During 2004-2006, the global processed food arena experienced strong and steady growth. Taking a look at the range of processed foods that populate major retail centers—prepared meals, processed meat products, side dishes and soups—robust growth is being experienced everywhere except for the U.S. 

Plagued by weak new product introductions in the U.S. product food sectors, the top three subcategories were especially stalled.  This pattern goes hand in hand with weaker sales in red meat, frequently featured in prepared meals and certain meat products. According to Mintel’s red meat report, estimated total 2004-2006 sales were $66.1 billion from all consumer packaged goods (CPG) channels and restaurants. This represents a marginal sales decline for the two-year period. 

Within the processed food category, sales of breakfast meats also declined during 2004-2006, from more than $3 billion to approximately $2.8 billion, down 7.1%. Sales of slimming meals rose roughly on pace with inflation, up 5.7% for the past two years, to nearly $3.2 billion from a little over $3 billion.

Sliding Side Dishes

Side dishes account for four of the main subcategories, and they include pasta, potato products, rice and stuffing/polenta. Combined new product introductions in the U.S. rose modestly in 2004-2006 (533, up from 494), which is reflected in tepid sales growth, up 4.1% from $3.7 billion to slightly over $3.9 billion.

A number of trends have contributed to a weak side dish market. Convenience is a watch word among consumers, so it is in the convenience-oriented side dishes (ready-to-serve rice, prepared salads and refrigerated side dishes) that the greatest growth is seen. Sides that take more preparation—macaroni and cheese or stuffing mixes, for example—show declines that reflect consumers’ reluctance to commit to cooking, even if that cooking brings “instant” results (as is the case with “instant potatoes,” a side dish with a name that does not match its preparation time).

It is true that many of the side dishes listed here are about as convenient as could be expected—baked beans, for example, require only reheating, and rice mixes and stuffing mixes need minimal preparation. Convenience, therefore, is not the only factor that is inhibiting growth of side dishes. Overall eating patterns come into play as well, as the concept of “side dishes” implies a carefully thought-out meal—the classic “main course and two sides” that was the hallmark of dinners in the 1950s-1970s. However, times have changed. Mintel reports that in 2005, 58% of teenagers ate with their parents five to seven times per week. The rest of teenagers responded that they eat on their own, on the run or not at all. This suggests that formal meal planning (involving the preparation of a main course and side dishes) is not typically part of a household’s daily routine, but an occasional occurrence.

Complicating the “daily routine meal” issue further is the desire of individual family members for individualized meals (e.g., meat-free, diet-conscious or even differently flavored or spiced).  In many households, one meal is in reality a number of different meals served at the same time. Of course, the wide availability of pre-made side dishes from supermarket prepared food sections is also taking share away from packaged side dishes.

The market for side dishes in the U.S. was unique during 2004-2006, in that new products were highest in 2005. Most subcategories in U.S. food and beverages suffered a significant drop in 2005. Nevertheless, the pace of growth in global side dishes was far greater than in the U.S.: at 53% during 2004-2006 versus 8%.

Product claims grew much faster than rollouts in the U.S., with the average product carrying almost 1.6 claims (but still less than one claim per product in the rest of the world). Two of the most frequent and fastest-growing claims in the U.S. are “all-natural” and “no additives/preservatives.” There were also huge jumps during 2004-2006 in whole grain (48, up from 16), kosher (84, up from 17) and low-/no-/reduced-trans fat (42, up from 6).

Products in the rest of the world are rapidly sprouting the “convenient” claim, up to 376 products in 2006 from 64 in 2004, with “microwaveable” also growing quickly.

The data shows very clearly that multinational manufacturers see potential in side dishes outside the U.S., as Mintel Global New Products Database (GNPD) new product introductions leaped from 1,931 in 2004 to 2,961 in 2006 (up 65%). Annual leaders that have shown increasingly large numbers of new rollouts (excluding the U.S.) in 2004-2006 include McCain, Barilla, Carrefour, Coop, Comercial Gallo and Molinos Rio de la Plata.

Of course, Barilla is all about pasta, and the company was active during last year rolling out whole-grain products across European and Scandinavian countries—a claim it rarely made on such products prior to 2006.

Carrefour regularly launches all types of side dishes throughout Europe and Asia, particularly focusing on France, Italy, Spain and Thailand. The company has steadily rolled out microwaveable products since 2003, adding “convenient” to its list of claims starting last year. Product examples include Ricotta and Spinach Tortellini (France, ready in four minutes), Tagliatelle with Fresh Eggs (Thailand, ready in two to three minutes) and Riz Basmati Au Curry (Belgium, ready in two minutes).

Molinos Rio de la Plata is an Argentine company that specializes in pasta side dishes. It, too, started using claims of convenience on several new products in 2006 and also frequently adds vitamin/mineral fortification to its products.

McCain is by far the leader in potato products, introducing goods in most of the countries tracked by the GNPD. This company is reflective of the overall trend toward making claims on products highly visible to consumers, especially starting in 2003 and accelerating in 2006. In fact, this past year, the company frequently made use of many types of claims, including the range of low-/no-/reduced-, vegetarian, no additives/preservatives and microwaveable.

Coop focuses on a full range of side dishes in Italy, Switzerland and Scandinavia and also has increased several types of product claims in 2006. Interestingly, the company’s new side dish products were much more likely to carry an organic labeling in 2001-2004 than in 2005-2006.

Prepared Meals Bounce Back

Prepared meal introductions in the U.S. plummeted in 2005, then bounced back in 2006 to nearly equal 2004 rollouts. There were a few key factors at work, including a spike in low-carb rollouts in 2003-2004 that disappeared quickly. Yet 2005 was also a period of reflection and consolidation for manufacturers, as they assessed the value of recent new products. A wide range of major companies had significantly more new products hitting the shelves in 2004-2005 than in 2006, including Nestlé, Wal-Mart, Amy’s Kitchen, Luigino’s, Pinnacle Foods Group and ConAgra. The smaller number that increased rollouts include Target, Pierre Foods and Liberty Richter.

An important trend evident from studying information gleaned from the GNPD is that global product claims for various processed foods are growing much faster in the rest of the world than in the U.S.—evidence of the long-term trend toward a globally-linked food market, as global food companies become more dominant. The fastest-growing major claims in the world are in the convenience and no additives/preservatives sectors.

Note that in the U.S., most prepared foods are expected to be microwaved (54% of rollouts in 2006). The proportion in the rest of the world is only 43%, though this is up from 38% in 2004.

Processed Meats Hold Steady in U.S.

The market for processed meat experienced rapid global growth in 2004-2006, but was little changed in the U.S. Indeed, 2004-2006 rollouts in the U.S. averaged about 400 annually, down from about 435 during 2001-2003. This might be a surprise to most shoppers, given the seemingly wider range of products available, from semi-boneless leg of lamb from The Australian Lamb Co., new ranges arriving from foodservice, such as Schlotsky’s Deli and Omaha Steaks, as well as perennial leaders Tyson, ConAgra and Hormel.

Another trend that has become familiar in other categories is private label. Processed meats usually have one or two private labels in the top 10 each year, based on the number of new products, but in 2006, the three largest rollouts were all private: Aldi, Target and Roundy’s. Combining Albertson’s rollouts with Safeway would make four leaders.

The most significant changes in product claims during 2004-2006 is the more than doubling of claims of no additives/preservatives, and the mushrooming use of the “convenient” label in countries outside the U.S.  (up from 27 in 2004 to 116 in 2006). Similarly, while low-/no-/ reduced- claims rose 21% in the U.S., they jumped 193% in the rest of the world, with leading issues being fat and calories. Low-/no-/reduced- fat was the leading claim in the world, excluding the U.S., even edging out “microwaveable” for the top spot.

Processed Meats Hold Steady in U.S.

The market for processed meat experienced rapid global growth in 2004-2006, but was little changed in the U.S. Indeed, 2004-2006 rollouts in the U.S. averaged about 400 annually, down from about 435 during 2001-2003. This might be a surprise to most shoppers, given the seemingly wider range of products available, from semi-boneless leg of lamb from The Australian Lamb Co., new ranges arriving from foodservice, such as Schlotsky’s Deli and Omaha Steaks, as well as perennial leaders Tyson, ConAgra and Hormel.

Another trend that has become familiar in other categories is private label. Processed meats usually have one or two private labels in the top 10 each year, based on the number of new products, but in 2006, the three largest rollouts were all private: Aldi, Target and Roundy’s. Combining Albertson’s rollouts with Safeway would make four leaders.

The most significant changes in product claims during 2004-2006 is the more than doubling of claims of no additives/preservatives, and the mushrooming use of the “convenient” label in countries outside the U.S.  (up from 27 in 2004 to 116 in 2006). Similarly, while low-/no-/ reduced- claims rose 21% in the U.S., they jumped 193% in the rest of the world, with leading issues being fat and calories. Low-/no-/reduced- fat was the leading claim in the world, excluding the U.S., even edging out “microwaveable” for the top spot.

Soup Label Claims Increase

Each new soup product in the U.S. made 1.7 positioning claims in 2006, while in the rest of the world it was only 1.2 claims per product. However, global products are moving more in line with the U.S. because, as recently as 2004, global claims were less than one per product. In the U.S., among four of the most frequent product claims, only “microwaveable” grew; while, in the rest of the world, claims soared for “no additives/preservatives.” The world especially has warmed to the idea of “convenient” products, growing from only 25 in 2004 to 176 in 2006.

Low-/no-/reduced- products have been a trend across the globe for quite a few years, sometimes shifting from calories to fat to sugar. In 2004-2006, in the U.S., the leading claims in this area were fat, sodium, calories, trans fat and cholesterol. The rest of the world primarily is concerned with fat, calories and sodium.

“All natural” is a product claim that is very important in the U.S., even though it does not have governmental/health agency support, as do claims for “low-fat,” “low-sodium” and “whole grain,” or even trade group support, as does “organic.” The rest of the world does not view this as an important claim, this is evident for all of the products in this article (soups, side dishes, processed meats and prepared foods). Instead, “no additives/preservatives” is the claim much preferred in the rest of the world, but used less frequently in the U.S.

The information in this article was derived from the Mintel Global New Products database, www.gnpd.com, 312-932-0400.

Going Global

Some meal introductions around the world went for a walk on the wild side in 2006, featuring such meat and game as deer, pheasant, rabbit and guinea fowl, while at the same time conveying a premium positioning. Guinea Fowl Fillets with Pumpkin and Chestnut Purée launched under the Picard Le Traiteur brand in France, and the entrée boasted a sauce of pleurote mushroom. The Coop Gourmet brand introduced venison casserole in Sweden: made with mashed potatoes, Hjortgryta was produced using the sous vide method. Pheasant was found in a ready meal from Keeper’s Choice in the U.K., while Valette introduced Foie Gras Escalopes in France.

The use of whole grains in frozen pizza has been well-documented in the U.S., and other areas of the world likewise have begun to follow suit. Sweden now has Wholegrain Capricciosa Pizza from Procordia Food AB.

The same company also had a notable side dish introduction in Sweden. Potatisgratäng Med Rotfrukter Potato Gratin with Beetroot had 3.5% fat and was a prime example of the use of different vegetables in sides. Potato Purée with Cream & Meadow Mushrooms was launched in Poland by Nestle, while Argentina saw Jumbo Retail introduce Jumbo Puré de Zapallo con Papa (Pumpkin and Potato Puree).

Meanwhile, China saw Sichuan Shantuwei Food release Sweet Potato Powder, “made of high-quality sweet potatoes…refined with modern industrial technologies.”

Perhaps seeking to capitalize on the purported health benefits of Mediterranean cuisine, a number of rice introductions were inspired by the region’s flavors. Léta-Coop launched Vargányagombás Rizottó (rice with dried mushroom pieces) in Hungary, as well as Mediterrán Rizottó (rice with Mediterranean vegetable pieces). Arroz Preparado con Vegetales (prepared rice with vegetable pieces) launched in Guatemala from Arrocera Los Corrales.        

PHOTOS COURTESY OF THE MINTEL GNPD