While sales of frozen pizza were pretty flat in 2006 and 2007, they surged 6.7% in 2008 and 6.8% in 2009 to £390M, said LFR. "Until fairly recently, the chilled sector was by far the best performer within the UK retail pizza market, due to factors such as perceived higher levels of quality, extensive new product activity and a wider range of toppings and bases.
“However, growth has started to level off within chilled, mainly as a result of efforts made by manufacturers to revive sales of frozen pizza, as well as the economic downturn and its effects.”
Some of the most innovative new product development has also been in the frozen sector, with manufacturers developing more targeted offerings such as pizzas for single-person households, women and children, plus a greater variety of bases and toppings, claimed LFR. “They have also improved the perceived healthiness of frozen pizza by removing artificial ingredients and additives.”
The frozen sector accounts for the majority of retail pizza sales in the UK, with a value share in 2009 of more than 53%, up from 51% in 2005, said LFR. “This provides an illustration of how the frozen sector has managed to turn round its fortunes within the last couple of years.”
UK sales of chilled and frozen pizza combined are forecast to grow by 16.1% to €950M in 2013, well ahead of forecasts for Germany (which is predicted to grow by 6.7% to €1.19bn by 2013) and France (forecast to grow by 8.9% to €610m by 2013).
Kids’ meals surge 30%
Sales growth in chilled ready meals has also slowed as cash-strapped shoppers have returned to the freezer aisles, with sales up just 3.5% in 2009 in a category that has historically seen high single-digit and double-digit growth since the 1990s.
However, there are still significant growth opportunities in chilled, said LFR: “The fish and seafood sector has been a growth area of late, due to more people seeking a healthier alternative source of protein to meat. Healthy meals continue to perform well within the chilled sector, and now account for 10% of overall sales.
“Another growth area is chilled ready meals aimed at children, the number of which continues to increase. Although this sector accounts for just 2% of the chilled market, sales are growing by over 30% per annum.”
In value terms, the total Western European market for frozen and chilled foods (comprising ready meals, pizza, coated foods and savoury bakery products) amounted to more than €15.35bn in 2009.
“The frozen sector is the larger of the two in value terms, accounting for a share of 52% in 2009. This figure has suffered a small decline in recent years owing to the growing popularity of chilled prepared foods, although the sector has staged a small recovery of late.”
By sector, ready meals accounted for 42.9% of value sales, ahead of pizza at 23.9% and coated foods at 23.2%.
By country, the UK represents by far the biggest player, with particular dominance in chilled foods: “With sales worth €3.88bn in 2009, the UK has Western Europe’s largest market for chilled prepared foods by some distance.
“Ready meals are expected to remain the Western European market’s largest sector, rising by 9.5% between 2009 and 2013 to reach €7.21bn. More dynamic growth is forecast for pizza, which is expected to increase by 11.4% to almost €4.1bn. By 2013, the market is expected to exceed €4bn in value terms, up by 11.4% compared with levels in 2009.”