• Ready-meals Show Somewhat Lackluster Growth in 2011
  • Refrigerated Pasta, Meals Show Rising Popularity
  • Pizza Remains Strong, with New, Unusual Pairings
  • Smaller Households, Lunch Options Bring Opportunity


    Just as sports teams sometimes experience a “transitional year” from time to time, 2011 proved to be just such a year for makers of convenience meals and processed meats. The perception of these markets as relative “safe havens” for economically stressed consumers ebbed a bit as the economy improved.

    The easy money made from consumers shifting food dollars away from restaurants and toward supermarket fare faded somewhat in 2011, as pent-up demand for eating out began to kick in. Indeed, the Food Marketing Institute reported the percentage of U.S. shoppers stating they “eat out less frequently” slid from 69% in 2009 to 54% in 2011.

    The result was a somewhat lackluster year for new products. Introductions of frozen ready meals dipped from 477 new SKUs in the U.S. in 2010 to 342 in 2011. Likewise, launches of chilled meat products hit the skids in somewhat more dramatic fashion, with 2011’s launches down nearly half from 2010’s tally—243 new product SKUs vs. 457.

    But, not every category was tanking in 2011: Pizza was resilient with launches of frozen pizza up by more than 27%, while chilled pizza was easily ahead of 2010’s numbers, too. Chilled fresh pasta—a niche market in the U.S.—saw launches rise by more than 60% in 2011. This market seems to be at the eye of a perfect storm. Fresh pasta is quick, nutritious and tasty—three reasons why it prospers.

    Subsequently, shelf space allocated to refrigerated pasta seems to be on the rise in channels like warehouse clubs, where one finds offerings like Legal Sea Foods Inc.’s Maryland Crab Ravioli, as well as Mario Batali brand Four Cheese Ravioli. More recently, the pot meal concept is offering innovation. Taylor Fresh Foods Inc.’s Taylor Farms brand debuted its Snack Pot Refrigerated Meal line in 2011 with varieties such as Shells & Cheese with Bacon. The products are marketed as being high in calcium, iron and protein.

    Pizza Plus

    With pizza, the main attractions are products that can steal [share and sales from restaurant and takeout] venues. The target is inviting, given chains like Domino’s Pizza LLC and PepsiCo’s  Pizza Hut generate billions of dollars of sales per year. Persuading consumers to give up on takeout has become an obsession for frozen pizza makers. Manufacturers collectively are closing the quality gap between the two types of pizza.

    Because side dishes like chicken wings are purchased with takeout pizza as often as half the time, new packaged product launches  moved in this direction in 2011. Nestlé USA’s DiGiorno Pizza features different “sides” or combinations including Boneless Wyngz (Buffalo-style or Honey BBQ), Breadsticks and the highly unusual Pizza & Chocolate Chip Cookie Dough pairing. Nestlé was keen enough on the concept that it also extended it to its California Pizza Kitchen line with Pizza & Appetizer featuring a Sicilian Recipe Pizza & Spinach Artichoke Dip.

    Two other trends were big in frozen pizza in 2011: thin-crust products and single-serving slices. Thinner crust pizza built on momentum in the bread market where flatter, thinner breads are hot right now. Combining the two was Evol Foods Inc.’s Evol Flatbreads, a line featuring gourmet ingredients and unique flavors like Goat Cheese Pesto & Portabella. Schwan Food Co.’s Freschetta brand Simply Inspired Thin Crust Pizza was another brand touting restaurant quality in unique flavor offerings, such as Hawaiian Style.

    One reason pizza is so popular is that it provides a lot of food for the money and is perfect for larger households. But, recent launches, such as Freschetta By The Slice Pizza, broaden the appeal to smaller households that tend to shy away from large-size pie offerings that are ubiquitous in takeout.

    Smaller Households

    Growth in numbers of single-person households is finally too large to ignore. The Pew Research Center notes that 14% of U.S. households consisted of consumers living alone in 2008, up from 8% of households in 1970. A big drop in marriage rates is a factor. Just 51% of American adults aged 18 and older were married in 2010 (a record low), compared to 72% in 1960, says the Pew Research Center.

    Interest in smaller households is reflected in several “for 2” offerings in the frozen meal market. Gourmet Express LLC’s Joe’s Crab Shack Perfectly Steamed Frozen Meal for 2 and P.F. Chang’s Home Menu Meals for 2 (made by Unilever USA) illustrate the trend.

    Another trend impacting the frozen meal market is the growing popularity of vegetarian meals. It’s estimated nearly half of Americans are trying to reduce their meat consumption. New, non-meat alternatives that appeared in 2011 included Wegmans Food Markets Inc.’s Organic Food You Feel Good About line of Frozen Vegetarian Burritos. They come in tofu and other bean-based varieties.”

    Maybe someday, this market will rival the chilled ready-meal market in Europe, a market rich in innovations like the Whistling Chef Ready Meal, a 2011 entry from the UK that whistles like a teapot to signal it is time to take it out of the microwave. While launches of chilled ready meals were more or less unchanged from 2010, shelf space being allocated to new product offerings appears on the rise, and the future looks bright.

    The Biggest Loser line of Simply Sensible Entrees is indicative of this trend. Launched by the Harris Food Group, the line includes five entrees offering “fully developed flavors” with reduced calories, salt and fat. The brand gets its name from The Biggest Loser reality show that has proven to be one of the highest rated shows on primetime television. This strong name recognition has helped the brand and line exceed sales expectations in 2011.

    From the Fridge

    Refrigerated meals are an area where store brands may be a little ahead of the curve, relative to their branded counterparts. Kroger’s Healthy Meals Made Simple line of refrigerated entrees is fully cooked while being low in saturated fat and cholesterol. Most importantly, the line has never been frozen, a claim that helps confer quality and flavor advantages that can be lacking in frozen products.

     Refrigerated meals may also have a leg-up on other types of convenience meals when consumers are in a rush. Plus, significant percentages of shoppers apparently are poor meal planners. The Food Marketing Institute reports that 23% of consumers polled in 2011 were not sure what they would be eating for dinner just two hours before the meal. Lack of planning leads to impulse choices, and one part of the food market gaining from this is the breakfast opportunity. The NPD Group reports that breakfast has accounted for 60% of total industry growth in quick-serve restaurants the past five years

    General Mills Inc.’s Pillsbury brand unveiled a pair of high-profile breakfast launches in 2011 in Frozen Egg Scrambles and Grands! Biscuits Sandwiches. Egg Scram-bles is a “microwave in the bag” meal that can be heated in six minutes or less for a “weekend breakfast on a weekday.” Both flavors in this line–Bacon & Veggies and Sausage & Veggies–feature Green Giant brand vegetables, helping to both bump up vegetable consumption at a non-traditional time of day and meet the USDA’s new MyPlate initiative.

    Let’s Do Lunch

    Lunch has always been a great opportunity for packaged food makers, especially with brown-bagging up due to the economic downturn. The Food Marketing Institute’s “U.S. Grocery Shopper Trends 2011” report finds the percentage of Americans bringing lunch from home to work has increased in popularity each of the last four years.

    That spells opportunity for some. ConAgra Foods Inc.had the right product and the right time with its 2008 debut of Healthy Choice Fresh Mixers, a tub-packaged microwavable pasta product with a built-in strainer. In 2011, ConAgra extended Fresh Mixers in two ways, first with the rollout of a Mediterranean-inspired sub-line in flavors such as Balsamic Vegetable Medley and Roasted Garlic Chicken. Secondly, ConAgra brought its Marie Callender’s brand into the fray with Marie Callender’s Fresh Mixers in meals like Creamy Four Cheese Mac and Creamy Parmesan Chicken. Marie Callender’s has long been a fixture in the freezer case, and this debut marks the brand’s expansion to shelf-stable meals.

    Other lunch-oriented debuts sought to counter the perception that brown-bagged lunches are boring. Sukhi’s Gourmet Indian Foods Co. capitalized on the growing popularity of Indian food with its NaanWich Flatbread Sandwich in flavors like Chicken Tikka Masala. Also seeking to jazz taste buds were Oscar Mayer’s Sandwich Combos which look like adult Lunchables. They’re offered in flavors like Southwestern Style Chicken (which includes a container of Jell-O strawberry gelatin and a packet of 100-calorie Mr. Salty chocolate-covered pretzels along with sandwich ingredients).

    One area within convenience meals that was quiescent in 2011 concerns products aimed at children. Increased regulation of products aimed at impressionable young minds, together with growing worry over childhood obesity, appears to have dampened new product activity in that arena. One of the few entrants geared toward children was Kidfresh All-Natural Frozen Kids Meals. Then again, this launch hits on numerous politically correct hot buttons, including beef raised without antibiotics, minimal processing, BPA-free packaging and more. Spaghetti Loops Bolognese was one of several new flavors added to this line in 2011.

    Processed Meat

    The thrust in processed meats for 2011 was giving ingredients like nitrates and antibiotics the slip. Not that these trends are necessarily new; nitrite-free hot dogs have been around since the 1970s. What’s different this time around is that larger brands and private labels are on board with the trend.

    Full Circle Hot Dogs are a private label offering with no nitrates or nitrites added and made with pork raised with no antibiotics or growth hormones. The latter two claims have ramped up over the past couple of years. Datamonitor’s Product Launch Analytics reports that roughly one of every five new chilled meat products in the U.S. made either a “no antibiotics” or a “no added hormones” claim in 2011.

    Another trend in processed meats is flavored sausages for a tasty main dish or side dish—depending on the meal. These products have been a mainstay in the fancy food trade for years, but are now more common in supermarkets. Johnsonville Sausage LLC’s chicken sausage, in flavors such as Chipotle Monterey Jack Cheese, is an example of the trend. Coleman Natural Foods Inc.’s Natural Chicken Sausage line, in flavors such as Spinach & Feta Cheese, is another example of a growing focus on flavored sausages in the meat aisle.

    Meat Meals That Aren’t

    To meat, or not to meat—that is the question for consumers weighing the pros and cons of going “meat free,” either full time or on a meal-by-meal basis. And, these considerations are having an impact on the packaged food market.

    According to Datamonitor’s Product Launch Analytics, 5.4% of all new food product launches in the U.S. in 2011 were either “vegan” or “vegetarian,” a modest increase from a few years ago. As recently as 2006, just 3.9% of food introductions made one or both of these claims. While it’s too soon to call this a true “greening” of the American diet, it does indicate things are moving in a more profitable direction for companies selling meat substitute-based products.

    The number of true vegetarians in the U.S. still is relatively small; the Baltimore-based Vegetarian Resource Group puts them at about 5% of the total population. But, if one counts consumers who occasionally gravitate toward vegetarian foods, the market is estimated to be double or triple that of full-time vegetarians.

    A slow transition appears to be taking place, with Americans gradually dialing back their consumption of red meat and embracing alternatives that include grains, lentils, fruits and vegetables. It helps that the health news is bullish for peas, beans, chickpeas and lentils, which are collectively referred to as “pulses.”

    A 2011 study conducted by Philip Chilibeck, Ph.D., at the University of Saskatchewan measured the effects of a pulse-based diet on individuals over age 50. The results showed promising cholesterol-reduction benefits: Compared to a “regular diet,” study participants on a pulse-based diet over a two-month period saw total cholesterol levels decrease by 8.3%, including a 7.9% drop in LDL cholesterol.

    Pulse-based products recently wedged into the chip category in the form of potato-chip alternatives. Examples include Mediterranean Snack Food Co.’s Baked Lentil Chips and Kellogg Co.’s BeANatural 3 Bean Chips. But, the use of pulse ingredients in new chilled or frozen meat alternatives has been more muted; soy has been, by far, the dominant legume for meat analogs for decades.

    Still, some meat-free launches are stretching out, ingredient-wise. While SoL  Cuisine Inc.’s Almond Grain Burger with Whole Spelt & Amaranth does include soybeans as an ingredient, it blends them with spelt, carrots, onions, green lentils, amaranth and almonds. Also, Gardein Protein International’s new Ultimate Beefless Burger combines vegetables, grains and plant-based proteins, including pea protein, an ingredient on the rise partly because it is less likely to be allergenic than soy protein.

    Marlow Foods Ltd.’s Quorn Products is adding the first vegan product to its already successful range of meat analogs made from mycoprotein (i.e., mushrooms). It’s completely soy free in addition to being free of all animal and animal-derived ingredients.

    Long term, where the meat alternative market goes in the U.S. is anyone’s guess. “Vegetarian” and/or “vegan” product claims are sought out by a relatively small percentage of consumers. According to a 2011 Datamonitor consumer survey, 19% of American consumers said “vegetarian” or “vegan” product claims had a “very high” or “high” amount of influence on their food or beverage choices. That is a much lower percentage than the 68% of Americans who said the same about the “fresh” claim; the 44% who agreed on the “natural” claim; or even the 26% who favored the “fair trade” claim.

    Tom Vierhile is Innovation Insights Director for Datamonitor, and is focused on new products, trends and intelligence in new consumer packaged goods. Vierhile has more than 20 years of experience reporting and analyzing new consumer packaged goods. He holds an MBA from the State University of New York at Buffalo; contact 585-396-5128 or tvierhile@datamonitor.com.