A key factor driving the cost of living crisis around the world is the unprecedented rise in energy costs, says data and analytics company, GlobalData. As financial pressures worsen, time-saving ready meals that limit meal preparation and cooking times while retaining value positioning may see an uptick in demand, the firm said.
The global ready meals market is expected to gain $24,974 million over the next five years, reaching $104,057 million in 2026 at a compound annual growth rate (CAGR) of 5.6%, according to GlobalData. Meanwhile, the volume of the ready meals market stands at 10,071 million kilograms in 2021 and is only set to rise by 1.8% CAGR over the same period.
Jenny Questier, Senior Consumer Analyst at GlobalData, comments: “The cost of living crisis could be an opportunity for brands and manufacturers to look at product portfolios and innovation in pre-prepared meals and identify opportunities where they can provide genuine value for consumers wanting to offset other financial considerations. If brands in this category have to raise prices in future, they will want to carefully consider higher price points for consumers who are looking for a meal solution that also saves on energy costs.”
According to GlobalData’s 2022 Q1 consumer survey, 24% of global consumers currently state that ‘good value for money’ means ‘low price or cheap’ when buying prepared meals. This is compared to only 6% that state the same with regards to ‘time saving’ claims.
Questier continues: “Ready meals are often marked up in price as they have traditionally been positioned as convenience rather than value alternatives. However, it’s interesting that generally people don’t associate typical convenience factors such as time saving with the category when looking for good value for money. Instead, they look for promotions or low price, perhaps reflecting the category’s success in the private label sector as well.”
Saving money is valued over the traditional benefits of convenience in the prepared meals category, which will naturally challenge brands and retailers over any future price increases to mitigate their own rising overheads.
Questier adds: “The soaring cost of living is presenting many consumers with difficult choices when it comes to spending. Going forward, this is likely to not only be a choice between brands, private label and value products, but also a choice on whether to replace certain products and ingredients altogether.”
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