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Chilled Foods
Chilled Foods Foreword
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Contents
Executive Summary 1
1. Market Definition 2
REPORT COVERAGE....................................................................................................................2
MARKET SECTORS.......................................................................................................................2
MARKET TRENDS.........................................................................................................................3
Promotions......................................................................................................................................3
Own-Brand Domination ..............................................................................................................3
Competition From Other Products.............................................................................................4
Healthy Eating ...............................................................................................................................4
Other New Product Development Trends ................................................................................4
Organic Food .................................................................................................................................4
ECONOMIC TRENDS....................................................................................................................5
Table 1.1: UK Economic Trends (000, m, %, million and ), 2008-2012............................5
MARKET POSITION......................................................................................................................7
The UK..............................................................................................................................................7
Table 1.2: UK Expenditure on Chilled Prepared Food
and All Food at Current Prices (m and %), 2009-2013.........................................................8
Figure 1.1: UK Expenditure on Chilled Prepared Food
and All Food at Current Prices (m), 2009-2013......................................................................8
Overseas...........................................................................................................................................9
2. Market Size 10
THE TOTAL MARKET................................................................................................................10
Table 2.1: The Total UK Chilled Prepared Foods Market
by Sector by Value at Current Prices (m), 2009-2013..........................................................10
Figure 2.1: The Total UK Chilled Prepared Foods Market
by Sector by Value at Current Prices (m), 2009-2013..........................................................11
BY MARKET SECTOR.................................................................................................................12
Sliced Cooked Meats...................................................................................................................12
Table 2.2: The UK Sliced Cooked Meats Sector by Value
at Current Prices (m and %), 2009-2013................................................................................12
Fresh Soup.....................................................................................................................................28
Table 2.11: The UK Fresh Soup Sector by Value at Current Prices (m and %),
2009-2013......................................................................................................................................28
Figure 2.11: The UK Fresh Soup Sector by Value
at Current Prices (m), 2009-2013.............................................................................................29
Others.............................................................................................................................................29
Table 2.12: The UK Others Sector by Value at Current Prices
(m and %), 2009-2013...............................................................................................................30
Figure 2.12: The UK Others Sector by Value at Current Prices
(m and %), 2009-2013...............................................................................................................30
3. Industry Background 31
RECENT HISTORY.......................................................................................................................31
NUMBER OF COMPANIES.......................................................................................................31
Table 3.1: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
in the Manufacture of Food Products, 2009-2013.................................................................32
Table 3.2: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
in the Manufacture of Food Products by Turnover Sizeband (000 and number),
2009-2013......................................................................................................................................32
EMPLOYMENT............................................................................................................................33
Table 3.3: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
in the Manufacture of Food Products by Employment Sizeband, 2009-2013.................33
REGIONAL VARIATIONS IN THE MARKETPLACE.............................................................33
Table 3.4: Number of UK VAT- and/or PAYE-Based Enterprises Engaged
in the Manufacture of Food Products by Region, 2009-2013.............................................34
DISTRIBUTION.............................................................................................................................34
HOW ROBUST IS THE MARKET?...........................................................................................35
LEGISLATION...............................................................................................................................35
Food Safety Act ...........................................................................................................................35
Food Standards Act 1999............................................................................................................36
Food Labelling Regulations 1996..............................................................................................36
Food Labelling in the EU............................................................................................................37
The Temporary Workers Directive ...........................................................................................37
Organic Labelling Legislation ...................................................................................................37
Other Food Legislation ..............................................................................................................38
KEY TRADE ASSOCIATION......................................................................................................38
Chilled Food Association............................................................................................................38
Campaigns ....................................................................................................................................38
Food and Drink Federation........................................................................................................39
Food Storage and Distribution Federation.............................................................................39
National Farmers Union .............................................................................................................39
4. Competitor Analysis 41
THE MARKETPLACE..................................................................................................................41
MARKET LEADERS.....................................................................................................................41
Arla Foods Ltd...............................................................................................................................41
Bernard Matthews Ltd................................................................................................................43
Cranswick PLC...............................................................................................................................44
Danone Ltd ...................................................................................................................................45
Greencore Group PLC .................................................................................................................46
Kerry Foods Ltd ...........................................................................................................................47
Mller Dairy (UK) Ltd .................................................................................................................48
Nestl UK Ltd ...............................................................................................................................48
Samworth Brothers Ltd...............................................................................................................49
Unilever PLC..................................................................................................................................50
OTHER COMPANIES .................................................................................................................50
Onken Dairy (UK) Ltd..................................................................................................................50
S&A Foods Ltd...............................................................................................................................50
Yeo Valley Organic .....................................................................................................................51
Rachels .........................................................................................................................................51
Charlie Bighams .........................................................................................................................51
OUTSIDE SUPPLIERS..................................................................................................................51
Distributors....................................................................................................................................51
Ingredients....................................................................................................................................52
Packaging .....................................................................................................................................52
MARKETING ACTIVITY.............................................................................................................52
Main Media Advertising Expenditure......................................................................................52
Table 4.1: Main Media Advertising Expenditure on Selected Chilled Prepared Food
by Sector (000), Year Ending June 2013................................................................................52
Table 4.2: Main Media Advertising Expenditure on Selected Chilled Prepared Food
by Sector by Brand (000), Year Ending June 2013..............................................................54
Exhibitions and Trade Shows.....................................................................................................57
5. Brand Strategy 59
INTRODUCTION..........................................................................................................................59
COMPANIES BRANDS..............................................................................................................59
Ready Meals .................................................................................................................................59
Chilled Pizzas................................................................................................................................60
7. Buying Behaviour 64
CONSUMER PENETRATION ...................................................................................................64
Ready Meals..................................................................................................................................64
Table 7.1: Chilled and Frozen Ready Meals (excluding pizzas) Most Often Consumed
in the Last 12 Months by Sex, Age, Social Grade and Region (% of adults), Year
Ending March 2013......................................................................................................................64
Table 7.2: Frequency of Chilled Ready Meal Consumption
by Sex, Age, Social Grade and Region (% of adults), Year Ending March 2013.............67
Table 7.3: Consumption of Chilled and Frozen Ready Meal
Types in the UK by Age, Sex, Social Grade and Region
(% of adults), Year Ending March 2013..................................................................................69
Pizza................................................................................................................................................70
Table 7.4: Chilled and Frozen Pizzas Most Consumed
in the Last 12 Months by Age, Sex, Social Grade and Region
(% of adults), Year Ending March 2013..................................................................................71
Pasta and Salads ..........................................................................................................................72
Table 7.5: UK Consumption of Chilled Pasta and Salads
in the Last 12 Months by Sex, Age, Social Grade and Region
(% of adults), Year Ending March 2013..................................................................................73
Yoghurts .......................................................................................................................................74
Table 7.6: UK Consumption of Yoghurts and Fromage Frais
the Last 12 Months by Sex, Age, Social Grade and Region
(% of adults), Year Ending March 2013..................................................................................75
Table 7.7: Frequency of Yoghurt Consumption in the UK
in the Last 12 Months by Sex, Age, Social Grade and Region
(% of adults), Year Ending March 2013..................................................................................77
Cakes and Pastries........................................................................................................................78
Table 7.8: Consumption of Frozen, Chilled and Fresh Cakes
and Pastries in the Last 12 Months by Sex, Age, Social Grade
and Region (% of adults), Year Ending March 2013............................................................79
8. Current Issues 81
HEALTH ........................................................................................................................................81
Government Action and the Public Health Responsibility Deal ........................................81
Buying Behaviour and Manufacturer Response ...................................................................82
The Horsemeat Scandal .............................................................................................................83
OWN-BRAND DOMINANCE....................................................................................................83
TECHNOLOGY ............................................................................................................................84
The Internet and Social Media..................................................................................................84
ORGANIC AND FREE-FROM....................................................................................................84
RISE IN FOOD PRICES AND ENERGY COSTS......................................................................85
CORPORATE ACTIVITY ............................................................................................................85
Arla Foods UK PLC........................................................................................................................85
Bernard Matthews Ltd ...............................................................................................................86
Cranswick PLC...............................................................................................................................86
Danone...........................................................................................................................................86
Kerry Foods...................................................................................................................................87
Mller Dairy (UK) Ltd..................................................................................................................87
Nestl UK Ltd................................................................................................................................87
William Jackson Food Group ....................................................................................................87
Spar.................................................................................................................................................87
LEGISLATIVE CHANGES ...........................................................................................................87
ENVIRONMENT ..........................................................................................................................88
Packaging......................................................................................................................................88
WRAP..............................................................................................................................................89
10. Forecasts 91
INTRODUCTION..........................................................................................................................91
General Economic Forecasts......................................................................................................91
Table 10.1: Forecast UK Economic Trends (000, % and million), 2013-2017....................92
FORECASTS 2014 TO 2018......................................................................................................92
Table 10.2: The Forecast Total UK Chilled Prepared Foods Market by Sector by Value
at Current Prices (m), 2014-2018.............................................................................................92
Figure 10.1: The Forecast Total UK Chilled Prepared Foods Market by Sector by Value
at Current Prices (m), 2014-2018.............................................................................................93
Value-Added Seafood and Poultry, Chilled Prepared Fish, Chilled Smoked Fish............94
Table 10.3: The Forecast UK Value-Added Seafood and Poultry, Chilled Prepared
Fish, Chilled Smoked Fish Sector by Value at Current Prices (m), 2014-2018.................94
Figure 10.2: The Forecast UK Value-Added Seafood and Poultry, Chilled Prepared
Fish, Chilled Smoked Fish Sector by Value at Current Prices (m), 2014-2018.................94
Sliced Cooked Meats ..................................................................................................................95
Table 10.4: The Forecast UK Sliced Cooked Meats Sector
by Value at Current Prices (m), 2014-2018............................................................................95
Figure 10.3: The Forecast UK Sliced Cooked Meats Sector
by Value at Current Prices (m), 2014-2018............................................................................95
Yoghurts and Yoghurt Drinks...................................................................................................96
Table 10.5: The Forecast UK Chilled Yoghurts and Yoghurt Drinks Sector by Value
at Current Prices (m), 2014-2018.............................................................................................96
Figure 10.4: The Forecast UK Chilled Yoghurts and Yoghurt Drinks Sector by Value
at Current Prices (m), 2014-2018.............................................................................................96
Chilled Ready Meals ...................................................................................................................96
Table 10.6: The Forecast UK Chilled Ready Meals Sector
by Value at Current Prices (m), 2014-2018............................................................................97
Figure 10.5: The Forecast UK Chilled Ready Meals Sector
by Value at Current Prices (m), 2014-2018............................................................................97
Chilled Cakes and Desserts.........................................................................................................97
Table 10.7: The Forecast UK Chilled Cakes and Desserts Sector by Value at Current
Prices (m), 2014-2018.................................................................................................................98
Figure 10.6: The Forecast UK Chilled Cakes and Desserts Sector by Value at Current
Prices (m), 2014-2018.................................................................................................................98
Chilled Salads ...............................................................................................................................98
Table 10.8: The Forecast UK Chilled Salads Sector by Value
at Current Prices (m), 2014-2018.............................................................................................99
Figure 10.7: The Forecast UK Chilled Salads Sector by Value
at Current Prices (m), 2014-2018.............................................................................................99
Chilled Quiches/Flans/Defined Fresh Meat and Pastries.......................................................99
Table 10.9: The Forecast UK Chilled Quiches/Flans/Defined Fresh Meat and Pastries
Sector by Value at Current Prices (m), 2014-2018.............................................................100
Figure 10.8: The Forecast UK Chilled Quiches/Flans/Defined Fresh Meat and Pastries
Sector by Value at Current Prices (m), 2014-2018.............................................................100
Sandwiches, Rolls, Baguettes and Wraps .............................................................................100
Table 10.10: The Forecast UK Sandwiches, Rolls, Baguettes
and Wraps Sector by Value at Current Prices (m), 2014-2018.........................................101
Figure 10.9: The Forecast UK Sandwiches, Rolls, Baguettes and Wraps Sector
by Value at Current Prices (m), 2014-2018..........................................................................101
Chilled Pizza ...............................................................................................................................101
Table 10.11: The Forecast UK Chilled Pizza Sector by Value
at Current Prices (m), 2014-2018...........................................................................................102
Figure 10.10: The Forecast UK Chilled Pizza Sector by Value
at Current Prices (m), 2014-2018...........................................................................................102
Fresh Soup...................................................................................................................................102
Table 10.12: The Forecast UK Fresh Soup Sector by Value
at Current Prices (m), 2014-2018...........................................................................................103
Figure 10.11: The Forecast UK Fresh Soup Sector by Value
at Current Prices (m), 2014-2018...........................................................................................103
Others...........................................................................................................................................103
Table 10.13: The Forecast UK Others Sector by Value
at Current Prices (m), 2014-2018...........................................................................................103
Figure 10.12: The Forecast UK Others Sectors by Value
at Current Prices (m), 2014-2018...........................................................................................104
MARKET GROWTH..................................................................................................................104
Figure 10.13: Growth in the Total UK Chilled Prepared Foods Market by Value
at Current Prices (m), 2009-2018...........................................................................................104
FUTURE TRENDS.......................................................................................................................105
Health Issues................................................................................................................................105
Growth in Sales of Organic and Free-From Products ........................................................105
Own-Brand Dominance and Continued Supermarket Discounting
and Promotions .........................................................................................................................105
Executive Summary
This Key Note Market Report Plus examines the UKs chilled foods sector. It
focuses on a variety of categories, including pizzas, desserts, ready meals,
salads and more. Key Note predicts growth in all of the categories considered
in this report, with the market exhibiting total value growth of 25.2% between
2009 and 2013.
Chilled foods is a strong and resilient industry which has enjoyed year-on-year
growth for some years now. Sales of chilled foods represent a greater
proportion of overall expenditure on food and drink than they did 5 years ago.
In common with almost all other food industries, the sector faces challenges,
but its flexibility, popularity and diverse range of products have stood the
category in good stead. Chilled foods as an overall category is well-placed to
withstand challenges such as rising food prices and consumers cutting down
their expenditure.
In many ways, chilled foods have the edge over their competitors in the eyes
of many consumers, despite their relatively high price tags. The ready-to-eat
aspect of chilled ready meals renders them more convenient than frozen
competitors and they tend to contain fewer preservatives.
This report examines these trends and more, while looking at some of the
industrys main manufacturers and distributors and examining buying
behaviour trends in detail.
1. Market Definition
REPORT COVERAGE
This Key Note Market Plus examines the chilled foods market in the UK. It
focuses on products in categories defined by the Chilled Foods Association
(CFA). The report covers products found in the chilled aisle of supermarkets
and incorporates chilled foods sold in coffee shops and other outlets. Milk and
dairy products are excluded (these categories are covered by the Key Note Milk
& Dairy Products Market Report); however, yoghurts do fall within the scope
of this report, owing to their versatility and the fact that they are often
consumed as a dessert.
MARKET SECTORS
The CFA divides the chilled foods market into the following primary categories:
ready meals
pizzas
desserts
soup
sandwiches
others includes fresh pasta, prepared fruit, dips, breads, pt and other
spreads and pastes, sandwich fillers, stuffing, rice, vegetarian foods, sauces,
salad dressings and stir-fry products.
MARKET TRENDS
Promotions
Trends in sales of chilled foods have been shaped by promotions such as Marks
& Spencers (M&Ss) Dine in for Two and Tescos Dine in for 10 offers, which
feature a range of chilled products from their own-label ranges. Both offer a
main course, side dish and dessert (all in two-person portions) and a drink,
including the option of a bottle of wine. Such promotions support strong
volume sales and introduce customers to a wide range of a supermarkets
products, but they can undermine total value sales.
One of the main appeals of such deals is that they offer a way to have an
enjoyable, indulgent evening without going out and spending lots of money.
Such deals are usually available most of the time, but are given greater
prominence around special occasions such as Mothers Day and Valentines
Day. They tend to be entirely comprised of own-brand products, meaning that
they pose a robust challenge to branded products, which are usually not
included in such deals and therefore have a higher price tag.
Own-Brand Domination
As discussed in Chapter 5 Brand Strategy many of the categories that
make up the chilled foods market are dominated by supermarket own brands.
This is particularly true of the chilled pizza and chilled ready meals categories.
This is another factor that can make it very difficult for other companies to
compete. It is often the case that as soon as a company brings out a new
product, the supermarkets will emulate it. Usually supermarkets are in a
position to sell the imitation product at a lower cost than its branded
counterpart and can give these products more shelf space and involve them in
promotions.
The success of own brands is largely down to their relative affordability and
the vast range of choice they offer the customer, with prices ranging from
highly affordable to premium. Brands have historically signified quality and
have been able to inspire consumer loyalty, but branded products need to work
even harder to justify their higher price tags during ongoing economic crises.
If branded products cannot outperform own-label brands on features such as
flavour, convenience and nutritional content, they cannot expect to compete
easily. In the eyes of many spend-conscious consumers, supermarket versions
are as good as established brands, but, crucially, lower in cost.
Healthy Eating
Much of recent new product development (NPD) has focused on demand for
healthier or lighter options. Some ready meals, pizzas, yoghurts and
sandwiches can contain high levels of salt, sugar, saturated fat, preservatives,
colourings and/or additives. Concern over the health implications of eating too
much of these substances has been drawn into the spotlight by the
Government and health organisations, causing increasing numbers of
consumers to reject products they regard as unhealthy. Manufacturers have
responded by introducing light versions, which contain reduced levels of
substances thought to contribute to health complications.
As with other food and drinks sectors, notably the cooking sauces and spirits
categories, there is an ongoing and increasing demand for adventurous and
exotic new flavours. Spicy foods are particularly in demand.
Organic Food
Years of ongoing economic uncertainty have been associated with a decline in
value sales in the organic food and drinks sector, although this trend was
reversing in 2013. Organic shopping is particularly popular among young
people, which should mean a strong customer base for the future. The industry
is also likely to have benefited from the horsemeat scandal (see Chapter 8
Current Issues), since organic meat production is generally characterised by
much greater transparency.
ECONOMIC TRENDS
Gross domestic product (GDP) at annual chain-linked prices contracted in 2009.
Since then, growth has been positive, but weaker year-on-year. GDP at current
prices also contracted in 2009 (by 3.1%) and has subsequently grown
year-on-year, by 4.8% in 2010, by 3.5% the following year and by 1.8% in 2012.
Positive GDP growth suggests a healthier economy, reflecting reflects and
inspiring greater consumer confidence. These factors could support greater
sales of chilled foods in general and bodes well for premium and branded
products. It may also inspire increased use of restaurants, however, which could
impact negatively on sales of products such as chilled ready meals, desserts and
pizzas.
Table continues...
...table continued
Annual
chain-linked GDP 1,541,039 1,461,361 1,485,616 1,502,216 1,504,091
% change
year-on-year - -5.2 1.7 1.1 0.1
Actual Number of
Unemployed Persons
in the UK (million)
Actual number of
claimants 0.91 1.53 1.50 1.53 1.59
% change
year-on-year - 68.1 -2.0 2.0 3.9
Table continues...
...table continued
Source: Population Estimates for UK, England and Wales, Scotland and Northern
Ireland Population Estimates Timeseries 1971 to Current Year, December 2011/
National Population Projections, 2010-based projections/United Kingdom
Economic Accounts, November 2013/Consumer Price Inflation, October 2013/
Labour Market Statistics, November 2013, National Statistics website Crown
copyright material is reproduced with the permission of the Controller of HMSO
(and the Queens Printer for Scotland)
MARKET POSITION
The UK
Table 1.2 shows that chilled foods represented an estimated 15.1% of total
expenditure on food in 2013. The table shows that the chilled foods sector has
increased its market share of all food year-on-year (with the exception of 2012).
This implies that either the cost of chilled foods is rising at a faster rate than
other products or that people are dedicating a larger proportion of their
weekly spend to chilled products. It may of course be a combination of both.
Expenditure on chilled foods increased by 25.2% between 2009 and 2013,
while total expenditure grew by 18.7%.
Expenditure as a % of all
food 14.3 14.7 15.0 15.0 15.1
All food
90,000
Chilled food
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2009 2010 2011 2012 2013
Note: all food excludes expenditure on chilled foods for illustration purposes; 2013
figures are Key Note estimates.
Overseas
The global chilled foods sector is a multi-billion pound industry comprised of
companies of all sizes. The US market alone is worth an estimated 18bn. These
companies range from multinational enterprises such as Kraft Foods Group Inc,
Unilever and Nestl, to small farmers producing chilled foods for local
customers. Growth is linked to the rise in the number of people who can afford
a refrigerator in their homes and by a growing demand for convenient, tasty
food. Chilled foods tend to contain fewer preservatives than frozen or canned
products, and are therefore perceived by many as more healthy. As consumers
become more and more concerned about living a healthy lifestyle, chilled foods
have benefited from their fresh, healthier image.
2. Market Size
Table continues...
...table continued
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
2,500 Others
0
2009 2010 2011 2012 2013
Note: value-added seafood, etc. includes poultry, chilled prepared fish, chilled smoked
fish; chilled quiches, etc. includes flans/defined fresh meat and pastries; sandwiches, etc.
includes rolls, baguettes and wraps; 2010 and 2011 data have been revised by Kantar
since the previous edition of this Key Note report, owing to a change in Kantars
methodology; 2009 represents 52 weeks ending 27th December 2009; 2010 represents
52 weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013; figures for 2013 are Key Note
estimates; figures for yoghurts and yoghurt drinks are Key Note estimates.
BY MARKET SECTOR
It is thought that this category has profited from the recent years of economic
uncertainty as it has put pressure on consumers budgets, with many reducing
the amount of money they spend on things such as eating out for lunch at
work; sliced cooked meats provide a relatively cheap and easy packed-lunch
option. As the table shows, however, the rate of growth declined during the
second half of the review period. Various factors may account for this
slowdown, including the success of own-brand products, promotions to
maintain volume sales, a lack of innovation and a rise in the number of people
choosing to reduce or cut out their meat intake for health reasons.
Despite the sector growing in value, it has seen its market share decline over
the review period, dropping from 18.6% in 2009 to 17.3% in 2013.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
Key Note estimates place the value-added seafood subsector at 516m in 2013,
following growth of 30.6% in the sector over the 5-year review period.
Value-added poultry has seen even stronger growth of 48.3%, taking the
sectors value to 1.15bn in 2013. Overall, the fish and value-added seafood
and poultry sector showed consistent growth, resulting in a total value of
2.16bn. The sectors share has grown, from 15.8% in 2009 to 17% in 2013.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
1,500
1,250
1,000
750
500
250
0
2009 2010 2011 2012 2013
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; chilled smoked fish not previously included; 2009 represents 52 weeks ending
27th December 2009; 2010 represents 52 weeks ending 26th December 2010; 2011
represents 52 weeks ending 25th December 2011; 2012 represents 52 weeks ending
23rd December 2012; 2013 represents 52 weeks ending 25th December 2013.
1,800
1,750
1,700
1,650
1,600
1,550
1,500
1,450
1,400
1,350
1,300
2009 2010 2011 2012 2013
Chilled ready meals tend to have a greater appeal than frozen versions, as the
former are generally perceived to be better quality and to have a better taste.
The chilled ready meals category is about twice the size of the frozen ready
meals sector in value terms, and has displayed stronger growth in recent years.
Both sectors are explored in detail in Key Notes Ready Meals Market Report
Plus 2013.
As Table 2.5 reveals, the value of the UK ready meals sector has grown from
1bn in 2009 to an estimated 1.48bn in 2013, representing growth of 47.1%.
The sectors market share has grown from 10% in 2009 to 11.7% in 2013.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
1,500
1,400
1,300
1,200
1,100
1,000
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
This sector is vulnerable to hikes in food prices and to the impact of consumer
trends such as the increased interest in healthy eating, which has characterised
buying behaviour in recent years. Nevertheless, chilled cakes and desserts are
popular. They offer an easy, convenient treat and may appeal particularly to
consumers forced by economic uncertainty to restrict their spending. The trend
has also favoured premium products, for although they are relatively expensive
compared to own-brand offerings, they offer a high quality, yet cheaper eating
experience than eating out at a restaurant. The sectors share of the market
has declined slightly year-on-year, dropping from 9% in 2009 to 8.5% in 2013.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
does not sum due to rounding
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
Chilled Salads
Table 2.7 shows the performance of the chilled prepared leafy salads and
vegetables category, which has displayed growth of 28.1% between 2009 and
2013. Key Note estimates that the value of this category was 916m in 2013,
having displayed strong and consistent growth. Growth in the chilled prepared
mixed tray salad subsector has fluctuated, increasing by 31.6% in 2010 and 20%
in 2011, with the rate of growth dropping down in 2012 and 2013. The
subsectors value was estimated at 32m in 2013, having grown by 68.4% over
the review period.
The total combined value of the two sectors in 2013 was 948m, having grown
by 29.3% over the review period. The sectors market share was 7.2% in 2009
and 7.5% in the subsequent years.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
does not sum due to rounding
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
800
700
600
500
400
300
200
100
0
2009 2010 2011 2012 2013
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
Chilled quiches and flans (m) 145 148 146 148 150
% change year-on-year - 2.1 -1.4 1.4 1.4
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
does not sum due to rounding
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
600
500
400
300
200
100
0
2009 2010 2011 2012 2013
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
525
500
475
450
425
400
2009 2010 2011 2012 2013
Note: 2013 figures are Key Note estimates; 2009 represents 52 weeks ending
27th December 2009; 2010 represents 52 weeks ending 26th December 2010; 2011
represents 52 weeks ending 25th December 2011; 2012 represents 52 weeks ending
23rd December 2012; 2013 represents 52 weeks ending 25th December 2013.
Chilled Pizza
As Table 2.10 shows, the chilled pizza category was worth 381m in 2009,
growing by 17.6% to reach an estimated 448m in 2013. Market share has
declined slightly over this period, dropping from 3.8% to 3.5%.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
Fresh Soup
The fresh soup category was worth 89m in 2009, growing by 27% to an
estimated 113m in 2013. Following strong growth in 2010 and stable growth
in 2011 and 2012, Key Note estimates that growth slowed a little in 2013.
Market share has remained steady at 0.9% throughout.
2011 data have been revised by Kantar since the previous edition of this Key Note
report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
Note: 2011 data have been revised by Kantar since the previous edition of this Key Note
report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
Others
Table 2.12 shows the combined value of other chilled foods categories (such as
chilled stir-fry products and chilled dips). This stood at 990m in 2009
(representing 9.8% market share) and grew to 1.19bn in 2013. Market share
slightly dropped over the review period to 9.4% in 2013. Growth in this sector
has fluctuated; it was particularly strong in 2011 at 10.3%, before dropping to
1.4% the following year. Growth of 6.7% followed in 2013.
2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology
e Key Note estimates
Note: 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52 weeks
ending 26th December 2010; 2011 represents 52 weeks ending 25th December 2011; 2012
represents 52 weeks ending 23rd December 2012; 2013 represents 52 weeks ending
25th December 2013.
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2013 figures are Key Note
estimates; 2009 represents 52 weeks ending 27th December 2009; 2010 represents 52
weeks ending 26th December 2010; 2011 represents 52 weeks ending
25th December 2011; 2012 represents 52 weeks ending 23rd December 2012; 2013
represents 52 weeks ending 25th December 2013.
3. Industry Background
RECENT HISTORY
The UK chilled foods industry is a dynamic and innovative one, comprised of a
vast range of products. The sheer number of products means that there is
something in this sector for all ages, budgets, diets and preferences. New lines
and variations on old themes are constantly being developed in response to
consumer trends such as healthier, cheaper living and the ever-growing
pressure to save time. Chilled foods tend to enjoy a healthier, more wholesome
image than frozen or tinned products, as the former tend to contain fewer
preservatives than the latter two.
The domination of own-brand products has grown in recent years, due in part
to the successes enjoyed by supermarket deals such as Tescos Dine in for 10
and Marks & Spencers (M&Ss) Dine in for Two. Both offer the supermarkets
own-brand starters, main meals and chilled desserts. It is very hard for branded
products to compete with such offers. Supermarkets also tend to imitate
products from other companies within months of these products release,
further compounding the difficulties faced by brands.
NUMBER OF COMPANIES
The tables in this chapter make use of data provided by National Statistics in
the publication UK Business: Activity, Size and Location. The 2013 edition of
this publication shows that there were 6,600 UK VAT- and/or PAYE-based
enterprises engaged in the manufacture of food products in 2013. This number
has grown year-on-year, from 6,330 in 2009, representing growth of 4.3%.
Table 3.2 shows these enterprises divided into turnover sizebands. The highest
number of enterprises were found in the 100,000 to 249,000 band, which
contained 1,420 enterprises (21.5%). Outside of this, there was a more or less
even spread by turnover, ranging from 635 (9.5%) in the 500,000 to 999,000
band to 980 (14.8%) in the 1m to 5m band.
EMPLOYMENT
Table 3.3 contains figures for enterprises divided by employment sizeband. The
majority of businesses have either four or fewer employees (45.3%) or between
five and nine workers (17.7%). Only 190 enterprises had over 250 employees,
accounting for 2.9% of all enterprises.
Note: totals for 2011 and 2012 do not match those in Tables 3.1 to 3.3 due to rounding
by the source to the nearest 5.
DISTRIBUTION
The UKs distribution network is one of the most efficient in the world, due to
the countrys small size and relatively well-maintained infrastructure. Products
can reach shelves within hours of coming off the distribution line.
Sometimes products, lines or categories can be hit by health scares such as the
horsemeat scandal or by product recalls. Changing consumer and government
attitudes to health and nutrition force new product development (NPD) into
particular channels. Many products in the chilled foods sector are relatively
expensive and have seen volume sales decline as economic uncertainty persists,
wages stagnate and the cost of living rises. Products must compete with the
developing trend towards home cooking and the associated popularity of meal
kits.
Despite the difficulties facing the sector, chilled products remain an essential
part of most consumers shopping lists. For many people, products such as
yoghurts are indispensable. Their convenience and freshness ensures that they
remain a tempting offer, while the chilled ready meals sector provides a
sophisticated and easy alternative to home cooking. These can also provide a
cheap but indulgent night in as an alternative to eating out in a restaurant.
Overall, the future of the sector looks solid.
LEGISLATION
A wide range of legislation covers the food industry. Processing, distribution,
retail, packaging and labelling is covered by a wide range of laws, regulations,
codes of practice and guidelines. Much of the detailed legislation regarding
food standards originates from the European Commission.
gives enforcement officers the power to inspect, at all reasonable times, any
food intended for human consumption, and to detain and seize food that is
suspected of not complying with food safety requirements
The Act gives effect to the proposals of the White Paper The Food Standards
Agency: a Force for Change. It sets out the Agencys main objective of
protecting public health in relation to food, along with the functions that it
will assume in pursuit of this aim, and gives the Agency the powers that are
necessary to enable it to act in the consumers interest at any stage in the food
production and supply chain.
The Regulations apply in England, Scotland and Wales, while a separate but
similar law applies in Northern Ireland. The Regulations contain more detailed
provision than the Food Safety Act regarding descriptions of food, and set out
what information must be provided on food labels to satisfy the law, such as
best before dates, weight and volume, etc.
origin labelling for fresh meat (pigs, sheep, goats and poultry)
penalties for agencies and end-users that do not comply with the TWD.
The UK was given 3 years to introduce legislation that would ensure the
Directive was applied in the UK job market. Legislation was made into law in
October 2011.
The CFA works with the manufacturers of UK chilled food, predominantly the
ones supplying the retail trade. The Association provides chilled and prepared
food expertise and support to its members, typically in the areas of hygiene
and food safety assurance, raw material controls, factory management and
product design. Full CFA members are eligible for free services in all of these
categories. Members include Hain Daniels Group, Del Monte, Findus Group,
Finlays, Greencore Group, Kerry Foods and Moy Park.
Campaigns
A recent campaign saw the CFA work to change the FSAs proposed guidance
to restrict the shelf-life of chilled vacuum-packaged/
modified-atmosphere-packaged products (foods stored at 3 degrees Celsius
[C] to 8C) from 10 to 5 days. The CFA was successful in securing the 10-day
rule.
The FDF counts its technical expertise, deep understanding of industry issues
and clear focus on the policy areas that have the biggest impact on the industry
as core its strengths. Members include Nestl UK Ltd and Danone UK Ltd.
Other Associations
The WFA represents the UK companies that operate in the ethnic foodservice
market, covering products from Asian, Oriental, Afro-Caribbean, Eastern
European, Middle Eastern and Mediterranean countries. Members include
retailers, wholesalers, manufacturers, importers and consultants. The
Association aims to support members by providing guidance on rules,
regulations and issues that affect the foodservice industry. The WFAs flagship
event is the annual World Food Awards. This is a national level, annual awards
ceremony, identifying the best performers in the sector in Europe and the UK.
4. Competitor Analysis
THE MARKETPLACE
The manufacturing market is led by large global companies, some of which
operate in several countries across the world. Some also operate in many
different sectors, with chilled foods just one aspect of their production. As this
chapter shows, many of the companies operating in the UK chilled foods
market are subsidiaries of multinationals. In addition to manufacturing their
own brands, some manufacturers also produce chilled products for the big
retailers to be sold as own brands.
At the other end of the spectrum, there are several much smaller operators
such as farm shops, which market their products primarily regionally to their
local communities. These products, many of which are organic, compete with
the premium end of the market, relying on their traditional, local image and
the perception that they are generally more wholesome. While a measure of
consolidation has taken place among the larger companies, very small
producers of products such as yoghurts are growing in number, despite the
fact that they often have to retail their products with relatively high price tags.
MARKET LEADERS
Company Structure
Arla Foods Ltd is a subsidiary of Arla Foods AmbA of Denmark. The latter is a
global dairy company and a co-operative owned by dairy farmers. It has over
18,000 employees and production facilities in 12 countries, with sales offices in
a further 30. In October 2003, Arla Food PLC and Express Dairies PLC merged
to form Arla Foods UK PLC, with 51% of its shares owned by Arla Foods AmbA
(a co-operative owned by approximately 9,400 Danish and Swedish milk
producers). In April 2007, Arla Foods AmbA acquired the remaining 49% share
and Arla Foods UK PLC was delisted from the London Stock Exchange (LSE) and
became a subsidiary.
Arla has been included in this report because it produces yoghurts and custard
as well as milk, cheese, spreads, butter and cream; and because it is a
competitor of other similar companies producing chilled foods which fall
within the scope of this report. Arla Foods UKs brands include Cravendale,
Anchor, Lurpak and Tickler. The company supplies fresh dairy products to major
retailers and foodservice customers. Arla is the UKs number one dairy company
by turnover and milk pool (3.2 billion litres [l] per year). It is currently made up
of 3,200 farmers and three groups, Arla Milk Link, Arla Foods Milk Partnership
(AFMP) and Arla Milk Link directs. Arla has a 26% share of Great Britains milk
pool and is the largest supplier of butter, spreads and cheese in the country.
The company makes 4,000 deliveries to stores and regional distribution centres
each day and has a team of approximately 4,000 people located across its
dairies, distribution centres and head offices.
In May 2012, Arla Foods AmbA and Milk Link announced the proposed merger
of the two companies to create one of the largest European dairy
co-operatives. In September 2012, Arla Foods and Milk Link announced that
regulatory approval for the merger was granted by the European Commission
and subsequently the two companies merged on 1st October 2012.
In September 2013, it was announced that Wieden + Kennedy London has been
handed the global advertising account for Arla-branded dairy products. The
agency will create traditional and digital advertising across Europe for
Arla-branded products. A new campaign is expected to launch in early 2014.
In August 2013, it was reported that the European Commission had approved
a management buyout (MBO) of Crediton Dairy from Arla by two former Milk
Link executives. Also in August 2013, Arla Fioods announced proposals to close
its dairy and distribution centre at Ashby-de-la-Zouch, with the aim of
transferring milk processing to Buckinghamshire. With Arlas 1 billion-litre
fresh milk processing facility in Buckinghamshire nearing completion, the
company said it planned to transfer volume to the new dairy at Aylesbury. The
closure is planned for April 2014 and could result in the loss of up to 370 jobs.
Arla announced on 30th August 2013 that the Arla Foods AmbA Board of
Directors and the board of Milk Partnership Ltd (Arla Foods Milk Partnerships
investment company, of which all AFMP farmers are members) have
announced proposals for co-ownership. This would see a further 1,600 British
dairy farmers become co-owners of Arla Foods AmbA. At the same time, the
boards of Arla Milk Link and Arla Foods AmbA announced changes to the Arla
Milk Link merger conditions.
Milk Partnership Ltd (MPL) will become a corporate member and co-owner of
Arla Foods, with effect from 1st January 2014. The proposals were approved
by the Arla Foods Board of Representatives in October 2013 and on 30th
October MPL/AFMP farmers voted overwhelmingly (99.4%) in favour of
converting MPL to a co-operative and for AFMP to adopt a new set of Articles
of Association.
Financial Results
Turnover at Arla was 1.72bn for the year ending 31st December 2012 and the
company made a pre-tax profit of 8.4m. Turnover for the year ending
31st December 2011 was 1.59bn and pre-tax profit was 31.1m.
Company Structure
Bernard Matthews Holdings Ltd was founded by the eponymous Bernard
Matthews in 1950, with 20 turkey eggs. It is the largest turkey farmer and
producer of turkey products in the UK, supplying pubs, restaurants and many
of the major grocery retailers and foodservice providers and employing over
2,000 people. All of its 56 farms are located in Norfolk, Suffolk and Lincolnshire,
rearing over 7 million turkeys in the UK each year. Under the brand Bernard
Matthews Farms Ltd, the company supplies a range of products made from
100% British turkey, in the form of cooked meats and frozen and fresh breaded
poultry. It also supplies fresh and frozen joints, crowns and whole turkeys, and
a seasonal Christmas range.
Bernard Matthews wholly owns subsidiary Saga Foods, a leading turkey farmer
and meat producer in Hungary. Other members of the Bernard Matthews
Group include Bernard Matthews Oldenburg, headquartered in northern
Germany, which sells fresh, cooked and frozen poultry products. Lincs Turkeys,
established in 1980, was acquired by Bernard Matthews in April 2010 and today
produces around 1 million turkeys a year.
The company was badly hit by an outbreak of bird flu in 2007 and its products
were heavily criticised. In July 2008, it launched a rebranding exercise,
renaming itself Bernard Matthews Farms. It created a range of products called
Big Green Tick, which have no artificial colours and flavours, lower levels of
saturated fats and reduced salt content. It also introduced new packaging. As
part of a strategy to focus on turkey, the company sold its sandwich division in
January 2008. Since then, it has also focused on promoting turkey as a healthy
option and recruited celebrity chef Marco Pierre White to promote its products.
In November 2011, the company announced a renewable power project at its
site in Holton, Suffolk, in partnership with Glendale Power Ltd.
The company announced in September 2013 that it would have a new UK Chief
Executive Officer (CEO) from early 2014, at the same time as announcing a
multimillion-pound cash injection from turnaround and restructuring investor
Rutland Partners. The investment firm has taken a major equity stake in the
company and two Rutland partners have joined the Bernard Matthews board.
Executive Chairman David Joll was reported in a 7th September 2013 article
posted by The Grocer as saying that Bernard Matthews would use the funds to
support its brand with new advertising and marketing and make much-needed
investments in its facilities. This will include rolling out new feeders and
drinkers and insulating farm roofs. Because of the business poor financial
performance recently, it hasnt been able to invest, according to the Executive
Chairman; the money from Rutland is expected to change this.
Financial Results
Turnover at Bernard Matthews Ltd was 341.4m for the year ending
1st July 2012, while pre-tax profit was 3.3m. Turnover for the previous year,
ending 3rd July 2011, was 470.8m, with the company recording a pre-tax loss
of 28.1m.
Cranswick PLC
Company Structure
Cranswick PLC was formed by farmers in the 1970s and produced pig feed. A
combination of acquisitions and subsequent organic growth now sees
Cranswick supplying a range of fresh pork, gourmet sausages, premium cooked
meats, traditional air-dried bacon, charcuterie, pastry products and sandwiches
from a number of production facilities in the UK. Fresh and processed food is
supplied to the UK retail sector, food manufacturing and foodservice
operators.
Since 2000, the company has acquired Wellingmore Mill (later sold),
Continental Fine Foods, North Wales Foods, The Sandwich Factory, Delico,
Bowes of Norfolk, Kingston Foods and Wyland Farms. Various elements of the
company have been sold over the same period, including the Cranswick Pets &
Aquatics division. The company has 12 production sites, located in Yorkshire,
Norfolk, Manchester, Buckinghamshire, Warwickshire and North Wales.
In April 2013, Cranswick announced that it had taken over East Anglian Pigs
Ltd, a breeding, rearing and finishing business. In July 202, Cranswick bought
Milton Keynes-based premium cooked and roast meat producer Kingston
Foods for an undisclosed sum.
Financial Results
Cranswick PLC reported turnover of 875.2m and a pre-tax profit of 47.4m in
the year ending 31st March 2013. Turnover for the previous year, ending
31st March 2012, was 820.8m; pre-tax profit was 48.4m.
Danone Ltd
Company Structure
Danone Ltd is one of four UK subsidiaries of France-based Group Danone SA.
Danone Ltd is a fresh dairy business, with yoghurt brands Activia and Shape,
yoghurt drink Actimel and Greek-style yoghurt Oykos in its portfolio. The
companys sister subsidiaries in the UK are Danone Waters (UK & Ireland) Ltd
(comprising the Evian, Volvic, Volvic Touch of Fruit, Volvic Juiced and BADOIT
brands), Danone Baby Nutrition (Cow & Gate and Aptamil) and Nutricia
Medical (specialised nutrition).
On 4th July 2013, it was announced that Danone had expanded its line of Cow
& Gate baby food in the UK with the launch of a range of 100% fruit pouches.
The pouches are available in six different varieties from Tesco, Asda and
Morrisons.
Financial Results
Danone Ltd reported turnover of 236.9m for the year ending
31st December 2012, following revenue of 240m for the previous year (ending
31st December 2011). Pre-tax profit was 24.9m in 2012 and 27.6m in 2011.
Company Structure
Greencore Group PLC is a leading international manufacturer of convenience
food. Greencore has 22 manufacturing sites in the UK and US and employs
around 11,000 people. In the UK, Greencore produces sandwiches, Italian
chilled meals, branded chilled meals, chilled non-dairy desserts, chilled sauces,
cooking sauces and pickles, and Christmas cakes. The company is comprised of
the following sectors:
Financial Results
Turnover at Greencore Group was 1.2bn for the year ending
27th September 2013, while pre-tax profit was 45.2m. In the previous year
(ending 28th September 2012), turnover was 1.16bn and pre-tax profit sat at
28.9m.
Company Structure
Kerry Foods Ltd is the consumer foods division of Republic of Ireland-based
Kerry Group. Kerry Foods Ltd operates in the UK and the Republic of Ireland,
producing own-label products for the major supermarkets and marketing its
own brands in a wide range of categories. Brands include Walls, Richmond
and Shaws, among many others.
Kerry Foods is divided into three segments Meat & Savoury, Dairy and Meal
Solutions. Kerry Foods states on its website that it is the number one supplier
of chilled, frozen and ready-to-cook ready meals in Great Britain. The company
is based in Egham in Surrey.
Parent company Kerry Group employs over 24,000 people throughout its
manufacturing, sales, technology and application centres across Europe, North
America, South America, Australia, New Zealand and Asian Markets. Kerry
Group supplies over 15,000 food, food ingredients and flavour products to
customers in more than 140 countries worldwide. It has manufacturing
facilities in 24 different countries and international sales offices in 20 others.
Financial Results
Kerry Foods Ltd reported a turnover of 678.6m and a pre-tax profit of 6.8m
in the year ending 31st December 2011. For the previous year, ending
31st December 2010, turnover was 567.9m and pre-tax profit was 24.7m.
Company Structure
Mller Dairy UK Ltd is part of the Mller UK & Ireland Group, which also
includes Robert Wiseman Dairies. These form part of the multinational
Unternehmensgruppe Theo Mller (also known as Mllermilch). The company
also owns or part owns companies in Germany and the Czech Republic. The
first Mller products were launched in the UK in 1988 and 1990. In 1991, work
began on a new production facility in Market Drayton in Shropshire. This was
extended in 1999, following the successful launch of new Mller products
during the 1990s. Further successful product launches and a 55m dairy
extension followed. Branded products include Mller Corner, MllerRice,
Mllerlight, Mller Vitality, Mller Little Stars and Mller Amore.
Financial Results
Mller Dairy (UK) Ltd posted turnover of 367.8m and a pre-tax profit of
30.8m in the year ending 31st December 2012. Turnover for the previous year
(ending 31st December 2011) was 372m, with a pre-tax profit of 36.1m.
Nestl UK Ltd
Company Structure
Nestl UK is part of the Swiss food manufacturer Nestl and has had a presence
in the UK since the 1860s. Nestl acquired the British confectioners Rowntrees
in 1988. The company now employs around 6,500 people across 20 UK sites,
including seven factories. The company is a major exporter, exporting over
260m worth of products to 50 countries each year. Sister companies in the UK
include Nestl Nutrition UK and Nestl Purina Petcare UK.
On 28th October 2013, Nestl UK and Ireland today announced that it would
reformulate its KitKat bar, reducing the products saturated fat content.
Financial Results
Nestl UK Ltd recorded turnover of 1.65bn and a pre-tax loss of 11.9m in the
year ending 31st December 2012. For the year ending 31st December 2011,
turnover was 1.61bn and pre-tax profit was 23.6m.
Company Structure
Samworth Brothers Ltd is a fourth-generation family company based in Melton
Mowbray in Leicestershire. It is comprised of 13 businesses and 8,000 people,
producing chilled foods for the British market; it numbers among the largest
UK producers of savoury pastries, producing own-label and branded chilled
food. It has production sites in Leicestershire and Cornwall. The company
produces a range of products including pies, sandwiches, cakes and desserts
for retail customers and its own brands Ginsters, Blueberry Foods, Deli Club
and Dickinson & Morris.
In January 2013, it was announced that Samworth had made a deal with
Leicester City Council to buy 50,000 square metres (m2) of greenfield land in
North Leicester, on which a new factory is planned.
Financial Results
Turnover at Samworth Brothers Ltd for the year ending 29th December 2012
was 767.2m, with the company registering a pre-tax profit of 41.4m. For the
year ending 31st December 2011, turnover was 744.5m and pre-tax profit was
43.6m.
Unilever PLC
Company Structure
Unilever manufactures a wide range of consumer products and has a global
reach. The companys UK division is based in Leatherhead. Unilevers brand
portfolio includes several well-known and internationally recognised names
including Dove, Omo, Lux, Vaseline and Bertolli, among many others.
In December 2011, Unilever sold its Culver Specialty Brands division to B&G
Foods, Inc. Also in December 2011, the company acquired 82% of Russian
beauty company Concern Kalina and acquired Ingman Ice Cream.
Financial Results
Unilever PLC recorded a turnover of 51.32bn and a pre-tax profit of 6.68bn
in the year ending 31st December 2012. Turnover for the preceding year
(ending 31st December 2011) was 46.47bn, while pre-tax profit was 6.25bn.
OTHER COMPANIES
Rachels
Rachels (formerly known as Rachels Organic) produces a range of organic
yoghurts, desserts and other dairy products. This includes Greek-style yoghurts
and rice puddings. The company is based in Aberyswyth and is owned by
Groupe Lactalis. At the time of writing, the company was offering a
limited-edition apple and cinnamon yoghurt product.
Charlie Bighams
Charlie Bighams produces premium ready meals, including pan-fry or oven
cook meals and pies. The portfolio represents a wide range of ethnic foods,
from Catalan chicken and Moussaka to Thai Green Curry. Products are available
online and from Sainsburys and Waitrose. A key offer is the Twosome range,
marketed at couples who struggle to find time to eat together in between
working and caring for children. The company was founded by the eponymous
Charlie Bigham in 1996.
OUTSIDE SUPPLIERS
Distributors
The UKs small size and good distribution infrastructure means it is usually easy
for food to travel from the manufacturer to the shop shelf within 24 hours.
Distribution may be contracted out to third parties or may be handled by
manufacturers themselves. Delivery companies may share vehicles to reduce
the number of journeys. Back hauling is also common, whereby goods may
be collected and transported directly following a delivery, so that vehicles do
not travel empty. Manufacturers are coming under increasing pressure from
both the Government and consumers to demonstrate efficient, low-carbon
transport practices.
Ingredients
Chilled foods usually use fresh ingredients and preservatives are used less than
in canned or frozen products. Products therefore tend to have fairly short shelf
lives. Products may be made with seasonal ingredients, especially in the case
of limited-edition products. Production of many products is year-round,
however, meaning that many ingredients are sourced from abroad at least
some of the time.
Packaging
Manufacturers use outside forms to provide packaging for their products.
Packaging firms play a key role, not least because the correct packaging is
essential to maintain freshness and food safety. New legislation regarding
labelling and recycling has been introduced for packaging in recent years (see
Chapter 3 Industry Background). There is particular emphasis on the
reduction of packaging considered unnecessary.
MARKETING ACTIVITY
Expenditure (000)
Table continues...
...table continued
Expenditure (000)
Total 61,033
Source: Nielsen
Table 4.2 shows data from Table 4.1 in greater detail, with expenditure broken
down by manufacturers and retailers in each product category.
Ready Meals
Total main media advertising expenditure on ready meals was 14.5m. Over a
third of this was accounted for by the 4.5m spent by Wiltshire Farms on its
product range. Marks & Spencer (M&S) spent 2.2m on its product range, while
Waitrose, Quorn, Tesco and Morrisons all spent more than 1m on advertising
their own-brand ranges. Smallest expenditures were by Nisa (92,000 on the
Heinz product range), Sainsburys (89,000 on its Chinese Takeaway range) and
Sharwoods (83,000 on its Indian Meal range).
Chilled Desserts
The G brand enjoyed the greatest expenditure, with 767,000 dedicated to
the promotion of its Chocolate Pudding product. This was followed by
Ambrosias expenditure of 553,000 on its Twin Pots and the supermarket
Morrisons expenditure of 315,000 on its desserts offer.
Fresh Soups
Expenditure on soups was divided between New Covent Garden Foods range
of soups (998,000) and Baxters fresh soup range 658,000. This made a total
of 1.7m.
Salads
Expenditure by Florette of 1.3m combined with expenditure of 289,000 by
Tesco on its salad range equalled 1.6m spent on salads.
Fresh Pizza
Total main media advertising expenditure on fresh chilled pizza was just over
1m, divided between four of the major supermarkets. ASDAs expenditure
represented more than half of the total, at 573,000, on promotion of the
retailers Chosen By You pizza range. The remainder was shared between Tesco
(229,000), M&S (110,000) and The Co-op (100,000).
Cooked Meat
Main media advertising on chilled cooked meat equalled 938,000, split
between 96,000 on Denny Ires Crumbed Ham and 842,000 on Richmonds
Cooked Ham.
Expenditure
(000)
Yogurt/Fromage Frais
Mller Mller range 10,202
Yoplait yoghurt range 9,709
Danone product range 7,668
Munch Bunch product range 2,111
Onken product range 1,988
Rachels Organic product range 1,499
Table continues...
...table continued
Expenditure
(000)
Yogurt/Fromage Frais (cont.)
Yoomoo frozen yoghurt 708
WeightWatchers Single Pot yoghurt 413
Rowan Glen product range 185
Morrisons Mller range 163
Total yogurt/fromage frais 34,646
Ready Meals
Wiltshire Farm Foods product range 4,533
Marks & Spencer product range 2,225
Waitrose product range 1,402
Quorn Chefs Selection range 1,117
Tesco product range 1,043
Morrisons M Kitchen ready meals 1,041
Unilever Bestfoods product Rangr 700
Ginsters Peppered Steak Slice 621
WeightWatchers food range 514
Aldi product range 438
Riso Gallo Risotto Pronto 301
Batchelors prepared food range 178
ASDA Food To Go range 136
Nisa Heinz product range 92
Sainsburys Chinese Takeaway range 89
Sharwoods Indian meal range 83
Total ready meals 14,511
Party/Savoury Snacks
The Co-op chilled party food 1,422
Waitrose chilled party pood range 1,057
Walls Sausage Roll 972
Table continues...
...table continued
Expenditure
(000)
Party/Savoury Snacks (cont.)
Aldi party food range 131
ASDA Extra Special Cranberry Pat 117
ASDA Extra Special Smoked Salmon Pat 113
Total party/savoury snacks 3,812
Chilled Desserts
G chocolate puddings 767
Ambrosia Twin Pots 553
Morrisons desserts 315
Nestl Ski Mousse 226
Morrisons M Kitchen Desserts 134
Lactalis chilled desserts range 109
Lactalis Yorkie chilled desserts 86
Total chilled desserts 2,190
Fresh Soups
New Covent Garden Food soup range 998
Baxters fresh soup range 658
Total fresh soups 1,657
Salads
Florette product range 1,289
Tesco salad vegetable range 289
Total salads 1,578
Fresh Pizza
ASDA Chosen By You pizza 573
Tesco Primafresco pizza 229
Marks & Spencer woodfired pizza range 110
The Co-op Stonebaked Margherita pizza 100
Table continues...
...table continued
Expenditure
(000)
Fresh Pizza (cont.)
Total fresh pizza 1,013
Cooked Meat
Richmond cooked ham 842
Denny Ire crumbed ham 96
Total cooked meat 938
Total 61,033
Source: Nielsen
The Scottish Food and Drink Federation (SFDF)/Institute of Food Science &
Technology (IFST)/Royal Environmental Health Institute of Scotland (REHIS)
Symposium has taken place every year for over a decade. The most recent
event took place on 17th May 2012 in Glasgow and featured over 90
representatives from the food and drink industry, government, regulators
and other key stakeholders.
The International Food & Drink Event (IFE) is a biennial event, with the next
scheduled to take place between 22nd and 25th March 2015, at the ExCeL
Centre in London. The show will host over 1,000 exhibitors and feature live
events and attractions.
IFEA, Africas International Food & Drink Event, launched in September 2013
in Johannesburg, South Africa. The next IFEA will take place between 5th
and 7th November 2014 at the same location.
Food & Drink Expo is an annual trade-only fair for retailers, wholesale,
distribution and importers, foodservice operators and speciality retailers, and
also for those wishing to set up a food and/or drinks business. The next Expo
is to be held at Birminghams National Exhibition Centre (NEC) from 24th to
26th March 2014.
5. Brand Strategy
INTRODUCTION
Supermarket own brands have a very strong presence in the chilled foods
industry and dominate certain sectors, notably chilled pizza, chilled desserts
and chilled ready meals. Any areas in which major brands are more prominent
are likely to have cheaper own-brand alternatives competing alongside. Some
sectors do boast a strong brand presence, however, particularly categories such
as yoghurt and ethnic chilled ready meals.
Brands have been hard hit by the recent years of economic uncertainty and
brand loyalty has slipped. Their higher price tags have placed many branded
products out of the reach of some shoppers, meaning manufacturers have had
to work hard to promote their products alongside cheaper supermarket
alternatives. Engagement in promotion via social media, such as running
competitions, is one way in which manufacturers have sought to challenge the
growing hegemony of the supermarkets own-brand offers.
COMPANIES BRANDS
Ready Meals
Many of the ready meals sold in supermarkets are the retailers own brand.
Most supermarkets have several tiers of own-brand products, ranging from
very affordable meals in a simple packaging design to luxury own-brand
meals that are generally fairly expensive. Tesco offers ranges from the cheaper
Everyday Value label to the premium Tesco finest* range, with other
own-brand products in between, such as Tescos cauliflower cheese meal.
Other supermarkets use a similar strategy; offers from Sainsburys include
Sainsburys Basics, by Sainsburys and Taste the Difference.
Own-brand ready meals regularly form part of promotions and meal deals,
giving them yet another edge over their brand-name counterparts.
The huge range of products and price tags make supermarket own brands a
force to be reckoned with, but several branded products do nevertheless
compete with the multinationals. Ethnic foods represent a significant chunk of
both value and volume sales in the ready meals sector. Chilled ready meals
brands include innocents veg pots and Levi Roots (manufactured by Kerry
Foods). There are also niche chilled brands such as the vegetarian range Quorn,
ready meals aimed at children and Heinzs WeightWatchers products, including
its premium range Taste Temptations.
Chilled Pizzas
As with ready meals, the supermarkets own-brand pizzas dominate in this
category, with the majority of chilled pizzas available from the big retailers
being own-label products. Own-brand pizzas are generally offered in the same
tier range of own-brand labels as ready meals. The main brand competing with
the supermarkets in the retail sector is Pizza Express. The Pizza Express
packaging range was redesigned in 2012 with the aim of building a single
brand identity shared by both the retail and restaurant range. Chilled pizzas
face direct competition from frozen pizzas. The WeightWatchers band also has
a pizza range.
The chilled desserts sector is more akin to the ready meals and pizza categories,
in that it is dominated by own-brand products. As with ready meals, growth in
this sector is currently being driven by supermarket promotion through meal
deals.
Chilled Meats
Chilled meats brands include Butchers Choice, Mattessons, Richmond,
Peparami and Bernard Matthews, WeightWatchers and Birds Eye. As with
other chilled food sectors, own brands have a strong presence.
Kerry Foods has launched two new ranges under its Low cheese and Mattesons
cooked meat brands, targeting adult snackers. Kerry Foods is another company
which makes use of the limited-edition strategy, adding an Italian Herb limited
edition to its Mattessons Fridge Raiders range in May 2013. In 2012, the
company extended its well-known Richmond brand.
Social Networking
Many brands make use of social networks such as Facebook and Twitter to
engage with consumers and to garner information about their buying
behaviour and shopping choices. Companies can launch competitions and
interactive games as a way of promoting their brands. This is one area where
branded products have an edge over supermarkets, as social networking
provides direct, targeted access to potential consumers.
Sponsorship
Sponsoring sports events and teams is another way for brands to gain access
to large numbers of people and to maintain a positive image. An example of
this is Danones Nation Cup, an international football competition for children
created by Groupe Danone.
STRENGTHS
The relative lack of preservatives in chilled foods means they appeal more
easily to shoppers concerned about artificial additives.
The diverse range of chilled products available means there is something for
everyone.
Many products in the chilled food sector suit people looking for convenient,
affordable meal options, either for lunch boxes or as an affordable,
enjoyable alternative to eating out.
WEAKNESSES
The sector is vulnerable to the effect of hikes in food prices and rises in input
and transport costs such as fuel and energy.
The higher prices attached to fresh, chilled foods can make it difficult for
them to compete with frozen or tinned products.
OPPORTUNITIES
Meal deal such as Marks & Spencers (M&Ss) Dine in for Two are proving
extremely popular and are likely to provide a strong base for sales of
premium own-brand ready meals and desserts for the foreseeable future.
THREATS
The high level of discounting and promotional activity has undermined value
sales and brand loyalty, while also creating expectations of relatively low
prices.
7. Buying Behaviour
CONSUMER PENETRATION
This chapter makes use of Target Group Index (TGI) data from Kantar Media.
The data concerns adults consumption of different chilled prepared foods.
Many chilled products such as ready meals, pizzas and cakes are in direct
competition with frozen and/or fresh variations. Where applicable, TGI data
for these products will be used in competition.
Ready Meals
Most ready meals are sold in chilled or frozen form (although the ambient
sector is developing). TGI data for the year ending March 2013 shows that
29.5% of adults had consumed frozen ready meals in that time period, while
28.1% had consumed chilled ready meals. Both categories were notably more
popular with women than with men. This was especially true for chilled ready
meals, which recorded 36.1% penetration for women compared with 19.6%
for men. Frozen meals were most popular with the 25 to 34 and 45 to 54
categories (34.1) and least likely to have been consumed by respondents aged
15 to 19 (10.5%). Chilled ready meals were most popular with those aged 35
to 54 (34.3%) and least popular with those in the 15 to 19 category (8.4%).
Penetration by social grade for frozen ready meals ranged from 25% in grade
B and 25.5% in A to 40.6% in grade E. Chilled ready meals varied less, from
24% in grade C2 to 32.1% in grade A. In terms of region, the highest
penetration for frozen foods was recorded in Wales (34.3%) and lowest in the
East Midlands (24.9%). Chilled ready meals were most popular in Greater
London (30.4%) and the South East (30%). These products were least popular
among respondents in the East Midlands (25.1%) and East Anglia (25.6%).
Table continues...
...table continued
Table continues...
...table continued
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
Table 7.2 shows the frequency of consumption of ready meals in the year to
March 2013. Respondents were most likely to state that they had consumed
ready meals two to three times a month, with 9.3% falling into this category.
7.6% of survey participants had consumed ready meals once a week, while
5.6% stated they had consumed these products more than once a week.
Women were more likely than men to have consumed ready meals in all
categories except more than once a week, for which penetration was almost
the same for both sexes (5.6% for women and 5.7% for men). The greatest
discrepancy was in the two to three times a month category, with 12.2%
penetration for females compared with 6.3% for men.
The highest penetration for respondents that stated they had consumed ready
meals more than once a week was recorded for the 45 to 54 age category (7.2%
penetration), among those in social grade E (7.3%) and among those living in
Wales (7.5%). The highest penetration for occasional consumption of ready
meals (less than once a month) was recorded among those aged 25 to 34
(6.4%), those in social grade A (7.9%) and respondents living in the South East
(6.7%).
By age, the highest penetration was recorded for those aged 25 to 64 in the
two to three times a month category. By social grade, the highest penetration
was recorded among those in grades C1 and E in the 2 to 3 times a month
category. The highest consumption levels by region were also recorded in the
two to three times a month column, in Scotland and the North.
Once a Month
Once a Month
Once a Week
Once a Week
2 to 3 Times
More Than
Less Than
a Month
All adults 5.6 7.6 9.3 4.6 5.4
Sex
Men 5.7 5.7 6.3 2.8 2.8
Women 5.6 9.4 12.2 6.3 8.0
Age
15-19 1.2 2.5 2.9 1.5 2.2
20-24 3.8 5.8 6.7 3.3 4.6
25-34 6.1 7.8 10.6 4.8 6.4
35-44 6.7 8.9 10.7 5.7 6.1
45-54 7.2 9.4 10.9 5.1 5.6
55-64 6.3 7.9 10.1 5.1 6.3
65+ 5.0 7.1 8.7 4.6 4.9
Social Grade
A 5.3 8.1 8.5 3.9 7.9
B 5.7 6.9 9.1 5.3 6.9
C1 5.2 7.5 10.2 4.6 6.3
C2 5.3 7.8 7.7 4.3 3.9
D 6.0 7.4 9.9 4.4 3.9
E 7.3 8.6 10.1 4.6 4.6
Region
Scotland 6.3 7.4 11.8 4.8 3.9
North West 5.5 8.8 8.5 5.0 5.3
North 4.7 8.4 10.1 5.6 3.3
Yorkshire and Humberside 4.9 7.5 8.7 5.2 4.7
East Midlands 4.3 6.1 9.0 3.8 5.5
East Anglia 4.4 9.0 7.2 3.8 5.8
South East 5.7 7.6 9.1 4.6 6.7
Table continues...
...table continued
Once a Month
Once a Month
Once a Week
Once a Week
2 to 3 Times
More Than
Less Than
a Month
Region (cont.)
Greater London 6.6 7.9 9.8 4.2 5.7
South West 4.6 7.4 9.2 5.0 5.1
Wales 7.5 5.9 9.5 3.5 6.3
West Midlands 6.5 6.8 8.6 4.8 5.6
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
Table 7.3 shows data for the consumption of chilled and frozen ready meals of
different types. It shows that traditional British meals were the most popular
(21.1% of respondents had consumed these in the year to March). These were
followed by pasta meals (18.3%) and Indian ready meals (17.8%). French meals
were the least popular (1% penetration). The most popular meals among men
were British meals (16.8%) and Indian meals (14.5%). The same types were the
most popular among women but penetration was higher at 25.3% for
British meals and 20.9% for Indian.
Traditional British meals were most popular with the 65 and over category
(25.8%), while pasta was most likely to have been consumed by respondents
aged 35 to 44 (23.5%). Indian meals were most popular with the 45 to 54
category (24.5%). By social grade, penetration for British meals and pasta was
highest among those in grade E (28.1% and 20.2%, respectively), while Indian
meals were most popular among those in grades B and C1 (19.9% and 19.7%,
respectively). In terms of region, British meals were most likely to be consumed
by those living in Wales (24.9%); pasta by respondents in the North West
(19.9%); and Indian meals by people living in Scotland (19.2%).
Vegetarian Meals
Mexican/Tex Mex
British Meals
Other Italian
Traditional
Chinese
French
Others
Indian
Pasta
Thai
All adults 21.1 18.3 17.8 14.5 6.2 5.5 3.4 2.7 1.0 5.3
Sex
Men 16.8 12.3 14.5 11.4 4.9 3.0 2.8 2.5 0.9 3.9
Women 25.3 24.0 20.9 17.5 7.5 7.9 4.1 2.9 1.0 6.6
Age
15-19 6.9 6.1 5.6 4.6 1.8 1.9 2.1 0.4 0.2 1.2
20-24 16.1 16.2 14.0 11.0 5.7 4.0 1.4 1.2 0.8 5.1
25-34 22.5 22.1 19.9 15.6 7.4 6.2 5.7 3.0 1.7 7.0
35-44 20.9 23.5 21.8 17.4 7.7 6.0 5.5 4.4 1.3 5.6
45-54 22.0 22.0 24.5 18.3 7.3 7.4 4.6 3.4 0.8 6.2
55-64 22.4 18.9 19.9 16.0 6.5 6.1 2.7 3.1 1.1 4.9
65+ 25.8 13.3 12.0 12.3 4.8 4.5 0.9 1.8 0.5 4.9
Social Grade
A 19.4 17.8 18.4 14.1 7.0 6.6 3.2 3.8 1.9 4.5
B 18.7 17.7 19.9 14.3 7.0 6.7 3.4 3.7 1.4 4.5
C1 20.9 19.7 19.7 15.3 6.2 5.8 4.0 3.2 0.8 4.3
C2 20.5 16.8 15.2 12.9 5.8 4.2 3.3 1.6 0.6 4.9
D 22.3 18.0 15.2 13.9 5.2 4.9 2.7 1.9 0.9 6.9
E 28.1 20.2 16.9 18.1 6.7 5.3 3.5 1.9 1.0 8.9
Region
Scotland 23.2 21.1 19.2 17.4 7.1 4.7 4.1 3.2 0.5 5.7
North West 21.1 19.9 17.2 15.0 7.2 4.5 4.2 2.5 1.0 5.1
North 22.5 18.2 18.1 17.2 4.4 4.2 2.6 2.5 0.5 4.8
Yorkshire and
Humberside 20.3 17.3 16.7 14.5 4.6 5.7 3.2 2.7 0.5 5.0
East Midlands 18.4 13.8 16.5 12.8 6.0 4.8 3.3 1.7 0.7 4.2
Table continues...
...table continued
Vegetarian Meals
Mexican/Tex Mex
British Meals
Other Italian
Traditional
Chinese
French
Others
Indian
Pasta
Thai
Region (cont.)
East Anglia 22.1 15.4 16.3 13.1 5.2 5.4 3.4 1.9 0.2 3.9
South East 21.1 18.8 18.4 14.0 7.2 5.9 3.5 3.3 1.1 5.1
Greater London 18.9 18.6 18.9 12.9 6.9 6.8 3.2 2.9 1.4 8.2
South West 21.8 18.7 16.2 14.5 5.2 5.4 3.7 2.7 1.5 3.8
Wales 24.9 18.0 17.6 15.0 6.7 6.1 2.8 1.3 0.9 7.1
West Midlands 21.7 18.4 18.2 15.0 5.0 5.6 3.2 3.1 1.4 4.0
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
Pizza
Table 7.4 indicates that frozen pizza was more popular among respondents
than fresh or chilled pizza, with 30.2% of respondents stating they had
consumed frozen pizza compared with 26.3% that had consumed chilled. Both
were more popular with men than with women, with the greatest discrepancy
shown for chilled pizzas (33.8% of women compared with 18.6% of men). By
age, chilled pizzas were most popular with those in the 25 to 34 and 35 to 44
categories (35.4% and 36.5%, respectively), while the lowest penetration was
recorded at 9.9% among those aged 15 to 19. Frozen pizzas were also most
popular among those in the 25 to 34 and 35 to 44 categories (40.5% and 40.2%,
respectively) and again, the lowest penetration was at 12.8% for the 15 to 19
age group.
By social grade, chilled pizzas were most popular among social grade B (31.2%),
with penetration also high among those in grades A and C1 (both 28.4%) and
least popular among those in grades C2, D and E. Frozen pizzas were most
popular among respondents in social grade E (36.5%) and least likely to have
been consumed by those in grade A (25.6%). Regionally, chilled pizzas were
most popular among people living in Scotland, East Anglia and the South East
and least popular among respondents living in Wales. For frozen pizzas,
penetration was highest among those living in Yorkshire and Humberside and
lowest among those living in the North West, the South East and the East
Midlands.
Frozen Fresh/Chilled
Table continues...
...table continued
Frozen Fresh/Chilled
Region
Scotland 31.1 28.3
North West 29.5 26.4
North 32.3 25.6
Yorkshire and Humberside 34.4 26.7
East Midlands 28.9 23.4
East Anglia 31.9 28.3
South East 28.0 28.7
Greater London 29.2 24.9
South West 29.8 26.4
Wales 31.9 23.0
West Midlands 31.3 24.9
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
By social grade, penetration was highest for pasta dishes among those in social
grade D (18%) and lowest in grades A and B (13.5% and 13.6%, respectively).
Chilled salads were most popular among those in grade A (34.1%) and lowest
in grades D and E (24.5% and 24.4%). For other chilled snack meals,
penetration was highest among those in grade D (10%) and lowest among
those in grade B (5.5%). Highest penetration for chilled pasta dishes in terms
of region was 17.5% in Greater London, while this category was least popular
among those living in the North (13.9%) and the West Midlands (13.5%). For
chilled salads, the highest penetration was recorded among those living in
Yorkshire and Humberside, Greater London and Wales, while the lowest
penetration was recorded among those living in the East Midlands. Chilled
snacks were most popular among those living in the South East (9.4%) and least
likely to have been consumed among those living in the South West (5.8%).
Other
Salads Pasta Dishes Chilled
(chilled) (chilled) Snack Meals
Table continues...
...table continued
Other
Salads Pasta Dishes Chilled
(chilled) (chilled) Snack Meals
Social Grade (cont.)
E 24.4 16.8 9.4
Region
Scotland 26.1 16.9 9.1
North West 25.8 16.9 7.2
North 25.9 13.9 7.6
Yorkshire and Humberside 27.3 15.3 7.3
East Midlands 24.7 13.8 7.0
East Anglia 25.5 14.0 5.9
South East 25.9 15.6 9.4
Greater London 27.8 17.5 8.4
South West 25.7 14.2 5.8
Wales 27.1 16.2 6.3
West Midlands 26.2 13.5 7.3
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
Yoghurts
Table 7.6 shows consumption of yoghurt and fromage frais. 69.5% of adults
stated that they had consumed these products in the year to March 2013, with
77.7% of women and 61% of men responding affirmatively. The highest
penetration by age was recorded among those aged 25 to 34 (73.5%), while
the lowest penetration was reported among those aged 15 to 19 and 20 to 24
(both 62.1%). Yoghurts and fromage frais were more popular among those in
social grades A, B and C1 than among respondents in grades C2, D and E. In
terms of region, the highest penetration was recorded among those living in
East Anglia (72.2%) and the lowest was found among those living in Greater
London (66.1%).
Yoghurts and
Fromage Frais
Table continues...
...table continued
Yoghurts and
Fromage Frais
Region (cont.)
Greater London 66.1
South West 71.8
Wales 71.6
West Midlands 67.5
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
Table 7.7 shows frequency of consumption for yoghurt in the year to March
2013. Respondents were most likely to state they had eaten yoghurt two to
three times a week (23.5%) or once a day (16.5%). The lowest penetration was
3.1% in the more than once a day category. For all frequency categories,
women were more likely than men to state that they had consumed yoghurt
in the past year. By age, those in the 35 to 44, 45 to 54 and 55 to 64 categories
were more likely than others to consume yoghurt frequently.
By social grade, yoghurt was most likely to be consumed more than once a day
by those in grade E (3.4%) and once a day by those in grade A (19%).
Respondents in grade B were the most likely to state that they consumed
yoghurt two or three times a week (25.1%). By region, the highest penetration
for high frequency of consumption was recorded among those in the South
West for more than once a day (4.6%) and among those in East Anglia (21.6%)
for once a day. The region most likely to fall into the lowest frequency category
(less than once a month) was East Anglia (7.4%).
Once a Month
Once a Month
Once a Week
2 or 3 Times
2 or 3 Times
Once a Day
Once a Day
More Than
Less Than
a Month
a Week
All adults 3.1 16.5 23.5 7.1 9.8 3.4 5.1
Sex
Men 1.6 12.7 20.9 7.5 8.9 3.6 5.0
Women 4.5 20.1 26.0 6.8 10.7 3.1 5.1
Age
15-19 2.1 8.6 18.2 9.1 12.4 5.8 4.1
20-24 1.8 9.1 18.4 9.3 11.7 3.8 7.4
25-34 4.0 15.7 23.0 8.0 11.5 4.8 5.6
35-44 3.5 16.4 25.4 7.3 10.7 3.1 5.2
45-54 3.3 18.5 25.9 7.0 10.0 2.4 4.6
55-64 2.9 18.2 24.6 5.9 8.2 2.9 4.7
65+ 2.8 20.2 23.6 5.9 7.2 2.5 4.5
Social Grade
A 3.2 19.0 24.0 6.8 9.1 4.7 4.5
B 2.8 17.7 25.1 8.1 10.5 3.0 4.6
C1 3.2 16.6 24.1 7.2 10.6 3.8 5.9
C2 3.2 17.1 23.1 6.4 9.6 3.0 4.9
D 3.0 14.5 22.0 6.9 8.3 3.5 4.8
E 3.4 13.9 21.2 6.9 9.6 2.9 4.8
Region
Scotland 2.7 15.4 24.1 6.6 10.5 3.8 4.7
North West 3.6 15.7 26.0 6.3 8.8 3.0 4.6
North 2.9 19.0 24.8 5.9 8.9 2.8 3.9
Yorkshire and
Humberside 3.0 17.2 27.1 5.9 10.6 1.9 4.2
East Midlands 3.6 16.0 24.9 6.8 9.7 2.8 5.1
East Anglia 1.6 21.6 25.0 5.5 8.6 2.0 7.4
Table continues...
...table continued
Once a Month
Once a Month
Once a Week
2 or 3 Times
2 or 3 Times
Once a Day
Once a Day
More Than
Less Than
a Month
a Week
Region (cont.)
South East 2.8 17.0 22.6 8.2 9.6 3.9 5.5
Greater London 2.8 12.3 22.2 8.1 10.0 4.0 4.9
South West 4.6 17.9 22.6 6.2 10.3 4.0 5.2
Wales 2.6 18.6 22.8 7.9 10.8 4.1 3.6
West Midlands 2.9 16.9 18.8 8.5 10.3 2.9 6.3
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
Frozen cakes were more popular among younger respondents, while those in
the 55 to 64 and 65 and over groups were less likely than average to have
consumed frozen cakes. Chilled cakes were most popular among respondents
aged 25 to 34 (51.9%) and least popular with people in the 65 and over
category (31%). Fresh cakes were most popular among those in the 25 to 34
category, with penetration of 72.2%; and lowest, again, among those in the
65 and over category (62.9%).
By region, frozen cakes were most popular among respondents in the North
and Wales (both 44.8%), with the lowest penetration occurring among those
in Greater London (37.2%). The highest penetration for chilled cakes was
recorded among those in the North West (46.6%), while these products
appeared to be least popular among those in Greater London (40.9%). Fresh
cakes were most popular among those in East Anglia (71.8%) and least popular
among those in Greater London (65.4%).
Fresh or
Frozen Chilled Packeted
Table continues...
...table continued
Fresh or
Frozen Chilled Packeted
Region (cont.)
Greater London 37.2 40.9 65.4
South West 38.4 43.9 69.1
Wales 44.8 45.1 69.8
West Midlands 40.4 42.1 67.9
Source: Target Group Index (TGI) Kantar Media, Q3 (April 2012-March 2013)
2013
8. Current Issues
HEALTH
Many products that make up the chilled foods sector (although by no means
all) contain high levels of either salt, sugar, saturated fat, preservatives,
colourings or additives, or a combination of these. High consumption of these
substances is associated with major health issues such as diabetes and obesity,
which place a significant burden on the National Health Service (NHS). Obesity
alone is thought to cost the NHS over 5bn per year in treatment and specialist
equipment.
Nestl, Unilever, Tesco, Sainsburys and Morrisons are among those that have
adopted the pledge.
On 5th January 2013, Shadow Health Secretary Andy Burnham was reported
by the BBC as saying that voluntary agreements to reduce obesity and related
health problems were not working. Mr Burnham questioned whether legal
limits should not be introduced to limit fat, sugar and salt in foods, particularly
in foods aimed predominantly at children. In the same article, Health Secretary
Jeremy Hunt was quoted as saying that the PHRD has led to significant
reductions in salt, sugar and fat contained in supermarket foods. He stated
that the Government reserves the right to legislate if retailers and
manufacturers did not make sufficient progress in lowering the salt and sugar
content of their products.
As a result, more people have started to ask more questions about the
provenance of cheap meat, which has had an effect on some chilled food
categories. The scandal is thought to have prompted many people to become
vegetarian or to change the source of their meat and is likely to have boosted
sales of organic meat, the origins of which tend to be more transparent. While
this scandal may have affected sales of some chilled foods, it is likely to have
benefited those that were sure to have been untouched by the horsemeat
affair.
OWN-BRAND DOMINANCE
According to the website of the Chilled Food Association (CFA), an estimated
99% of UK chilled foods are sold under retailers own labels. Their dominance
is instantly apparent upon any visit to a supermarkets store or webpage, with
some categories almost completely made up of own-brand offers. The success
of dine in deals, whereby costumers can buy a two-course meal for two people
with a bottle of wine, has further cemented the own-brands grip on the sector.
Own brands offer a wide range of choices to consumers, from products for a
tight budget to premium, high-quality offers. Own brands are now able to
compete directly with branded products, a situation which has undermined
brand loyalty for some time. Many consumers turned to own brands as the
recession hit, and now see little reason to go back to their old choices, whatever
their current financial situation.
TECHNOLOGY
Any food product sold as organic falls under Commission Regulation (EU) No
271/2010. Organic produce must be produced in accordance with these
regulations and inspected and certified by a registered certification body such
as the Soil Association (SA). For foods to earn the label organic, at least 95%
of ingredients must come from organically produced plants and animals and
artificial fertilisers cannot have been used in the farming process.
Free-from products, such as gluten- and dairy-free products, are also expected
to grow. These already enjoy a more central presence on supermarket shelves
and the range of products available is growing steadily. Much-improved
quality and palatability has also helped boost sales in this sector and its
products are becoming increasingly mainstream. Even smaller local
supermarkets now stock a relatively good range of free-from products. The
supermarkets have not neglected the chance to gain a strong stake in this
sector by developing their own free-from ranges (as they have in the organic
sector also). While free-from products represent a very small amount of overall
chilled foods sales, this proportion is expected to grow in the future.
Rising energy prices pose a problem to both manufacturers and consumers. The
former is limited in the extent to which it can pass on such costs to the latter,
who need to meet energy bills before spending money on luxury items such as
chilled desserts. This is particularly true in the current context of economic
difficulty and rising living costs, and in a market where brand loyalty is
threatened by a vast range of competing products.
CORPORATE ACTIVITY
In August 2013, it was reported that the European Commission had approved
a management buyout (MBO) of Crediton Dairy from Arla by two former
Milk Link executives.
Also in August 2013, Arla Fioods announced proposals to close its dairy and
distribution centre at Ashby-de-la-Zouch. The closure is planned for April
2014 and could result in the loss of up to 370 jobs.
Arla announced on 30th August 2013 that the Arla Foods AmbA Board of
Directors and the board of Milk Partnership Ltd (Arla Foods Milk Partnerships
[AFMPs] investment company, of which all AFMP farmers are members) had
made proposals for co-ownership. This would see a further 1,600 British dairy
farmers become co-owners of Arla Foods.
At the same time, the boards of Arla Milk Link and Arla Foods announced
changes to the Arla Milk Link merger conditions.
Bernard Matthews has dropped the Farms element from marketing, with
the companys farming credentials now expressed through new farmgate
imagery on product packaging.
Bernard Matthews launched two new cooked meats Wafer Thin Turkey
Curry Chunks and Hickory Smoked Turkey Breast Slices.
Cranswick PLC
In July 2013, Cranswick announced that underlying turnover in the 3 months
to 30th June 2013 was 10% ahead of the same period in the preceding year,
following the acquisitions of Kingston Foods and East Anglian Pigs Ltd.
Danone
Production of Danones Danio Greek-style yoghurts has been shifted from
Poland to France and the packaging has been redesigned. The changes came
after Danone was forced to change Danio packs to remove the descriptor
Greek yoghurt, after Total Greek Yoghurt owner Fage took out a court
injunction.
On 4th July 2013, it was announced that Danone had expanded its line of
Cow & Gate baby food in the UK with the launch of a range of 100% fruit
pouches. The pouches are available in six different varieties from Tesco, ASDA
and Morrisons.
Kerry Foods
Kerry Foods has launched two new ranges under its Low cheese and
Mattessons cooked meat brands, targeting adult snackers.
Kerry Foods added an Italian Herb limited edition to its Mattessons Fridge
Raiders range in May 2013.
Nestl UK Ltd
On 19th June 2013, the company announced it was adopting a new nutrition
labelling scheme, the latest food pledge in the Governments PHRD.
Spar
Spar has launched a new range of Winter Warmers chilled products and has
redesigned 21 existing own-brand lines.
LEGISLATIVE CHANGES
The new EU Regulation 1169/2011 on the provision of food information to
consumers combines two Directives (2000/13/EC labelling, presentation
and advertising of foodstuffs and 90/496/EEC nutrition labelling for
foodstuffs) and will apply from 13th December 2014. The obligation to
provide nutrition information will apply from 13th December 2016.
Further information regarding current food labelling and other legislation can
be found in Chapter 3 Industry Background.
ENVIRONMENT
Apart from the impact of Government initiatives and regulations,
manufacturers are also under pressure from consumers and environmental
groups to develop greener practices and to provide fully recyclable packaging.
Packaging
The UK has a statutory producer responsibility regime for packaging. This
places a legal obligation on businesses that make or use packaging to ensure
that a proportion of it is recovered and recycled. In March 2012, new packaging
targets for businesses for the period from 2013 to 2017 were announced as
part of the Budget. These should ensure that the UK meets EU Directive targets.
In July 2013, the Government published Draft Guidance Notes for the
Packaging (Essential Requirements) Regulations. These Regulations require by
law that the person responsible for packaging or filling products into
packaging or importing packed or filled packaging into the UK may only place
that packaging on the market if it fulfils the Essential Requirements and is
within the heavy metal concentration limits.
WRAP
WRAP is a Government-funded initiative set up in 2000 to boost UK recycling
and to create a market for recycled materials. WRAP established its first
voluntary Courtauld Commitment in 2005, with the aim of improving resource
efficiency and reducing waste within the UK grocery sector. WRAP works in
partnership with retailers, brand owners, manufacturers and suppliers who
sign up voluntarily to support the delivery of targets.
OVERVIEW
The global chilled foods sector is a multi-billion pound industry. There are
several multinational companies operating in the global chilled foods market.
Key players include Brasil Foods SA, Kraft Foods Group Inc, Sara Lee Corp, Tyson
Foods Inc, Unilever and Nestl, to name just a few. These have a global reach,
with many operating in countries across the globe.
THE US
According to a press release published by the website Companies & Markets,
retail volume sales within the US chilled foods market increased by 1% in 2012,
while retail value sales (at current prices) increased by 2%. This took the total
sales value to $28.8bn (approximately 18.1bn). The largest US companies in
the sector are Kraft Foods and Sara Lee. Research conducted by Companies &
Markets found that chilled pizza was the fastest growing category. Both
volume and value sales are expected to grow in the US over the coming years.
MAJOR TRENDS
Global trends mirror many of the UK trends discussed in Chapter 1 Market
Definition. These include the role played by the growing demand for easy,
convenient foods as more and more people find themselves time-poorer but
money-richer. In many markets, people are starting to favour chilled foods,
perceived to be fresher and healthier, over frozen products. Own brands
dominate in many countries chilled food sectors, particularly in the US, where
economic crises have meant that many people feel they can no longer justify
expenditure on brands. Online shopping for fresh, chilled products is expected
to grow in the US and Europe, linked to the growing demand for locally
produced, farmgate products.
10. Forecasts
INTRODUCTION
The chilled foods category as a whole covers a vast range or products and
prices, meaning there is something for almost every budget and preference.
The necessity to eat means that food categories are, by definition, more stable
than some other sectors. Although certain lines, products or price ranges may
suffer more than others during periods of economic trouble, the chilled foods
sector as a whole is sound. Unexpected issues such as the horsemeat scandal
(see Chapter 8 Current Issues) are perhaps more threatening to the sector
as a whole than economic crises.
Despite this, living costs in the UK are high and rising faster than wages. The
economic climates of both the UK and Europe remain uncertain. Many
shoppers feel the need, perceived or real, to spend carefully. This could support
sales of chilled products such as ready meals and pizza, as consumers may
choose these rather than eating out.
UK resident population
(000) 63,758 64,271 64,776 65,271 65,755
GDP growth (%) 1.3 2.2 2.4 2.4 2.3
Inflation (%) 3.1 3.1 3.1 3.3 3.5
Unemployment (million) 1.50 1.39 1.26 1.21 1.15
Table continues...
...table continued
Chilled quiches/flans/defined
fresh meat and pastries 790 808 830 855 882
Sandwiches, rolls, baguettes and
wraps 545 595 624 663 706
Chilled pizza 460 496 523 554 588
Fresh soup 118 122 124 127 129
Others 1,248 1,319 1,398 1,485 1,580
2,500
0
2014 2015 2016 2017 2018
Note: value-added seafood, etc. includes poultry, chilled prepared fish, chilled smoked
fish; chilled quiches, etc. includes flans/defined fresh meat and pastries; sandwiches, etc.
includes rolls, baguettes and wraps.
Yoghurts and yoghurt drinks (m) 1,815 1,921 2,050 2,177 2,334
% change year-on-year 3.1 5.8 6.7 6.2 7.2
2,400
2,300
2,200
2,100
2,000
1,900
1,800
1,700
2014 2015 2016 2017 2018
2,100
2,000
1,900
1,800
1,700
1,600
1,500
1,400
2014 2015 2016 2017 2018
Chilled cakes and desserts (m) 1,101 1,165 1,209 1,259 1,313
% change year-on-year 2.4 5.8 3.8 4.1 4.3
1,350
1,300
1,250
1,200
1,150
1,100
1,050
1,000
2014 2015 2016 2017 2018
Chilled Salads
Key Note forecasts that the value of the chilled salads category will increase
year-on-year, with the rate of growth peaking in 2015, dropping the following
year and then increasing. The sector is expected to grow by 31.7% during the
forecast period, to reach 1.29bn. The ongoing rise in the number of people
interested in healthy eating is expected to contribute to this growth.
1,350
1,300
1,250
1,200
1,150
1,100
1,050
1,000
950
900
2014 2015 2016 2017 2018
Chilled quiches/flans/defined
fresh meat and pastries (m) 790 808 830 855 882
% change year-on-year 2.1 2.3 2.7 3.0 3.2
925
900
875
850
825
800
775
750
2014 2015 2016 2017 2018
Chilled Pizza
Growth of 6.1% in 2018 is expected to take the chilled pizza category to an
estimated 588m. Total growth over the forecast period is therefore expected
to be 27.8%. More modest growth is predicted for this sector than for ready
meals, because although the same socio-economic factors are expected to
boost sales, consumer perceptions that pizzas are less healthy may somewhat
hold back purchases of these products.
600
575
550
525
500
475
450
Fresh Soup
Growth in the fresh soups sector is expected to remain positive, but the rate
of growth may drop later in the review period. This reflects the possibility of
market saturation restricting sales growth. Total sector value is expected to be
129m in 2018, following growth of 9.3% since 2014.
135
130
125
120
115
110
2014 2015 2016 2017 2018
Others
Table 10.13 shows Key Notes forecasts for the others category of chilled food
products. The sector is expected to grow by 26.7%, from 1.2bn in 2014 to
1.58m in 2018. The rate of growth is expected to increase year-on-year.
1,600
1,550
1,500
1,450
1,400
1,350
1,300
1,250
1,200
2014 2015 2016 2017 2018
MARKET GROWTH
Key Note estimates that total market growth between 2009 and 2018 will be
53.6%, from 10.19bn to 16.54bn.
17,000
16,000
15,000
14,000
13,000
12,000
11,000
10,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Note: 2010 and 2011 data have been revised by Kantar since the previous edition of this
Key Note report, owing to a change in Kantars methodology; 2009 represents 52 weeks
ending 27th December 2009; 2010 represents 52 weeks ending 26th December 2010;
2011 represents 52 weeks ending 25th December 2011; 2012 represents 52 weeks
ending 23rd December 2012; 2013 represents 52 weeks ending 25th December 2013;
2013 to 2018 figures are Key Note estimates.
FUTURE TRENDS
Health Issues
Health issues are expected to continue to shape new product development
(NPD). Changing consumer buying behaviour, pressure from health
organisations such as the British Heart Foundation (BHF [see Chapter 8
Current Issues]) and the possibility of new legislation are all expected to affect
the industry over the next few years. The industry has already responded well,
with recent years seeing a wealth of light products. These have proved
extremely popular. Although health issues are almost certain to shape the
future of the industry, they are not expected to undermine overall sales.
their principal activities are so varied that their results are not considered
applicable to the survey
DEFINITIONS
A company which has a Y consolidated value has filed consolidated accounts
for the relevant year.
denotes that the growth rate calculation is invalid, because the figures
either move from positive to negative or from negative to positive.
Turnover (Sales)
This includes all income derived from the principal activities of the firm, net of
VAT. It encompasses UK sales, exports and overseas and intercompany sales.
Pre-Tax Profit
The net trading profit figure after deduction of all operating expenses,
including depreciation and finance charges but before deduction of tax,
dividends, subventions or group relief, and other appropriations. Where
applicable, it will include the share of profits and losses of associated
companies. Items described by the company as exceptional are included;
extraordinary items are excluded.
Profit Margin
Pre-tax profit expressed as a percentage of sales.
Average Remuneration
Total employee remuneration divided by the number of employees.
FURTHER INFORMATION
For more detailed financial information telephone Key Note on: 0845-504
0452.
Principal Activities
SIC Code
Structure
Arla Foods Ltd is a subsidiary of Arla Foods AmbA of Denmark. The company supplies fresh dairy
products to major retailers and foodservice customers, making 4,000 deliveries to stores and
regional distribution centres each day.
Brand Information
Arla Foods UKs brands include Cravendale, Anchor, Lurpak and Tickler.
Recent Developments
It was announced on 4th October 2013 that Arla Foods will introduce the Unika line of artisanal
cheeses in the US. In September 2013, it was announced that Wieden + Kennedy London had
been handed the global advertising account for Arla-branded dairy products. In August 2013,
it was reported that the European Commission had approved a management buyout (MBO) of
Crediton Dairy from Arla by two former Milk Link executives. Also in August 2013, Arla Foods
announced proposals to close its dairy and distribution centre at Ashby-de-la-Zouch, with the
aim of transferring milk processing to Buckinghamshire.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
Principal Activities
A group engaged in the production and marketing of turkey and other meat products,
oven-ready turkeys, day-old turkeys, fish products, pastries, sandwiches and other poultry
products.
SIC Codes
Structure
Bernard Matthews Holdings Ltd is the largest turkey farmer and producer of turkey products
in the UK, supplying pubs, restaurants and many of the major grocery retailers and foodservice
providers, as well as employing over 3,000 people. The company focuses on promoting turkey
as a healthy option and has recruited celebrity chef Marco Pierre White to promote its products.
Brand Information
The company supplies a range of products made in the form of cooked meats and frozen and
fresh breaded poultry under the brand Bernard Matthews Farms Ltd.
Recent Developments
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
CRANSWICK PLC
Principal Activities
A group engaged in the production and supply of pork-based products, including fresh pork,
sausages, charcuterie, cooked meats, ham packs for sandwiches, and dry cured bacon.
SIC Codes
Structure
Cranswick supplies a range of fresh pork, gourmet sausages, premium cooked meats, traditional
air-dried bacon, charcuterie, pastry products and sandwiches from a number of production
facilities in the UK. Fresh and processed food is supplied to UK retail, food manufacturing and
foodservice operators.
Brand Information
Brands include Bodega, WeightWatchers, Woodalls, Simply Sausages, Red Lion Foods and The
Black Farmer.
Recent Developments
Cranswick has secured supplies of Scottish pork through Dunbia Elgin, an abattoir and
de-boning operation in the north east of Scotland. Slaughter throughput has been increased
to provide products to all of ASDAs 57 Scottish stores. In April 2013, Cranswick announced that
it had taken over East Anglian Pigs Ltd, a breeding, rearing and finishing business. In July 2013,
Cranswick bought Milton Keynes-based premium cooked and roast meat producer Kingston
Foods for an undisclosed sum.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
DANONE LTD
Principal Activities
SIC Code
51330, Wholesale of dairy produce, eggs and edible oils and fats.
Structure
Danone Ltd is one of four UK subsidiaries of France-based Group Danone SA. The company has
three sister subsidiaries in the UK, Danone Waters (UK & Ireland) Ltd, Danone Baby Nutrition
(Cow & Gate and Aptamil) and Nutricia Medical (specialised nutrition). Danone UK Ltd was
officially created in 1990 as a branch of Danone Belgium, coming to the UK as a company in its
own right in 1999.
Brand Information
Brands include Activia and Shape, yoghurt drink Actimel and Greek-style yoghurt Oykos.
Recent Developments
Production of Danones Danio Greek-style yoghurts has been shifted from Poland to France and
packaging has been redesigned. The changes came after Danone was forced to change Danio
packs to remove the descriptor Greek yoghurt, after Total Greek Yoghurt owner Fage took
out a court injunction. The product was renamed strained yoghurt. Danio will be launched in
France in 2014. On 4th July 2013, it was announced that Danone had expanded its line of Cow
& Gate baby food in the UK with the launch of a range of 100% fruit pouches. The pouches are
available in six different varieties from Tesco, ASDA and Morrisons.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
Principal Activities
SIC Code
Structure
Kerry Foods Ltd operates in the UK and the Republic of Ireland, producing own-label products
for the major supermarkets and marketing its own brands in a wide range of categories. Kerry
Foods is divided into three segments Meat & Savoury, Dairy, and Meal Solutions. Kerry Foods
states on its website that it is the number one supplier of chilled, frozen and ready-to-cook
ready meals in Great Britain. The company is based in Egham in Surrey.
Brand Information
Recent Developments
Kerry Foods has launched two new ranges under its Low cheese and Mattessons cooked meat
brands, targeting adult snackers. The company added an Italian Herb limited edition to its
Mattessons Fridge Raiders range in May 2013, while in 2012 the company extended its Richmond
range.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
None
Principal Activities
SIC Code
51330, Wholesale of dairy produce, eggs and edible oils and fats.
Structure
Mller Dairy UK Ltd is part of the Mller UK & Ireland Group, which also includes Robert
Wiseman dairies. These form part of the multinational Unternehmensgruppe Theo Mller (also
known as Mllermilch).
Brand Information
Branded products include Mller Corner, Mller Rice, Mllerlight, Vitality, Little Stars and
Amore. The Mller brand name appears on the packaging of the latter three.
Recent Developments
Mller Dairy UK announced plans to invest 17m in a new butter manufacturing plant at its
Market Drayton site. Unternehmensgruppe Theo Mller and PepsiCo Inc announced a joint
venture in the US in September 2012, launching Mller products in the US which had previously
been unavailable.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
NESTL UK LTD
Principal Activities
The manufacture and sale of food and drink products and associated activities.
SIC Codes
Structure
Nestl UK is part of Swiss food manufacturer Nestl and has had a presence in the UK since the
1860s. The company employs around 6,500 people across 20 UK sites, including seven factories.
The company is a major exporter, exporting over 260m worth of products to 50 countries each
year. Sister companies in the UK include Nestl Nutrition UK and Nestl Purina Petcare UK.
Brand Information
Nestl brands include KitKat, Carnation, Nescaf, Nestl Shredded Wheat, Nesquik, Herta and
Maggi.
Recent Developments
On 19th June 2013, Nestl announced it was adopting a new nutrition labelling scheme, the
latest food pledge in the Governments Public Health Responsibility Deal (PHRD). On
28th October 2013, Nestl UK and Ireland announced that it was planning to reformulate its
KitKat bar, reducing the products saturated fat content.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
Principal Activities
SIC Code
Structure
Brand Information
Samworth Brothers brands include Ginsters, Deli Club and Dickinson & Morris.
Recent Developments
In December 2012, the company announced the launch of a new business unit, an own-label
producer called Brooksby Foods. In July 2013, it was announced that Samworth Brothers
planned to expand the new unit, by opening a second facility as part of an investment of over
10m in Brooksby Foods. In January 2013, it was announced that Samworth had made a deal
with Leicester City Council to buy 50,000 square metres (m2) of greenfield land in North
Leicester, on which a new factory is planned.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
UNILEVER PLC
None
Principal Activities
A group engaged in the manufacture and supply of savoury dressings and spreads, personal
care products, ice cream and tea-based beverages and home care and cleaning products.
SIC Codes
Structure
Unilever manufactures a wide range of consumer products and has a global reach. Its products
are sold in over 190 countries, with emerging markets accounting for over half of the companys
business. The company employs over 173,000 people.
Brand Information
Unilevers brand portfolio includes several well-known and internationally recognised names
including Dove, Omo, Lux, Vaseline and Bertolli, among many others.
Recent Developments
In January 2013, Unilever announced it had signed a deal to sell its global Skippy business to
Hormel Foods, for a cash consideration of approximately $700m.
FINANCIAL PROFILE
Sales
Profits
Employees
Balance Sheet/Ratios
Associations
British Heart Foundation Chilled Foods Association
http://www.bhf.org.uk http://www.chilledfood.org
Publications
Companies and Markets The Guardian
http:// http://www.theguardian.com
www.companiesandmarkets.com
Just-Food
The Economist http://www.just-food.com
http://www.economist.com
The Grocer
http://
www.the.grocer.magazine.co.uk
Government Sources
Department of Health
https://www.gov.uk/government/ National Statistics
organisations/department-of-health http://www.statistics.gov.uk
Consumer Price Inflation, October
HM Treasury 2013
https://www.gov.uk/government/ Consumer Trends Q2 2013
organisations/hm-treasury Labour Market Statistics, November
Forecasts for the UK Economy 2013
Treasury Independent Average National Population Projections,
2010-based projections
Population Estimates for UK,
England and Wales, Scotland and
Northern Ireland Population
Estimates Timeseries 1971 to Current
Year, December 2011
UK Business, Activity, Size and
Location, 2013
United Kingdom Economic
Accounts, November 2013
UKtradeinfo
HM Revenue & Customs
https://www.uktradeinfo.com
Other Sources
BBC WRAP
http://www.bbc.co.uk http://www.wrap.org.uk
NEMS Market Research is often commissioned by Key Note to conduct exclusive consumer
surveys among a representative sample of adults aged 16 and over in Great Britain.
Social Grade
This is normally based on the occupation of the Head of the Household, or if the Head of the
Household is retired, their former occupation. If this information is not available, social grade
is based on environmental factors such as type of dwelling, amenities in the home, presence of
domestic help, etc.
The following table broadly defines the six social grades used. The relationship between social
grade and net income of the Head of the Household is a complex one and readers should note
that income is not determinant of social grade.
Head of Households
Social Grade Social Status Occupation
A Upper middle class Higher managerial,
administrative or professional
B Middle class Intermediate managerial,
administrative or professional
C1 Lower middle class Supervisory or clerical and
junior managerial,
administrative or professional
C2 Skilled working class Skilled manual workers
D Working class Semi and unskilled workers
E Those at lowest levels of State pensioners or widows
subsistence (no other earner)
Standard Region
This is as defined by the Registrar-General.
Online searching is carried out by product code or free search method, and covers the period
from the last edition of the report to the current day.
Trade sources, such as trade associations, trade journals and specific company contacts, are
invaluable to the Key Note research process.
Secondary data are provided by Kantar Media (TGI) and Nielsen for consumer/demographic
information and advertising expenditure, respectively. In addition, various official publications
published by National Statistics, etc. are used for essential background data and market trends.
Interviews are undertaken by Key Note for various reports, either face-to-face or by telephone.
This provides qualitative data (industry comment) to enhance the statistics in reports;
questionnaires may also be used.
Field research is commissioned for various consumer reports and market reviews, and is carried
out by NEMS Market Research.
Key Note estimates are derived from statistical analysis and trade research carried out by
experienced research analysts. Up-to-date figures are inserted where possible, although there
will be some instances where a realistic estimate cannot be made or external sources request
that we do not update their figures.
No part of this publication may be reproduced, copied, stored in an electronic retrieval system or transmitted
save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act
1988.
Published by Key Note Ltd, 5th Floor, Harlequin House, 7 High Street, Teddington, Richmond Upon Thames,
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responsibility for such errors or omissions. Details supplied by Key Note should only be used as an aid, to assist
the making of business decisions, not as the sole basis for taking such decisions.
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If you have any queries regarding the CTPS legislation you may find the following website useful:
www.ico.gov.uk