Prepared produce is an increasingly mature market that is seeing steady growth in both volumes and value, in line with the trend for convenience and added-value across the supply chain.
But there are opportunities for more momentous growth as industry insiders flag up seasonal produce and a focus on health as current trends within the category, while others claim more premium products would give the category a leg-up for the future and help prevent a growth plateau.
Prepared produce rose in value by 1.6 per cent during the last year, matched by a volume increase of one per cent [Kantar Worldpanel, 52 w/e 1 February 2015]. Whereas Kantar analyst James Foti attributes the figures to an “increase in shoppers buying prepared produce more often and shoppers paying more per kg”, producers highlight food regulations, public health policies and meal-deal promotions that also boosted the category during last year. “An element of growth in the category will be from the free school food meal policy, that came into force last September 2014,” says Neil Sharratt, director of Leicestershire-based prepared produce firm AB Produce, which supplies into the manufacturing and foodservice sectors.
Sharratt says while manufacturing is a relatively mature part of the market, due to the final products being less time-sensitive, foodservice is much more dynamic and fresh-focused.
“Seasonal produce is a big thing at the moment – customers are asking, should we focus on seasonal, or all-round produce? Prepared is a relatively mature market at the moment, but there are some interesting discussions going on around NPD, in terms of moving towards seasonal products. Kale is a big push at the moment.”
The supermarket price wars have left virtually no category untouched, and prepared produce is no different. Sarah Baldock, category and innovation director at Natures Way Foods, explains: “The produce price war across the retailers continues to be a challenge, with 49p/50p deals across key wholehead produce lines. Prepared overall saw a drop in shopper numbers in 2014 as shoppers opted for the wholehead deals.”
A spokesperson for prepared produce specialist Finlays Produce says the category has been 'static' over the last year, but any growth has been driven by Tesco, followingpoor sales in 2013 and a stronger ‘3 for 2’ promotional mechanic this year, and Waitrose, which released new products in October 2014 and has a continued store growth programme.
'In terms of product subgroups, it’s prepared potatoes and single portion lines that see growth,' the spokesperson continues. 'Outside of the Finlays definition of the market, growth has been and will continue to be driven by discounters, with more prepared products recently seen in these retailers and both of them undergoing store improvement policies to increase the size of their chilled produce aisle.'
Claire Matson, category manager for vegetable and snack supplier Freshtime, agrees that the prepared produce market changes little year on year. But she adds: “Innovation that grows the market slightly each year has been driven, especially in the snack salads category, by health-focused products. Additionally, brands are working harder to communicate that prepared doesn’t necessarily mean artificial. This increase in quality has combined with the increased consumer awareness of provenance and health to grow the category.”
One prepared company that is going the extra mile to glean growth where it can is Northern Ireland-based Mash Direct, which transformed itself from vegetable grower to grower-processor and now supplies a range of prepared and ready meals to foodservice and retail customers. “Prepared produce is, at the core, a very traditional part of a meal be it mashed potatoes or cauliflower cheese,” says director Jack Hamilton. “With this in mind, it is always about doing the simple things well, as well as making the complicated products seem easy.
“Additionally, brands are working harder to communicate that prepared doesn’t necessarily mean artificial and that good foods can be done the way you would prepare it at home.This increase in quality has combined with the increased consumer awareness of provenance and health to grow the category.”
Hamilton says the company grew 18 per cent in the last year to £14 million, and has boosted exports to become over 25 per cent of the business. “With this behind us we have some very exciting new product ideas for 2015 that we believe will continue to keep the farm as busy as ever for years to come,” he adds.
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