Key Note says the only way is up for chilled foods

By Graham Holter

- Last updated on GMT

Related tags: Chilled foods, Food, Chilled food association

Key Note says the only way is up for chilled foods
The UK market for chilled foods will continue to grow steadily, despite cost pressures and rising unemployment, according to a new report.

Research firm Key Note valued the sector at just over £9bn and said there had been 24% growth between 2006 and 2010.

The report authors wrote: “Initial growth will be fuelled by increasing commodity prices, as unemployment and inflation levels are forecast to remain high. When these levels fall around 2013, volume sales should increase and help to maintain more steady growth.”

Supermarket power

But the report highlighted a number of challenges. “Continued pressure from large supermarkets to decrease cost and improve quality has increased pressure on manufacturers.

“The intense competition between companies has resulted in a number of closures, with companies failing to sustain business after losing significant supply agreements.”

The report added: “Manufacturers also often face competition from within the same company, and must strategise to avoid direct clashes. For example, Northern Foods produces the Goodfellas brand of frozen pizzas, in addition to manufacturing Tesco’s chilled and frozen pizzas.”

Losing pace with market

The report pointed out that the chilled foods sector had grown at a slower rate than the overall food market. Consumer expenditure on chilled food as a percentage of overall food expenditure decreased by 8.6% between 2006 and 2010, it said.

Cash-strapped consumers were also reluctant to spend on premium products, the authors found.

Key Note calculated that sliced cooked meats were the largest category within chilled foods, accounting for 21.3% of sales value. Value-added seafood and poultry took an 18.3% share, followed by 13.2% for yogurts and 12.4% for ready meals.

All categories saw a sales uplift over the five-year period, and between 2009 and 2010, according to the research organisation's figures.

The UK chilled prepared food industry is the most advanced in the world, according to the Chilled Food Association, due to the diverse range of products available and the industry’s approach to food safety standards.

Related topics: Chilled foods

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