The first truth of the food industry in the modern world is that consumers want convenient meal solutions. And the second is that manufacturers will constantly innovate to meet their needs. Trudi Griggs of Euromonitor International takes a timely look at the growth trends in convenience foods and its impact on the development of convenient packaging formats.
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At just over US$1,110bn the global market for packaged food is the largest of the fast-moving consumer goods (FMCG) markets. The global packaged food market as a whole fell by 1.7% in value terms in 1999-2000. Only seven of the 19 sectors that make up the packaged food market recorded positive growth over the period.
However, with more working women, longer working hours, smaller household sizes and an increase in urbanisation, consumers are still driving demand for more convenient meal solutions. Growth sectors were driven by demographic and lifestyle factors, reflecting a global consumer shift towards more informal eating habits and ‘snacking’ trends.
Consumption of convenient types of packaged food such as snack bars, which recorded growth at 10.6%, savoury snacks (3%) and ready meals (2.2%), has consequently increased due to the portability and ease of preparation of such products and their distribution through a wide array of convenient retail outlets. In developing countries, the main influence on packaging trends is economic growth stimulating an expansion of the middle classes and demand for FMCG, including packaged food.
Value packing increases sales
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By GlobalDataMost developed packaging markets have reached saturation in terms of penetration and it is value packaging that is more important to increase sales. However, the market potential in developing countries is enormous with the combined effect of increased penetration and value packaging.
Between 1999 and 2000, a major aspect of increasing demand for convenient food products was the development of convenient packaging formats.
Euromonitor identifies the following seven food packaging trends for the developed markets:
- Easy-to-open convenience foods, such as toaster pastries, offer quick meal solutions
- Products such as frozen entrées, jelly/jello and cottage cheese in single-serve packages will satisfy individual preference
- Hand-held products, such as yoghurt, that do not require cutlery are on the increase
- French toast sticks and spill-proof coffee cups designed for consumers on the go are popular
- Many supermarkets now offer full-meal solutions. A range of products is included in one container to provide a complete meal
- Products that offer oven-less heating and cooling without refrigeration;
- Hot and cold packaging that changes colour when the temperature is appropriate
Such packaging innovations as easy-to-open lids, portable sizes and re-sealable tops also serve the manufacturer strategy of transforming commodity-type products into value- added brands, whilst increasing potential consumption occasions.
Single serve for mobile lives
To meet the needs of people with mobile lifestyles, manufacturers have introduced single-serve packaging, emphasising portability. In the US in 2000, Nestlé updated its container for its Nesquik beverage from a gabled carton to a more conveniently sized, grip-moulded, plastic bottle.
The introduction of single-serve packages also revitalised subsectors such as canned fruit. Single-serve canned fruit offerings transformed the subsector from an eat-at-home item to a snack that can be eaten on the run since no can opener or bowl is needed. In the case of both fluid milk and canned fruit, these packaging changes allow manufacturers to increase value sales and to charge higher prices for the products as they provide added features.
Manufacturers also introduced foods in single-serve containers to meet demands for portion control. This was particularly the case in subsectors such as cakes and pastries where consumers wished to enjoy rich tasting foods whilst limiting their calorie consumption.
Open to ideas
In addition to portability, easy-to-open packaging was also a major trend contributing to product convenience. Aside from minimising the time spent preparing food, easy-to-open packaging also appealed to elderly consumers suffering from conditions such as arthritis, and the rising number of children who heat foods by themselves. In 2000, Campbell Soup introduced easy-to-open, ring-pull lids on all its ready-to-serve canned soups to increase consumption of canned soup and to distinguish itself from Diageo Plc’s fast-growing Progresso brand.
Re-sealable packaging also featured as a growth trend. Manufacturers in many sectors ranging from cheese to processed meat to frozen vegetables to soups redesigned some of their products in re-sealable packs. Re-sealable packages addressed consumer concerns about freshness and convenience. Zipper-style plastic bags similar to Ziploc bags, seal in flavour more efficiently than an open-top bag, and consumers do not have to worry about leakage or awkward metal ties. In the cheese subsector, re-sealable packaging drove sales of unprocessed speciality cheese.
All wrapped up
Analysts at Euromonitor project that the fastest growing sectors in packaged food will be noodles, snack bars, ready meals, sauces, dressings and condiments and meal replacement drinks.
Demand in these sectors will derive from two key consumer trends: the desire for convenient, portable food items (such as snack bars and ready meals), and increasing awareness of food health and quality (sauces, dressings and condiments). The challenge has now been set for manufacturers to capitalise on these trends and wrap up the market’s potential.
World market sizes • retail value rsp • US$m • current • year-on-year growth • sorted by 1999-00
|
|
Packaged food | -1.7 |
Snack bars | 10.6 |
Noodles | 6.1 |
Meal replacement drinks | 5.2 |
Savoury snacks | 3 |
Ready meals | 2.2 |
Dried food | 2.1 |
Sauces, dressings and condiments | 1.3 |
Baby food | 0 |
Frozen food | -0.4 |
Soups | -0.7 |
Bakery products | -1.7 |
Chilled food | -1.9 |
Dairy products | -2.4 |
Confectionery | -2.4 |
Ice cream | -3.2 |
Spreads | -4 |
Pasta | -4.2 |
Oils and fats | -5 |
Canned food | -7.1 |
| |
© Copyright and Database Right Euromonitor 2002 | |
By Trudi Griggs, Euromonitor
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