On the shelf: in a category where the latest innovation defines segment growth on the whole, shelf-stable meal products that truly innovate have a strong chance at success, however fleeting that may be in this evolving category

Prepared Foods, Sept, 2004 by William A. Roberts, Jr.

Shelf-stable meals, in such canned varieties as meats, vegetables and fruits, are by no means new, having been around since the 19th century. Since that time, such products have offered a more convenient alternative to from-scratch meals, and recent developments have led shelf-stable fare out of the can.

No matter the package, be it can. tray or box, the category faces a wide array of challengers for stomach share. In its new report on the shelf-stable meal market in the U.S., Mintel International Group's (Chicago) exclusive consumer research found consumption of heat-and-eat meals surpasses frozen, ready-to-eat foods and meal kits requiring meat (though finishing second to restaurant opt ions. For its report, Mintel defines shell-stable meals as packaged, prepared meals that require no refrigeration, no additional ingredients (except, in some cases, water) and minimal heating or cooking.

A look at the ages of shelf-stable meal consumers reveals this to be the range during which children most likely will he present in the household. As such, Mintel advises manufacturers to pursue any options that could make shelf-stable meal preparation more child-friendly. More than six in 10 parents regard the products as a "good way" to get food for kids' snacks and meals. To some degree, children participate in selecting the food, though parents remain the gatekeepers: any marketing effort should appeal to the children, while also addressing parents" concerns about food quality and the safety of children preparing it.

A wise strategy could be to capitalize on the parents' memories of their own childhood and fondness for the meals of that time. The category is another example of the trend toward comfort foods, with almost 40% regarding macaroni and cheese as one of their favorite comfort foods.

Big Mac & Cheese

With such high regards, it should be little surprise that macaroni and cheese is the category's top-selling segment, accounting for almost 38% of the market in 2003. Mintel's report covers a sales period from 1998 to 2003. During that time, the segment grew and declined in the same patterns as the category as a whole, yet sales of macaroni and cheese fell in the last, two years, finally settling on a 9% growth in constant dollars during the six-year period. Kraft (Glenview, Ill.) dominates the segment, with a share of over 80%. Such a strong position has its drawbacks, however, considering Mintel suspects Kraft's product may be too familiar to build sales. Not that this has stopped the giant from trying. Kraft's primary efforts, though, have been to fight private-label products, which have begun eroding the giant's market share.

In 1998, the company launched Easy Mac, a large reason behind growth of the segment during the early years under review. The microwaveable product has continued to sell well, increasing sales by more than $10 million each year since 1999 and indicating the type of product likely to appeal to families short of time.

One and None

Kraft also leads the microwaveable entree segment. Though not quite as dominant as in macaroni and cheese, Kraft's It's Pasta Anytime! holds a sizable share. In fact, Mintel describes the segment as It's Pasta Anytime! and everything else. The Kraft product was the segment's only entry that built sales between 2001 and 2003, benefiting at least in part from the marketing effort Kraft has put behind the product since acquiring it in 2001. However, the pasta item also serves as a prime example of catering to convenience, as it combines an easy preparation with a result comparable to its from-scratch competitors.

Kraft's biggest competitor in the segment to date has been General Mills (Minneapolis), whose Betty Crocker Bowl Appetit launched in 2000. First-year sales for the product stood at a promising $27 million and continued the upward track in year two, but declines began in 2002.

Most products competing in this segment are found in small, microwaveable bowls, suitable for lunch bag use. However, Mintel believes certain of these may have a perception problem. Americans accustomed to large portions may regard these bowls as small and, furthermore, consumers increasingly are skipping lunch.

Time pressures have taken a toll even on convenient shelf-stable meals, as have declining cooking skills and increased levels of disposable income, the latter of which has been especially beneficial to sales in restaurants and fast food chains. On the positive side, shelf-stable meals do share some of the same benefits as foodservice: not having to cook (or knowing how to cook), and minimal clean-up. Furthermore, the price for shelf-stable meals can draw consumers looking for a less-expensive alternative to foodservice.

Restaurants are the most popular way to get a convenient meal, according to Mintel research, which found 7% of respondents claiming to have eaten restaurant fare six or more times in the previous week. Also, 23% of respondents have done so three to five times, leading to the conclusion that a level of convenience (beyond simply heating a can or opening a box and boiling water) is a vital key in choosing a meal.