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.

Out of the Pasta

That being said, complete packaged dinner mixes and canned or jarred pasta remain popular, each used by more than six in 10 households. Shell-stable pastas remain the category's second-largest segment, though constant dollar sales have dropped more than 8% since 1998. One of the segment's leaders, Campbell Soup's (Camden, N.J.) Franco American line has seen its sales steadily drop.

However. the segment's sales did level out in 2003, and the segment may have hope in the form of some promising products that debuted in 2003. ConAgra's rollout of Chef Boyardee Stuffed and Homestyle in 1998 and 1999 led to the segment's only growth in 1999, but both were in decline by 2001. Chef Boyardee Mini Bits and new Twistaroni flavors such as Nacho Cheese and Chili Dog began to build sales in 2003, leading the segment to hold steady that year.

Direct competition may come from outside the segment, as Unilever's (Englewood Cliffs, N.J.) Ragu Pasta Express launched in 2001 and may well be a factor drawing sales from shelf-stable pastas. The microwaveable Ragu registered $20 million in sales in 2002.

Mintel fears the segment may be too rooted in the consumer mind as a children's meal. Campbell attempted to broaden the market with Franco American Superiore, canned pasta appealing to teen and adult tastes. However, the product did not achieve strong long-term sales.

Getting Chili

A few brands of prepared chili are building sales, though the majority experienced no change or declines each year. Marketing and expanding the reach of more-regional offerings can benefit the products; but overall, many consumers do not notice the products in the wake of newer, more heavily promoted food items. Constant-dollar sales of prepared chili stood at essentially the same level in 2003 as in 1998. "The forces at work on the chili segment," Mintel asserts, "appear to be a conflict between consumers' desire for quick and easy to make foods and taste for spicier foods on the one hand, and their tendency toward disenchantment with older products on the other."

One company attempting to breathe new life into its longstanding line of products is Campbell. Under pressure from investors to reinvigorate its brands, the company already has revitalization efforts underway in soup, its Pepperidge Farm cookies and crackers and Pace salsa, and has plans to move on to its smaller brands, which likely would encompass Franco American pastas.

The category, as a whole, experienced sales declines during the last two years under review. Mintel attributes this to the majority of shelf-stable products not having changed significantly in decades. Any innovative introduction has the potential to be a growth driver for the category.

Mintel predicts sales of shelf-stable meals will decline 3% in constant prices through 2008, though the performance will not be the same throughout all of the various segments. Macaroni and cheese is expected to increase 11%, and prepared chili should jump 5%. Other segments, however, will not fare as well: a 26% drop is predicted for shelf-stable pastas; a 1% decline for microwaveable packaged dinners; and a 14% fall for prepared dinners/entrees.