Prepared produce makes up one of the dynamic categories in the fixture and continues to show promising growth.
Value is rising ahead of volume, even with the pressure to achieve attractive price points and the perception that prepared and fresh-cut lines are a treat rather than an everyday essential.
The latest Kantar Worldpanel figures show that the market is growing in both value and volume, up 6.6 per cent and 5.4 per cent respectively. The market, worth £963 million, has got the most out of shoppers buying into the category more often.
Marks & Spencer is the clear winner, overtrading significantly and representing 16 per cent of all spend. Tesco, Sainsbury’s, Morrisons and The Co-operative all undertrade, showing the potential for expansion.
Tony Walsh, category manager at Florette, admits that “M&S is such a strong player that you almost expect the others to undertrade”.
But not everyone is convinced. Simon Martin, sales director of QV Foods, says Tesco, for instance, has a strong basic range but there does seem to be a need for more added value. “At a time when the consumer was looking for value only this worked, however, it is more about added value and innovation now,” he explains.
“But overall, value is increasing faster than volume, reflecting the continued consumer demand for added value rather than just for value products.
“In fact, the prepared category has held up well in recent times, despite the economic climate. Consumers are cooking from home, not necessarily from scratch but certainly introducing products or ingredients into the mix and this has seen the category remain buoyant as a result.
“With continued development and innovation, more retailers and foodservice outlets will move into prepared produce but this is not just about value and quality but also shelf life and convenience.”
Of course, part of the appeal is getting the price point right. A £1 ticket is key to moving volumes, especially in pre-packed portions.
“It’s about shouting about the product, making sure consumers know it’s there but in a relevant way,” says Walsh. “When a consumer sees a prepared product, they see convenience and assume, therefore, cost. It’s about looking at the price. Jamie Oliver’s salads are a great example. They are only £1 and include a dressing - shoppers were going to pay that anyway.
“But you’re always up against the preconceived idea that prepared produce is expensive. In reality, the average price point has been pretty consistent - it hasn’t come down, but it hasn’t gone up either.”
The sector is anticipating a seasonal uplift, driven by products that are tailored to Christmas such as party or snack lines. “It will be interesting to see how these perform,” says Martin.
“There are two major areas of innovation in the long term,” he continues. “The quality of recipe and content alongside packaging format. Together, these can produce a powerful offer for the consumer of high quality products that can be produced very conveniently and that they would be able to replicate.
“It is a very competitive sector and there are a lot of companies competing in what, in comparison to fresh produce, is still a small category. All these companies are looking to gain a critical mass but this is not going to be achievable long term for all the players that are currently involved, so it will be interesting to see how this unfolds.”
It’s clear that innovation will be key. One area that the major players are eyeing closely is the “semi prepared” category, somewhere between wholehead produce and ready to eat.
“There are a lot of things in this area that could contribute to growth, from pre-washed products to partially prepared lines,” says an insider. “Some consumers feel guilty that they don’t cook from scratch but we can make them think they are a cook. There are a lot of interesting products that will come through in this newer segment.” -
STOP THE CLOCK
A few extra days of shelf life could transform the prepared produce category. Anna Sbuttoni talks to AgriCoat NatureSeal managing director Simon Matthews about improving quality life
How much potential is there to extend the shelf life of prepared and fresh-cut products?
No matter how carefully it is engineered, the very act of washing, scrubbing, peeling cutting and trimming causes damage. The plant’s natural protection is destroyed once the skin is removed. The first thing to stress is that there is no magic wand and no single solution to managing shelf life.
Products like NatureSeal have a vital role to play in delivering quality shelf life, but it is only part of the process. Our experience with the apple industry, for example, has taught us how something as fundamental as the harvest date can impact on the shelf life of the cut slice. Selection of the raw material is vital. This is being understood more and more with produce such as melons. Then the manufacturers of washing and processing equipment have made great advances in the gentle handling and cutting of produce. This is critical. Dull and blunt cutting knives, for instance, can be more destructive, causing more damage and bruising, which will significantly impact on shelf life. Optimal packaging and temperature management are also vital.
How much could the category stand to gain if products got just an extra few days of freshness?
Sometimes with shelf life it is not just a matter of giving extra days of shelf life that should concern us, rather giving extra quality life. Much of our effort is focussed on ensuring product is offered with a good fresh appearance and eating quality at the end of life. The financial rewards are savings in product rejections or in losing consumers through a disappointing experience.
We all understand that an apple slice can become brown in a matter of minutes when exposed to the air. Quite simply, without some process it would be impossible to work with sliced apples as an ingredient with anything approaching a workable shelf life.
Waste is also becoming more of an issue. In the UK alone, the volume of this wasted food amounts to about 6.7 million tonnes, including packaged foods that have never been opened.
What part does packaging play?
Packaging and techniques such as modifyed atmosphere packaging (MAP) are some of the most important considerations for achieving extended shelf life and product safety in fresh-cut produce. Again, there is great variation among different types of produce. The leading packaging companies have a good understanding of the most appropriate MAP and design their packs and films depending on the specific product, the nature of the cut and the proportions in fruit mixes.
What are retailers looking for in terms of shelf life and product quality? What about consumer perception?
Fresh-cut produce needs to be attractive and eye catching. The primary quality attributes include colour, texture, flavour and nutritional value. Research both in North America and in Europe shows that consumers take product appearance into consideration and that colour is probably the main factor considered. Colour has a role in choice and research shows it can influence perceptions of sweetness and “pleasantness”.
What are you working on next?
We have recently expanded our R&D capabilities in the US and committed to some exciting research projects with universities in England and Germany. At the moment, we are developing processes for maintaining shelf life in bakery apples and prepared potatoes.
As a company, we are continuing our open innovation approach and are involved in research collaborations exploring natural alternatives to prevent bacterial and fungal growth in fresh-cut fruits. -
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