When prepared food and ready meals burst onto our shelves in the 1950s, they were revolutionary. As food writer Michael Fort notes, they were ‘impossibly exotic and exciting, they were magical things’.
But, that image has surely changed. A decade ago, when you imagined the prepared food and ready-to-eat aisle in your local supermarket, what did you see? Was it rows of black plastic containers that made you feel slightly nervous to peel back the lid and see what’s inside? For many, this was the dominant image of the sector; cheap and not so cheerful.
Increased focus on quality, innovation and premiumisation has driven the ready-to-eat market to refresh and is increasingly being dominated by private label products, where manufacturers have raised the standard for what ready-to-eat and prepared offers should look like. Own-label producers such as Greencore and Oscar Meyer have driven an increase in the quality of offering significantly. And private equity has taken note; Deutsche Beteiligungs acquired Oscar Meyer in early April.
But for brands, this increasing competition and quality by own label has offered an opportunity as well as a challenge, particularly when the perception of the industry is still based around an image of microwavable, lazy and inferior dining.
21 years ago Charlie Bigham set out to change that. He saw a hole in the market for high quality prepared food that most definitely did not belong in a microwave. As Charlie himself says, ‘we make proper food, which you cook in the oven.’ Bigham’s makes everything fresh – ‘just as you would at home’. Charlie realised that though a chicken korma that can go from your fridge to your plate in four minutes is sometimes exactly what’s called for, there’s also a space at the premium end of the market.
That’s why the meals are made for two – it’s a sit-down meal for busy people and couples who might not have the time to prepare a dinner from scratch but still want quality and freshness baked in.
And it’s a success. The business has grown by around 25% a year since its founding, and has recently announced a state-of-the-art new kitchen facility in Somerset that will generate hundreds of new jobs and many more in years to come. Further to which, Patrick Cairns joined earlier this year as CEO to drive the next growth phase for the business, and innovation will keep the business fresh.
But Charlie’s success isn’t just down to successful branding, iconic packaging and deep market knowledge; Bigham’s just does business well. It may not be a tech disruptor, flipping the industry on its head with an entirely new and revolutionary concept, but the business is an exemplar of sustainable growth meshed with an effective company culture. The type of business millennials are increasingly supporting.
“There’s a growing number of people who want to know where their food comes from and are willing to pay more for high quality meals because it’s actually better value.” Charlie Bigham in conversation with the Telegraph
Over half of its staff have been at the business for more than two years, an achievement for an industry with such high turnover. It’s committed to the ‘lean’ theory of management espoused by Toyota – that means watching the margins, and each ingredient is measured to within a few grams at the facility. And it’s grown organically, using profit to reinvest in the business year-on-year to create a platform to succeed.
Other companies are pursuing similar growth strategies based on differentiation through offering. In the adjacent pie and quiche category, Higgidy and Pieminster have expanded in recent years thanks to strong branding which emphasises the human element of their product as well as the artisanal manufacturing approach. Laila’s Fine Foods, supplying Lidl, Morrisons and Iceland, has found success in focusing also on handmade production as well as regional specialities – generating a sales increase of 45.6% the year to July 2016. Cook’s retail format also offers a compelling form of differentiation in terms of shopper experience as well as a strong online delivery offering.
Change hasn’t just been limited to offering – the model is adapting as well. Though not strictly ‘ready-to-eat’, HelloFresh was Europe’s fastest growing company between 2012 and 2015, reporting a revenue increase of 13,159% and they recently signed a deal to introduce their meal kits at Sainsbury’s, their first agreement with a supermarket retailer. It now delivers ten million meals a month globally. Graze, which started off as a subscription-based snack service is now stocked by several name-brand supermarkets.
Graze has also built a technology-enabled factory that provides the company with the flexibility to develop, test, and roll-out new products rapidly to meet the shifting tastes of consumers. Those who take advantage of the evolving online world in relation to food and convenience are clearly leading the way.
Diet Chef and Jane Plan are two that offer an online personally-tailored delivery diet service that uses not only the technological resources, but also accesses an increasingly health conscious customer base. The ready-to-eat category offers a level of calorie counting and nutritional information that is simply impossible to replicate when making a meal from scratch at home.
New foodie trends – which now have their own devoted page on Amazon – are creating new areas for growth and expansion. In the soup category, Hain Daniels-owned New Covent Garden Soup now have a skinny range and consistently innovate with new recipe ideas to adapt to the rapidly shifting market. Hain has further added to its portfolio with the recent acquisition of upmarket soup company Yorkshire Provender – another business dedicated to British produce, imaginative innovation and freshness.
Similarly, companies like Cauldron and Linda McCartney are effectively taking advantage of these new trends, whether it be gluten-free or an emphasis on high-protein meals to update their offering to better reach their targeted consumers.
The industry is changing, with new demands from consumers who have come to expect ever more variety and a certain amount of reactiveness to new foodie fads, be it avocado or Matcha or chia seeds, from their favourite ready-to-eat brands. For instance, the gluten-free USP of Genius Foods and the high in protein and fibre offer of Glorious Soup. But more than that, consumers have, led by business like Bigham’s, become accustomed with the idea that the prepared food aisle can offer quality as well as convenience.
The key for brands operating in this space is an awareness of the customer and an ability to react to, or predict, what they want. Bigham’s put the customer at the heart of their process through an unremitting focus on quality and freshness, as much creating a market for premium prepared meals as tapping into one.
For other companies the path to success may look like a relatively rocky road, but if they can keep to the kind of sustainable growth and consistency of offering that Bigham’s and its ilk have managed, then despite the challenges posed by the dominance of private-label, there will still be a bright future ahead for the industry.