An era of health, nutrition and convenience has ushered in new consumer tastes, lifestyles and dietary concerns that have caused producers to adapt to changes in the marketplace.
The emphasis on healthy eating and healthy living has adversely affected demand for some industry products, especially potato crisps and frozen potato foods, due to the perceptions that these items are unhealthy.
Alternatives such as fruit and cereal products have impeded industry growth. In response, producers have been proactive in introducing a range of new products that address trends of health and convenience, such as low-fat varieties of traditional crisps with innovative packaging.
This could not fully reverse the effect, however, and revenue contracted in the two years leading into 2012-13. Amid the economic malaise, sales of frozen foods have remained strong as consumers chose to cook inside the home.
Producers of frozen products targeted family consumption heavily in order to capture the expanded market. In the five years through 2012-13, industry revenue is expected to increase at a compound annual rate of 1.5% to total £1.68bn. During 2012-13, industry revenue is expected to contract by 3.3%.
Over the next five years through 2017-18, the industry is forecast to remain resilient, with modest growth expected to be primarily driven by slow economic recovery and the continuing trend of snacking.
Busy lifestyles, health concerns and preferences for convenience will continue to determine product innovation and the types of strategies that producers follow.
Source: IBIS World
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