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UK Frozen Foods Market Suffers Under the Weight of Negative Consumer Perception

Posted on: Wednesday, 16 May 2007, 06:00 CDT

Research and Markets (http://www.researchandmarkets.com/reports/c56895) has announced the addition of Frozen Foods Market Report 2006 to their offering.

Retail sales of frozen foods amounted to £5.41bn in 2005, a rise of 1.2% on 2004. Between 2001 and 2005, the market increased by 4.7%.

The frozen foods market, as defined by this Market Report, is divided into the following ten sectors: meat and meat products; poultry and poultry products; fish and fish products; ice cream; ready meals (excluding pizza); potato products; cakes and desserts; pizza; vegetables and fruit (excluding potatoes); and vegetarian foods. The largest sector of the frozen foods market is meat and meat products, whereas the fastest-growing category since 2001 is poultry and poultry products. Another sector demonstrating higher market growth is fish and fish products.

The UK frozen foods market is mature and is suffering from competition from the chilled-foods sector. Chilled foods are growing strongly, and consumers view this sector as offering a higher-quality product. Frozen foods also have a poor image among consumers, an impression which is reinforced by the ongoing policy of discounting prices and offering special price promotions, such as buy-one-get-one-free deals, among the leading retailers. The market also suffers from a perceived lack of innovation in new frozen food lines, as well as from health concerns.

Two of the UK's leading frozen food retailers, Unilever and Heinz, decided to dispose of most of their fast-food businesses in the UK and across Europe. Poor financial returns are cited as being the major problem by both companies, although difficulties in the retail market, and in ready meals and desserts in particular, have also contributed to Heinz' decision. In addition to these suppliers, the depressed market environment is also affecting other sectors of the market, with Celsius First Ltd -- a frozen foods cold storage and transport business -- going into administration in March 2006. However, companies operating in other sectors of the market remain very much in demand. For example, Richmond Foods -- the UK's leading take-home ice-cream manufacturer -- was acquired by a US private-equity firm in May 2006.

The mature nature of the UK frozen foods market limits its expansion potential, and only modest levels of growth are forecast up to 2010. The discounting and special two-for-one price promotions of many frozen food lines will continue to affect the value of the market, and the increasing popularity of chilled and fresh products will remain a source of considerable competition. Consolidation among frozen food suppliers, both in the UK and Europe, will continue to be one of the main trends affecting the industry in the second half of the decade.

Baugur Group (The Big Food Group Ltd)

Bernard Matthews Ltd

Christian Salvesen Foods Ltd

Findus Ltd

General Mills UK Ltd

HJ Heinz Company Ltd

Mars UK Ltd

McCain Foods (GB) Ltd

Northern Foods PLC

RHM Frozen Foods Ltd

Richmond Foods PLC

Unilever Ice Cream & Frozen Food Ltd

Uniq PLC

William Jackson & Son Ltd

Young's Bluecrest Seafood Ltd

For more information visit http://www.researchandmarkets.com/reports/c56895

Source: Business Wire

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