Frozen Foods

Frozen Foods

Retail sales of frozen foods amounted to £4.7bn in 2007, a rise of 4.4% on the 2006 figure of £4.5bn. Between 2003 and 2007, the value of the market increased by 5.6%, from £4.45bn.

In this Key Note Market Report, the frozen foods market is divided into the following ten sectors: meat and meat products; fish and fish products; ready meals (excluding pizza); ice cream; poultry and poultry products; potato products; pizza; vegetables and fruit (excluding potatoes); cakes and desserts; and vegetarian foods. Meat and meat products comprise the largest sector of the frozen foods market, while the fastest-growing sector between 2006 and 2007 was fish and fish products.

One of the most significant factors currently affecting the food industry is the steep rise in food prices across a wide range of products. The frozen foods market is not immune to these increases, and manufacturers in many sectors of the market have been affected by the rising cost of raw materials. Pizza manufacturers, for example, have experienced sharp commodity cost increases in raw materials such as flour, oils, fats and dairy products, and frozen-chip manufacturers have been affected by extreme rises in the market price of potatoes and commodities such as sunflower oil, which are used to make the chips. Fish quotas and the increasing scarcity of some types of fish are also contributing to price increases in that sector. Food-price inflation —and the consequent need to manage this more effectively — was also one of the reasons for the merger of Young's Seafood and Findus by their owner CapVest in January 2008.

The frozen foods market is currently undergoing a revival in interest. The image of the market is improving as the leading supermarkets reduce the number of price-discount promotions on offer and invest in their own premium ranges of frozen foods. Many of the leading branded suppliers of frozen foods — including those in the fish, potatoes and vegetables sectors — are introducing products that are viewed as being healthy and are promoting the message that frozen foods are less wasteful and hence more cost-effective than many fresh and chilled foods. The endorsement of some frozen foods by celebrity chefs has also helped to boost sales of these items and contributed towards improved consumer interest.

The immediate prospects for frozen foods in 2008 and beyond are good, with a number of positive influences expected to help augment sales. During periods of economic downturn, consumers often switch to less expensive foodstuffs, and a slowing UK economy in 2008 should consequently benefit sales of frozen foods. The health advice surrounding the consumption of certain types of frozen foods should maintain high levels of consumer demand, and reductions in the number of special price promotions such as buy-one-get-one-free (BOGOF) offers should add value to the market and improve its overall image.  
 

Executive Summary

1. Market Definition

REPORT COVERAGE

MARKET SECTORS

Meat and Meat Products

Fish and Fish Products

Ready Meals (Excluding Pizza)

Ice Cream

Poultry and Poultry Products

Potato Products

Pizza

Vegetables and Fruit (Excluding Potatoes)

Cakes and Desserts

Vegetarian Foods

MARKET TRENDS

Positive Signs for Sales of Frozen Foods

Rising Food Prices

Healthy Image of Frozen Foods

Food Waste

ECONOMIC TRENDS

Gross Domestic Product

Table 1: UK Gross Domestic Product at Current and Annual Chain-Linked Prices (£m), 2003-2007

Population

Table 2: UK Resident Population Estimates by Sex (000), Mid-Years 2003-2007

Inflation

Table 3: UK Rate of Inflation (%), 2003-2007

Unemployment

Table 4: Actual Number of Unemployed Persons in the UK (million), 2003-2007

Household Disposable Income

Table 5: UK Household Disposable Income Per Capita (£), 2003-2007

MARKET POSITION

The UK

Table 6: UK Household Expenditure on Frozen Foods and Household Consumption

Expenditure on Food and Drink at Current Prices (£m at rsp and %), 2003-2007

Overseas

2. Market Size

THE TOTAL MARKET

Table 7: The Total UK Frozen Foods Market by Value at Current Prices (£m at rsp), 2003-2007

Figure 1: The Total UK Frozen Foods Market by Value at Current Prices (£m at rsp), 2003-2007

BY MARKET SECTOR

Table 8: The Total UK Frozen Foods Market by Sector by Value at Current Prices (£m at rsp and %), 2007

Meat and Meat Products

Table 9: The UK Frozen Meat and Meat Products Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Fish and Fish Products

Table 10: The UK Frozen Fish and Fish Products Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Ready Meals (Excluding Pizza)

Table 11: The UK Frozen Ready Meals (Excluding Pizza) Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Ice Cream

Table 12: The UK Ice Cream Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Poultry and Poultry Products

Table 13: The UK Frozen Poultry and Poultry Products Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Potato Products

Table 14: The UK Frozen Potato Products Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Pizza

Table 15: The UK Frozen Pizza Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Vegetables and Fruit (Excluding Potatoes)

Table 16: The UK Frozen Vegetables and Fruit (Excluding Potatoes) Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Cakes and Desserts

Table 17: The UK Frozen Cakes and Desserts Sector by Value at Current Prices (£m at rsp and %), 2003-2007

Vegetarian Foods

Table 18: The UK Frozen Vegetarian Foods Sector by Value at Current Prices (£m at rsp), 2003-2007

OVERSEAS TRADE

Meats

Table 19: UK Imports and Exports of Meat by Type by Value (£m), 2003-2007

Poultry

Table 20: UK Imports and Exports of Poultry by Value (£m), 2003-2007

Table 21: UK Imports and Exports of Poultry by Selected Country by Value (£m), 2007

Frozen Fish

Table 22: UK Imports and Exports of Frozen Fish by Value (£m), 2003-2007

Table 23: UK Imports and Exports of Frozen Fish by Selected Country by Value (£m), 2007

3. Industry Background

RECENT HISTORY

NUMBER OF COMPANIES

Table 24: Number of UK VAT-Based Enterprises Engaged in the Processing and Preserving of Fruit and Vegetables, Fish and Fish Products, and Potato Products, the Manufacture of Ice Cream and the

Production and Preserving of Poultry Meat, 2003-2007

Table 25: Number of UK VAT-Based Enterprises Engaged in the Processing and Preserving of Fruit and Vegetables, Fish and Fish Products, and Potato Products, the Manufacture of Ice Cream and the Production and Preserving of Poultry Meat by Turnover Sizeband (£000), 2007

EMPLOYMENT

Table 26: Employee Numbers in Enterprises Engaged in the Processing and Preserving of Fruit and Vegetables, Fish and Fish Products, and Potato Products, the Manufacture of Ice Cream and the Production and Preserving of Poultry Meat (000), 2003-2007

Table 27: Number of UK VAT-Based Enterprises Engaged in the Processing and Preserving of Fruit and Vegetables, Fish and Fish Products, and Potato Products, the Manufacture of Ice Cream and the Production and Preserving of Poultry Meat by Employment Sizeband, 2007

REGIONAL VARIATIONS IN THE MARKETPLACE

Table 28: Distribution of UK VAT-Based Local Units Engaged in the Processing and Preserving of Fruit and Vegetables, Fish and Fish Products, and Potato Products, the Manufacture of Ice Cream and the Production and Preserving of Poultry Meat by Government Office Region, 2007

DISTRIBUTION

Table 29: Number of UK VAT-Based Enterprises Engaged in the Storage of Frozen and Refrigerated Goods, 2003-2007

Table 30: Distribution of Local Units Engaged in the Storage of Frozen and Refrigerated Goods by Government Office Region (number and %), 2007

Table 31: Distribution in the Frozen Foods Market by Type of Outlet by Value (%), 2007

HOW ROBUST IS THE MARKET?

Table 32: Number of UK VAT-Based Enterprises Engaged in the Processing and Preserving of Fruit and Vegetables, Fish and Fish Products, and Potato Products, the Manufacture of Ice Cream and the Production and Preserving of Poultry Meat by Age of Business, 2007

LEGISLATION

Food Hygiene Regulations 2006

Food Safety Act 1990

Ice Cream

Quick-Frozen Foodstuffs Regulations

KEY TRADE ASSOCIATIONS

British Frozen Food Federation

Food and Drink Federation

Ice Cream Alliance

Other Associations

4. Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

Bernard Matthews Ltd

Birds Eye Ltd

Christian Salvesen PLC

Findus Ltd

HJ Heinz Company Ltd

Iceland Foods Ltd

Mars UK Ltd

McCain Foods (GB) Ltd

Northern Foods PLC

R&R Ice Cream UK Ltd

Unilever PLC

Uniq PLC

William Jackson & Son Ltd

Young’s Seafood Ltd

Other Companies

OUTSIDE SUPPLIERS

MARKETING ACTIVITY

Main Media Advertising Expenditure

Table 33: Main Media Advertising Expenditure on Frozen Foods (£000), Years Ending March 2004-2008

Ice Cream and Lollies

Table 34: Main Media Advertising Expenditure on Ice Cream and Lollies (£000), Year Ending March 2008

Frozen Vegetables

Table 35: Main Media Advertising Expenditure on Frozen Vegetables (£000), Year Ending March 2008

Fresh and Frozen Meat

Table 36: Main Media Advertising Expenditure on Fresh and Frozen Meat (£000), Year Ending March 2008

Fresh and Frozen Fish

Table 37: Main Media Advertising Expenditure on Fresh and Frozen Fish (£000), Year Ending March 2008

Frozen Ready Meals

Table 38: Main Media Advertising Expenditure on Frozen Ready Meals (£000), Year Ending March 2008

Fresh and Frozen Poultry

Table 39: Main Media Advertising Expenditure on Fresh and Frozen Poultry (£000), Year Ending March 2008

Frozen Pizza

Table 40: Main Media Advertising Expenditure on Frozen Pizza (£000), Year Ending March 2008

Exhibitions

Food and Drink Expo

InterCool

International Food and Drinks Exhibition

5. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

6. Buying Behaviour

CONSUMER PENETRATION

Table 41: Consumption of Selected Frozen Food Products in the Last 12 Months (% of adults), 2007

Table 42: Frequency of Consumption of Selected Frozen Food Products in the Last 12 Months (% of adults), 2007

Table 43: Consumption of Selected Frozen Food Products in the Last 12 Months by Sex, Age, Social Grade, Region, Children in Household and Marital Status (% of adults), 2007

HOUSEHOLD EXPENDITURE ON FROZEN FOODS

Table 44: Average UK Weekly Household Expenditure on Fresh, Chilled or Frozen Beef, Pork, Lamb, Poultry and Fish (£), Years Ending March 2003 to 2006 and Year Ending December 2006

Table 45: Average UK Weekly Household Expenditure on Fresh, Chilled or Frozen Beef, Pork, Lamb and Poultry by Gross Income Decile (£), Year Ending December 2006

Table 46: Average UK Weekly Household Expenditure on Fresh, Chilled or Frozen Beef, Pork, Lamb and Poultry by Age Group (£), Year Ending December 2006

Table 47: Average UK Weekly Household Expenditure on Fresh, Chilled or Frozen Beef, Pork, Lamb and Poultry by Government Office Region (£), Year Ending December 2006

Table 48: Average UK Weekly Household Expenditure on Fresh, Chilled or Frozen Beef, Pork, Lamb and Poultry by Place of Purchase (£), Year Ending December 2006

7. Current Issues

POLITICS

Competition Commission Inquiry into the UK Grocery Market

‘The Food we Waste’ Report

Foods Standards Agency to Review Fish Advice

Fish Conservation

HIGH FOOD PRICES

No End in Sight to Rising Food Prices

The Impact of Rising Food Prices on Frozen Foods Manufacturers

PRODUCT DEVELOPMENT

Changing Customer Perceptions of Frozen Foods

Healthier and Environmentally-Friendly Frozen Food Products

CORPORATE ACTIVITY

ENVIRONMENT

McCain Constructs Wind Turbines

8. The Global Market

OVERVIEW

Table 49: Sales of Frozen Foods in North America and Europe by Sector by Value (€bn and %), 2007

WESTERN EUROPE

Table 50: Sales of Frozen Foods in Western Europe by Country by Value (€bn and %), 2007

Table 51: Sales of Frozen Foods in Western Europe by Sector by Value (€bn and %), 2007

Table 52: Sales of Frozen Foods in Western Europe by Leading Suppliers by Value (€bn and %), 2007

THE US

Table 53: Sales of Frozen Foods in the US by Selected Items ($m and %), Year Ending 30th December 2007

JAPAN

Table 54: Number of Factories Producing Frozen Foods in Japan, 2003-2007

Table 55: Production of Frozen Foods in Japan by Volume and Value (000 tonnes and ¥100m), 2003-2007

Table 56: Production of Frozen Foods in Japan by Selected Products by Volume (000 tonnes and %), 2007

Table 57: Production of Frozen Foods in Japan by Market by Volume (000 tonnes and %), 2003-2007

Table 58: Production and Imports of Frozen Foods in Japan by Volume (000 tonnes and %), 2003-2007

Table 59: Per Capita Consumption of Frozen Foods in Japan (kilograms per year), 2003-2007

9. Forecasts

INTRODUCTION

ECONOMIC TRENDS

Gross Domestic Product

Table 60: Forecast UK Growth in Gross Domestic Product in Real Terms (%), 2008-2012

Population

Table 61: Forecast UK Resident Population by Sex (000), Mid-Years 2008-2012

Inflation

Table 62: Forecast UK Rate of Inflation (%), 2008-2012

Unemployment

Table 63: Forecast Actual Number of Unemployed Persons in the UK (million), 2008-2012

FORECASTS 2008 TO 2012

Table 64: The Forecast Total UK Frozen Foods Market by Sector by Value at Current Prices (£m at rsp), 2008-2012

Figure 2: The Forecast Total UK Frozen Foods Market by Sector by Value at Current Prices (£m at rsp), 2008-2012

MARKET GROWTH

Figure 3: Growth in the Total UK Market for Frozen Foods by Value (£m at rsp), 2003-2012

FUTURE TRENDS

Greater Emphasis of the Health Aspects of Frozen Foods

Further Consolidation in the Sector

10. Company Profiles

Birds Eye Ltd

Christian Salvesen PLC

HJ Heinz Company Ltd

Mars UK Ltd

McCain Foods (GB) Ltd

Unilever PLC

11. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Bisnode Sources