AHDB: Demand for frozen red meat gains share
While the increase in spend will have been heightened due to food-price inflation, volumes sold increased by 537k kilograms (1.4%) YOY and were also up 1.3% versus pre-pandemic levels (12 w/e 21 April 2019). The cost-of-living crisis has impacted consumer purchasing patterns, with consumers switching to frozen red meat due to its lower price point at £4.83/kg, on average 39.2% cheaper than its fresh counterpart.
Overall, volumes of frozen beef and pig meat purchased in supermarkets have bucked the general trend, seeing YOY increases despite the declines seen for fresh and grocery volumes. Nevertheless, frozen lamb has seen declines. Yet, year-to-date (YTD) imports of carcases, primal and primary frozen cuts of red meat are down YOY, especially from the EU for beef and pork (HMRC, Trade Data Monitor LLC).
Frozen beef accounts for 12.7% of total beef volumes and is gaining share, as in the 12 w/e 16 April 2023 (Kantar), total volumes of frozen beef sold increased slightly (+1.8%, 303k kg) YOY. While only marginal, this has taken volumes from more expensive, fresh beef which saw declines.
Growth in frozen beef was driven by ready meals and added value products. Purchases of frozen ready meals rose by 8.8% (558k kg) YOY, slowly increasing over the last 18 months. Frozen beef ready meals accounted for more than half of all growth in frozen beef as these still remain one of the cheapest beef products, and shoppers are also increasingly looking for convenient meal options. Frozen sous vide volumes were up 54.1% YOY.
However, sales of processed frozen beef fell by 5.4% and frozen primary beef was down 24.2%. Frozen mince saw the largest decline of 441k kg (-25.3%) YOY. This shows shoppers’ drive for value as fresh mince is in growth and is currently £0.34/kg cheaper than frozen. Therefore, with mince generally being a cheaper source of protein, and a sizable minority of people seeing chilled/fresh food as better quality than frozen (Mintel's Report Attitudes towards Frozen Foods - UK, 2021), this has increased fresh mince sales. Frozen burgers and grills also saw volume declines of 5.5%, the second largest contributor to falling volumes.
YTD (Jan-Mar) frozen beef imports totalled 17,550 t, with imports for the first quarter down 19.9% (-4,360 t) YOY and also on the 5-year average (HMRC, Trade Data Monitor LLC). Since the EU dominates exports of frozen beef to the UK, notable YOY declines in imports from Ireland, Germany, the Netherlands and France have driven this overall decline.
Looking at products specifically, only imports of beef carcases saw YTD imports increase (+20 t) YOY, as frozen carcases may have gained volumes from fresh carcases which saw losses. However, this only makes up a small proportion of imports. YTD boneless and bone-in beef saw large declines of 19.7% (-4,220 t) and 35.1% (-160 t) respectively compared to the same period in 2022. While overall frozen beef purchasing volumes have increased so far this year, the reduction in imports reflects the expected reduced consumer demand for beef for the full year as food-price inflation leads to trading down to cheaper proteins.
Frozen pig meat volumes have also increased, by 3.1% (501k kg) YOY for the 12 w/e 16 April 2023 (Kantar). This may have taken volumes from more expensive, fresh pig meat which saw declines over this period. Overall, this has led to a YOY increase in the proportion of frozen pig meat that makes up total pig meat volumes, now at 7.8%.
The increase in pig meat volumes was mainly due to a 4.7% (402 kg) rise YOY in processed pig meat purchases. This growth was driven by a 9.6% increase (682k kg) in frozen sausages. Sausages remain the product with the largest frozen pig meat sales as they are a staple, one of the cheapest pig meat products at just £2.84/kg, and their discount to fresh sausages has increased over the last year. Moreover, sales of frozen burgers and grills have been increasing since the start of 2022, and this has continued with volumes 42.5% (139 kg) greater YOY. Therefore, this reflects consumers increasingly shopping on a budget, for frozen, processed products to help save money.
However, some categories, such as bacon, gammon and sous vide, have continued volume declines seen over the last two years. For the latter two products, this may be because they are more expensive than their fresh counterparts.
A similar story was seen in frozen pork as YTD imports fell by 6.9% (-1,450 t) YOY to 19,460 t according to HMRC data compiled by Trade Data Monitor LLC. This was mainly due to reduced volumes from Germany, Spain and Poland, although imported volumes grew from the Netherlands, Denmark and Ireland. This declining trend is likely due to tight EU supplies as production is forecast to decline by 5% in 2023 due to a fall in breeding sow numbers and high prices, which have reduced the EU’s export competitiveness. Yet with consumer demand for cheaper, frozen pig meat products, this may be limiting some of the export decline.
Following a 19.3% (-532 kg) YOY decline in frozen sheep meat sales (Kantar, 12 w/e 16 April 2023), frozen volumes now only make up 10.4% of total sheep meat sales, compared to 12.7% a year earlier. Therefore, declines in frozen sheep meat sales have outpaced those of fresh volumes.
This decline in purchasing volumes can be partly attributed to frozen ready meals, which saw a 31.5% (-224k kg) drop YOY. Sous vide also saw a fairly substantial drop in volumes of 35.8% (-145 kg). This followed the trend of declining purchases over at least the last 18 months for both products as prices have increased. With lamb being the most expensive protein of the three, we have seen shoppers reduce their lamb consumption and purchase cheaper proteins like beef and pig meat.
There is no exception to the general trend for sheep meat imports, with YTD volumes falling by 32.1% (3,640 t) YOY, and also compared to the 5-year average, sitting at just 7,690 t (HMRC, Trade Data Monitor LLC). This was driven by imports from New Zealand and Australia, the UK’s two largest international sheep meat suppliers, falling by 25.1% (-1,600 t) and 54.0% (-1,940 t) respectively YOY. This points to a return to the declining trajectory of UK sheep meat imports, following growth in 2022. A combination of continued recovery in New Zealand exports to China, against a backdrop of declining New Zealand production, will be important market drivers, as well as pressure on consumer demand domestically.
Over roughly the same period, volumes of frozen lamb sold in supermarkets fell, which will have contributed to the YOY decline in sheep meat imports seen for most product categories. The most significant drops in volume terms were seen for imports of boneless lamb (-1,510 t, -45.2%) and sheep legs (-970 t, -20.6%).
With frozen red meat often being cheaper than fresh versions of the same products, they provide a budget-friendly version with the benefit of added convenience. Food-price inflation is causing consumers to seek to spend less on food and cook their own meals at home more often. This provides opportunities for more frozen red meat products to be offered at promotional prices, especially as less frozen red meat than fresh is sold on promotion, at just 22% compared to 26% (Kantar, 12 w/e 16 April 2023). With the pandemic highlighting the importance of having a well-stocked freezer, increasing the prevalence of recipe inspiration on displays and on packaging could help to boost consumer demand.
A further opportunity lies in the green credentials that frozen meat possesses, considering red meat can be preserved longer by freezing – thereby helping to minimise food waste along the supply chain and in-home, a key issue at present. Highlighting these claims on packaging could be key to attracting the environmentally minded consumer to purchase more of these products, especially as the environmental impact of food is becoming more important for shoppers.
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