food Segments (in millions of dollars)

More Retailers Manufacturing Their Own Brands

Some Retailers Manufacturing Other Stores Brands

Market Size and Growth

U.S. Retail Sales Top $22 Billion in 2009

Table 2-2: U.S. Retail Sales of Fresh Convenience Foods, 2005-2009 (in millions of dollars)

Unpackaged Food Accounts for Lion’s Share of Market

Figure 2-1: Share of U.S. Retail Sales of Fresh Convenience Foods by Type, 2005 vs. 2009 (percent)

Entrees Top Unpackaged Foods Chart

Figure 2-2: Prepared Deli Foods: Share of Total U.S. Retail Dollar Sales by Type, 2009 (percent)

Lunch Kits the Top Mass-Market Packaged Segment

Table 2-3: Percent Share of SymphonyIRI-Tracked Dollar Sales of Packaged Refrigerated Fresh Convenience Food by Segment, 2009

Supermarkets the Primary Retail Channel

Figure 2-3: Share of U.S. Retail Sales of Fresh Convenience Foods by Channel, 2009 (percent)

Looking Ahead

Marketers and Retailers Turn Recession to Advantage

On The Food Front

On The Packaging Front

On the Merchandising Front

Targeted Pricing Plus Innovation Equals Profit

Prepared Foods Gain at Convenience Stores

Restaurant Industry Takes It on the Chin

The I Hate to Cook Book: Lessons and Opportunities

Sandra Lee Combines Fresh Ingredients and Prepared Food on the Food Network

Illustration 2-3: Recipe for Sandra Lee’s Creamy Chicken Noodle Soup

Prepared Foods Are a Time-Saving Meal Component

Can Sales of Fresh Convenience Food Continue to Grow?

Will Jobless Recovery Be Enough to Trigger New Product Turnaround?

Projected Market Growth

Table 2-4: Projected U.S. Retail Sales of Fresh Convenience Foods, 2009-2014 (in millions of dollars)

CHAPTER 3: RETAIL TRENDS

Introduction

Retail Distribution Methods

Direct Delivery Advantages

The Cost of Face-to-Face Business

Advantages of Warehouse Delivery

Smaller Marketers Work Through Brokers

Fresh Prepared Foods Can Involve Unique Distribution

Trade Shows Introduce New Products to Market

Types of Retail Channels

Retail Trend Overview

Take-and-Bake Is Taking Off

Illustration 3-1: Papa Murphy’s Website Banner for Take ‘N’ Bake Pizza

Kroger Is an Early Adapter of Take-and-Bake

Overall Deli Pizza Sales Up 15% in 2009

Incentives in Retail Pizza

Going Head-to-Head with Restaurants

In-Store Full-Services Restaurants: Focus on Wegmans’ Pub

Store Brands Dominate 2009 Product Launches

Table 3-1: Leading Marketers of Fresh Convenience Foods by Number of New Product SKUs, 2009-2010 (percent)

Fresh & Easy Focusing on Eatwell Line

Illustration 3-2: Fresh & Easy Website Banner for Eatwell Fresh Prepared Foods

Retail Channel Spotlight

Channel Blurring

Supermarkets: The Top Retail Channel for Fresh Prepared Foods

Bloom: Wave of the Future?

Illustration 3-3: Website Description of Bloom Stores from Shopbloom.com

Small Marts: Tesco Sets the Pace

Health & Natural Food Stores: Retailers Moving Mainstream

Delis and Other Local Food Outlets: Urban Cannibals Bodega and Bites Applies New Spin

Illustration 3-4: Interior of Urban Cannibal Bites and Bodega

Social Media Work Well for Small Food Shops

Illustration 3-5: Sparrow Market Facebook Wall Page

Supercenters, Mass Merchandisers and Warehouse Clubs

Prepared Foods Leads BJ’s Comeback

Convenience Stores: Prepared Foods Becoming Increasingly Sophisticated

C-Store Strategies

7-Eleven Going Strong

Gourmet/Specialty Food Stores: A Tough Competitor in Affluent Urban Areas

Drugstores: Prepared Food Redux

Illustration 3-6: Lunch Counter and Soda Fountain at Hewitt’s Drugstore (Anchorage, Alaska) 1940s

Illustration 3-7: Duane Reade Convenience Food Section, 2009

Illustration 3-8: Sushi Duane Reade Drugstore Style

Walgreens Moves Forward with Chilled Prepared Foods Tests

Dollar Stores: Prepared Food One of Three Top Gainers

E-tailers and Mail Order

Illustration 3-9: Fresh Direct prepared Food webpage

Illustration 3-10: Susan’s Healthy Gourmet Homepage

Illustration 3-11: Google Search Shopping Results for “Fresh Crab Cakes”

Gourmet Food Trucks & Carts: A Great Test Kitchen

Table 3-2: Percent of Adults Who Have Bought Food from Street Stands, Food Trucks or Mobile Food Carts in Past Month: Overall and by Key Demographic, February 2010

CHAPTER 4: NEW PRODUCT, MENU & FOOD TRENDS

New Product Trends: Fresh Packaged Products

Rate of Introductions

Figure 4-1: Number of Fresh Prepared Food Reports and SKUs, 2005-2010

Ready Meals and Salads Are the Most Active Classifications

Figure 4-2: Number of Fresh Prepared Food SKUs by Classification, 2005-2009

New Product Themes

Fresh and Convenient

Illustration 4-1: Olivia’s Organics Single Salad to Go! and Walmart’s Marketside Hoagie

Small Mart and Other Private-Label Brands Going Strong

Value Appeals

Illustration 4-2: Wegmans Alternatives to Eating Out Pulled BBQ Pork, and Fresh & Easy’s Family Size Fully Cooked Big Lasagna with Meat Sauce

Gourmet and Ethnic

Natural/Organic

Kids Foods

Illustration 4-3: Oscar Mayer Lunchables Beef Taco Wrapz, and Natural Foods Corp.’s Better’n Peanut Butter Sandwiches

Table 4-1: Examples of Fresh Prepared Food New Product Introductions: By Type, Marketer and Brand, 2009-2010

Selected Menu & FoodTrends

NRA’s “What’s Hot In 2010” Survey IDs Top Menu Trends

Local Food Holds Broad Appeal

7 Different Aspects of Local Food Trend

Taste

Value

Nutrition

Global Ecology

Freshness

Local Economic Development

Local Vegetables Could Add Green to Local Economies

Food Safety

Informal Focus Group Reflects Packaged Facts’ 7 Aspects of Local Food Appeal

Local Fresh Prepared Foods

Illustration 4-4: Dinners to You Web Page Featuring Dinners with Fresh, Local and Seasonal Ingredients

World Cuisine: Ethnic Food as American as Apple Pie

Mediterranean Food

An Increasingly Diverse Segment

Regional Mediterranean Cuisine

But Mediterranean Often Painted with Broad Brush

Sushi

Sam’s Sushi

Gluten-Free Foods

Why a Gluten-Free Diet?

Gluten-Free Takes on Healthy Halo

Gluten-Free Fresh Prepared Food

Illustration 4-5: Jason’s Deli Gluten-Free Sandwiches Online Survey, 2010

CHAPTER 5: PACKAGED FOOD TRENDS

Introduction

Fresh Prepared Food Retail Segments

Table 5-1: Selected Segments of Packaged Refrigerated Fresh Convenience Foods: 2009 SymphonyIRI-Tracked Dollar Sales and Percentage Change, 2009 vs. 2008 (in millions of dollars)

Refrigerated Lunch Kits

The Largest Segment, at $771 Million

Top Three Marketers Account for 98% of Sales

Most Top 10 Marketers Show Impressive Growth

Spotlight on Kraft Foods

Focus on Lunch Kits

Table 5-2: Leading Refrigerated Lunch Kit Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Prepared Salad/Fruit/Coleslaw

Sales Up 7.3% in 2009

Lower Tier of Top 10 Marketers Tightly Bunched

Eight of Top 10 Marketers Register Strong Growth

Spotlight on Del Monte Foods

Table 5-3: Leading Refrigerated Prepared Salad/Fruit/Coleslaw Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Dinner/Entrees

Sales Slip a Bit in 2009

Curly’s & Jack Daniels Are Only Top 10 Gainers

Spotlight on Hormel

Table 5-4: Leading Refrigerated Dinners/Entrees Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Appetizers/Snack Rolls

Sales Up 12% to $385 Million

Advanced Fresh Concepts Controls Over Half of Sales

Japanese Food Express Leads Growth Among Top 10

Smaller Marketers Show Explosive Growth

Spotlight on Segment Leader AFC

Table 5-5: Leading Refrigerated Appetizers/Snack Rolls Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Flavored Spreads

Sales up 16% to $312 Million

Mediterranean Dip Specialist Sabra Leads

Sabra Also the Growth Leader Among Top 10

Spotlight on Segment Leader Sabra

Joint Agreement with PepsiCo

Table 5-6: Leading Refrigerated Flavored Spreads Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Potato Side Dishes

Segment Sales Stagnate

Spotlight on Segment Leader Northern Star

Table 5-7: Leading Refrigerated Potato Side Dish Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Pizza/Pizza Kits

Sizzling 18% Growth in 2009

Plaza Belmont Controls a Third of Sales

Vicolo Scores 90% Retail Sales Gain

Spotlight on Segment Leader Plaza Belmont

Table 5-8: Leading Pizza/Pizza Kit Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Hand-held Non-Breakfast Entrees

Sales Slip 2%

Top 10 Marketers Had Tough Sledding In 2009, But Lower Tier Marketers Excel

Spotlight on Segment Leader Stefano Foods

Table 5-9: Leading Hand-held Non-Breakfast Entrees Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Refrigerated Fresh Soup

No Growth Despite Dazzling Performance by Legal Sea Foods

Spotlight on Third-Place Legal Sea Foods

Table 5-10: Leading Fresh Soup Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Other Fresh Convenience Food Segments

Refrigerated Side Dish Growth Stagnant, Competition Hectic

Spotlight on Refrigerated Side Dish Segment Leader Bob Evans Farms

Reser’s Leads Refrigerated Meat Spread/Salad Segment

Bob Evans Leads Moderately Gaining Refrigerated Breakfast Entrees Segment

Great Lakes Kraut Bests Kraft, ConAgra and Birdseye in Sauerkraut Segment

All Top Marketers See Sales Decline in 2009

Spotlight on Sauerkraut Segment Leader Great Lakes Kraut

Refrigerated Chili Segment Cools Despite Some Strong Showings

$3 Million Potato Segment Dominated by Bob Evans

Stuffed Potatoes and Sweet Potatoes

Table 5-11: Leading Refrigerated Side Dish Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Table 5-12: Leading Refrigerated Meat Spread/Salad Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Table 5-13: Leading Refrigerated Breakfast Entrees Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Table 5-14: Leading Refrigerated Sauerkraut Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Table 5-15: Leading Refrigerated Chili Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Table 5-16: Refrigerated Potato Marketers and Brands: by SymphonyIRI-Tracked Sales and Share, 2009 vs. 2008 (in millions of dollars)

Natural Supermarket Channel Top Picks

Introduction

Refrigerated Entrees & Sushi & Grab N Go Meals

Table 5-17: Top 5 Marketers/Brands in the Natural Supermarket Channel: Refrigerated Entrees & Sushi & Grab N Go Meals, 52 Weeks Ending February 10 vs. Year-Ago (in dollars)

Salsas & Dips

Table 5-18: Top 5 Marketers/Brands in the Natural Supermarket Channel: Salsas & Dips, 52 Weeks Ending February 10 vs. Year-Ago (in dollars)

CHAPTER 6: CONSUMER TRENDS

Introduction

Methodology

Though Time-Pressed, Most Americans Are Trying to Eat Healthier

Figure 6-1: Consumer Attitudes About Healthy Foods and Time Constraints, 2009/10 (percent of U.S. adults)

Recessionary Decline in Restaurant Traffic a Plus for Fresh Convenience Foods

Table 6-1: Level of Agreement with Statement, “I Am Spending Less on Groceries These Days Because of the Economy,” May/June 2010 (percent of U.S. adults)

Figure 6-2: Impact of Recession on Consumer Cooking and Restaurant Habits, May/June 2010 percent of U.S. adults)

NGA Survey Supports Shift from Restaurants to Retail/At- Home Meal Prep

Packaged Facts Survey Indicates Trend Will Continue

Table 6-2: “In Comparison to Right Now, How Much Money Do You Plan to Spend on Meals Eaten at Full-Service Restaurants During the Following 3 Months?”, May/June 2010 (percent of adults)

Table 6-3: “In Comparison to Right Now, How Much Money Do You Plan to Spend on Meals Eaten at Fast-Food Restaurants During the Following 3 Months?”, May/June 2010 (percent of adults)

Table 6-4: “In Comparison to Right Now, How Much Money Do You Plan to Spend on Takeout/Delivery/Drive-Thru Meals Eaten at Full-Service Restaurants During the Following 3 Months?”, May/June 2010 (percent of adults)

18% of U.S. Consumers Are Buying More Fresh Prepared Foods

Table 6-5: “Have You Eaten More Store-Bought Fresh Prepared Foods Since the Recession Began?”, May/June 2010 (percent of adults)

Room for Growth

Table 6-6: Percent of Adults Who Have Purchased or Eaten Any Store-Bought Fresh Prepared Foods in the Last 3 Months, May/June 2010

Reasons for Buying Ready-to-Eat and/or Heat-and-Eat Food from Grocery Stores or Convenience Stores

Table 6-7: Reasons for Getting Ready-to-Eat and/or Heat-and-Eat Food from a Grocery Store/Supermarket, 2009 (percent)

Table 6-8: Reasons for Getting Ready-to-Eat and/or Heat-and-Eat Food from a Convenience Store/Gas Station, 2009 (percent)

Walmart Tops List of Outlets for Fresh Convenience Foods

Table 6-9: Percent of Adults Who Have Purchased Fresh Convenience Food from Outlets Other Than Conventional Supermarkets in the Last 3 Months: By Type of Outlet, May/June 2010

45% of Consumers Have Dinner Composed Solely of Fresh Convenience Food

55% of Consumers Have Dinner Partially Composed of Fresh Convenience Food

Table 6-10: Percent of Adults Who Have Eaten a Meal Composed Solely of Store-Bought Fresh Prepared Food Items in the Last 3 Months: By Daypart, May/June 2010

Table 6-11: Percent of Consumers Who Have Eaten a Meal Composed Partially of Store-Bought Fresh Prepared Food Items in the Last 3 Months: By Daypart, May/June 2010

The Experian Simmons Survey System

Relatively Flat indexes Among Frequent Consumers of Store- Made, Pre-Cooked Meals

Prime Targets: Young Singles Living on Their Own

Table 6-12: Above-Average Demographics for Agreement with Statement: “I Often Eat Store-Made, Pre-Cooked Meals” (index of U.S. adults)

Large Households Make for Less Frequent Consumers

Table 6-13: Below-Average Demographics for Agreement with Statement: “I Often Eat Store-Made, Pre-Cooked Meals” (index of U.S. adults)

Customers Who Disagree That They Frequently Eat Fresh Prepared Meals

Table 6-14: Above- and Below-Average Demographics for Disagreement with Statement: “I Often Eat Store-Made, Pre-Cooked Meals” (index of U.S. adults)

Summing Up: Good News for Fresh Convenience Food Marketers

Store-by-Store Analysis: Thumbs Up for Meijer, Down for Sam’s Club

Table 6-15: Above Average Consumer Demographics for Agreement with Statement “I Often Eat Store-Made, Pre-Cooked Meals” by Outlet (index of U.S. adults)

Table 6-16: Below Average Consumer Demographics for Agreement with Statement “I Often Eat Store-Made, Pre-Cooked Meals” by Outlet (index of U.S. adults)

Table 6-17: Above Average Consumer Demographics for Disagreement with Statement “I Often Eat Store-Made, Pre-Cooked Meals” by Outlet (index of U.S. adults)

Table 6-18: Below Average Consumer Demographics for Disagreement with Statement “I Often Eat Store-Made, Pre-Cooked Meals” by Outlet (index of U.S. adults)

Wegmans Survey Shows that 22% of Americans Eat Fresh Prepared Foods Weekly

Customers Want Their Meals to Be Easy, Healthy and Affordable

Appendix: Addresses of Selected Marketers and Retailers