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The market for prepared refrigerated foods.

Although the total market for branded and private labeled prepared refrigerated foods has increased at a substantial rate, vast changes are essential in order to ensure continued long-term growth, according to a new report by New York-based business research firm FIND/SVP.

"The entire market for prepared refrigerated foods seems to be on the brink of either great success or conspicuous mediocrity," says Catherine Roberts, a food industry expert and author of the FIND/SVP report. "While some categories are likely to play themselves out quickly and reach maturity by the middle of the decade, there are others whose potentials are, as yet, untapped," she adds.

Market segments include prepackaged refrigerated lunch products, pasta and sauces, pizza products, value-added, ready-to-cook or ready-to-heat poultry products, prepackaged refrigerated entrees and sous vide products (in a vacuum pouch), and refrigerated branded vegetables and soups.

Between 1990 and 1991, the total market for prepared refrigerated foods increased from $840.9 million to $961.1 million. This represents a growth rate of 14.3%.

FIND/SVP projects that the total market will reach $1.689 billion by the end of 1996. This forecast reflects a compound annual growth rate of approximately 12%. However, some product categories, including vegetables and soups, are expected to increase at a much greater rate.

Products that offer convenience and variety, such as fresh components that can be combined and cooked quickly, should continue to flourish. And the introduction of new types of products will stimulate the overall market.

The FDA is currently considering proposals which define the terms "fresh" and "freshly__." If the proposals are enforced, "fresh" will apply to a raw food that has never been frozen or preserved in any other way. "Freshly" will apply to products that are available no more than 24 hours after preparation and that have not been processed or preserved.

Prepared refrigerated foods constitute a hybrid market that originated in food service and was later modified to the retail market. "The marketing and logistical issues that face the prepared refrigerated foods market are thoroughly unique, and processors and retailers are still undergoing a learning process to fully understand the demands involved," notes Roberts.

The market began in 1985 and evolved through three phases that have culminated in refrigerated ready-to-cook meal components with relatively long shelf lives which can be nationally distributed through traditional warehouse channels.

Requirements for future success

The market will reach its potential only if marketers are committed to altering the way in which they operate. These changes must include technological developments, advertising, and distribution.

Unique products that are not "me too" versions of frozen foods can offer consumers variety and creativity in planning meals. Promotion of new concepts requires aggressive advertising and consumer education that focuses on the benefits and value of each product.

It is essential for processors and retailers to work together to make products east to obtain. Processors should also try to acquire merchandising space near their competitors, the FIND/SVP report recommends.

Leading players

Major competitors that currently lead the market include Oscar Mayer and Sara Lee (prepared lunch), Carnation and Kraft (refrigerated pasta and sauces), and Tyson Holly Farms and Perdue (prepared poultry).

The prepared pizza products and refrigerated entree categories are dominated by regional processors such as Crestar Foods and LaRoma. Northern Star is the only marketer that distributes prepared refrigerated vegetables nationally, and Henry Lambert and Tabatchnick supply prepackaged soups.

"The 1990s portend exciting new changes for refrigerated foods," says Roberts. "However, the potential will only be achieved when marketers, retailers, and consumers alike begin to understand that this new market must bring new products to a new consumer."

The 176-page report, The Market for Prepared Refrigerated Foods, is priced at 1,500, and is available from FIND/SVP, Dept. G3A, 625 Avenue of the Americas, New York, NY 10011.
COPYRIGHT 1992 Frozen Food Digest, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:Frozen Food Digest
Date:Jul 1, 1992
Words:637
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