Sales Of Vegetarian Foods Are Predicted To Grow At A Declining Rate Over The Next 5 Years To 2010
A number of both positive and negative factors have impacted on growth in the vegetarian foods market over the past 7 years (since 1998/1999). The period of major growth was between 1999/2000 and 2001/2002, when annual growth rates by value of 12.2%, 14.6% and 16.6%, respectively, were achieved. However, recent growth has fallen to within a more modest range of between 6% and 8.6% a year, with the latest available data (for the 12 months ending November 2004/2005) showing growth of 5%. Nevertheless, this is still significant in comparison with the total food market.
Positive issues affecting the market include the Government's efforts to make the population more aware of healthy eating, and encouraging people to eat five portions of fruit and vegetables a day. Government figures have shown a reduction in meat eating (although this has currently stabilised) over the past several years, exacerbated by the bovine spongiform encephalopathy (BSE) and foot-and-mouth epidemics, and a growth in the eating of fruit and some vegetables. A further factor that is predicted to boost the market through more dynamic promotional activity has been the acquisition of the major vegetarian foods manufacturers Marlow Foods and Cauldron Foods by Premier Foods, and of Findus by CapVest. In addition, Heinz' Frozen & Chilled Foods division, and most of Unilever's frozen foods operations in Europe, are up for sale.
On the negative side, the number of vegetarians in the population has been in decline since 1999, after peaking in 1997. Nevertheless, continued growth in vegetarian foods sales supports the fact that the market has become more mainstream with maturity, with such foods purchased and eaten by many people who would not describe themselves particularly as being vegetarian. They might see themselves as meat reducers, or might be seeking healthier and more varied diets. Vegetarian foods are claimed to be lower in saturated fat, and contain higher levels of dietary fibre, minerals and vitamins.
Virtually all growth in vegetarian foods is in the chilled sector, which accounts for the major share of the market. Retailer own-label products are dominant here, and growth in chilled foods at the expense of frozen follows the pattern set throughout the food market. Over the past several years, there has been little increase shown in the frozen sector, which accounts for nearly all of the balance of the market. Two-thirds of this sector is represented by brands. There have been rises and declines over the past 12 months in the various segments within both the chilled and frozen sectors, namely ready meals, meal accompaniments, pastry products, sausages/burgers/grills, delicatessen products and ingredients.
The slow growth in frozen vegetarian foods supports the past and present actions of Young's Bluecrest, United Biscuits (UB), EQT, Heinz and now Unilever, in selling or putting up for sale all or part of their European frozen foods operations. These include the Linda McCartney, Findus and Birds Eye brands.
By far, the most important manufacturer in vegetarian foods is Marlow Foods, with its Quorn brand of chilled and frozen products. In addition, the company supplies for own label. Other important producers of vegetarian brands are Heinz Frozen & Chilled Foods, with the Linda McCartney range, Cauldron Foods and Haldane Foods. Smaller manufacturers in the sector are Unilever and Findus, both of which have some vegetarian products within their ranges, Dalepak, Goodlife Foods and Tivall. Many of these also make for own label.
Sales of vegetarian foods are predicted to grow at a declining rate over the next 5 years (to 2010), although there will still be noticeable value growth in the market.
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