Page 26 - Food & Drink Magazine July 2018
P. 26

READY MEALS
Private label at the ready
Innovations in food and flavourings are also likely to further boost the appeal of branded products, and Vuong predicts an increasing range of exotic and ethnic prepared meal options becoming available over the next five years.
However they will also rise operators’ costs, as new specialty ingredients increase production costs.
MORE FROM LESS
Larger industry operators, meanwhile, will build stronger economies of scale from large production volumes, Vuong forecasts, which will allow for the prices of prepared meals to remain in an attractive range for consumers.
“IBISWorld anticipates that convenience alone will not be enough to retain consumer attention, with taste and quality becoming key factors.
“This will be particularly important given the increasing sophistication and popularity of substitute options such as ethnic takeaways and fast-food establishments,” Vuong says.
Prepared meal exports have also grown over the past five years to account for an estimated 6.8 per cent of industry revenue, however Vuong says the perishable nature of the category is likely to constrain trade to countries geographically close to Australia, particularly New Zealand.
“Imports of prepared meals, which are anticipated to grow at an annualised 2.5 per cent
The push into prepared meals by Australia’s major supermarkets with their own private label products is putting pressure on revenues in the growing category, according to IBISWorld.
COMPETITION from supermarket private labels is hindering revenue growth in Australia’s prepared meals market, according to market researcher IBISWorld.
While consumer demand for products in this category has increased over the past five years, industry operators have found it difficult to compete with similar products launched by Coles and Woolworths that have much lower prices and more favourable shelf space. This has weakened revenues across the $607 million sector, according to a recent report authored by Bao Vuong.
A MATTER OF TASTE
Even so, Vuong is predicting annual growth of 3.2 per cent for the sector over the next five years as large operators build scale, and smaller players specialise in niches.
The largest prepared meal makers in Australia are McCain Foods with 32.7 per
cent of the market, followed by Simplot Australia and Lite N’ Easy maker Matchlow.
According to Vuong, the number of businesses in this market overall have increased over the past five years to 128, with many new entrants moving into niche specialties such as healthy prepared meals and other value added meal options,
“ Convenience alone will not be enough to retain consumer attention, with taste and quality becoming key factors.”
rather than competing directly with the largest players.
A further drive into high value meals, and greater product sophistication, is expected to improve revenue growth into the future, Vuong predicts, with categories like low-fat, low salt, low kilojoule, gluten-free, and non-dairy variants expected to rise in popularity.
over the next five years, are likely to be low-cost meals that will compete with private labels and other products at the low end of the market,” Vuong says.
“Local manufacturers are anticipated to focus on producing premium products for the Australian market, rather than exporting them.” ✷
26 | Food&Drink business | July 2018 | www.foodanddrinkbusiness.com.au


































































































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