Five Trends Shaping Cooking Ingredients and Meals

Value sales of cooking ingredients and meals (CIM) are expected to record 3.2% growth in 2022, driven by inflationary pressures and hybrid lifestyles as consumers spend greater time at home. Company strategies to manage inflation are a top priority, but they should also be focused on meeting consumer demand for health, functionality and plant-based, as well as in-home experiences that can help replicate restaurant-style meals and convenient solutions to aid the cooking journey.

Inflation surge results in consumers downtrading and impacts company strategies

As the world faces the effects of the pandemic, the war in Ukraine and rising inflation, the cost-of-living crisis is very much felt in the food industry, and the cooking ingredients and meals space is no exception. Edible oils is the most affected category, with a price increase of over 19% globally in 2022. Considering Ukraine and Russia are major suppliers of sunflower oil, disruptions in the supply chain have created a tight market. The supply chain crunch is also visible across other oil types, with droughts and worker shortages placing pressure on supplies of soy, palm and olive oil. Besides edible oils, prices are also significantly up across all other categories in the industry. In sweet spreads, the trend is driven by chocolate spreads and honey. One third of Europe’s honey imports stemmed from Ukraine before the start of the war, and Turkey, the leading hazelnut producer, which is a key ingredient in chocolate spreads, is suffering from a currency crisis that has affected its supply chain. The sauces category is also affected, particularly mayonnaise and mustard, which is largely related to the increased cost of eggs and the shortage of mustard seeds, respectively.

Inflation has resulted in lower brand loyalty by many consumers and shifts towards value-for-money alternatives, while SKU rationalisation and reformulation are among company strategies followed by CIM players to address these challenges.

Innovation around positive nutrition and functionality remains pivotal

Health and wellness remains a pivotal trend in cooking ingredients and meals, representing a key area of development for manufacturers in line with consumer priorities. Organic remains the claim with the highest penetration, especially in edible oils and sweet spreads, followed by no GMO (genetically modified organism), which is particularly relevant in edible oils – driven by corn oil – and in ready meals.

Many CIM categories tend to be perceived as heavily processed, especially in ready meals and sauces and dressings. Health claims can benefit consumer perception and opportunities abound in this context as they still have low penetration in these categories.

Restaurant-at-home strategies necessary to win in line with hybrid lifestyles

Global foodservice volume sales of CIM are valued at 38.2 million tonnes in 2022, which is lower than pre-pandemic levels at 41.2 million tonnes (2019). The following years are expected to see a recovery of this channel which will place pressure on retail sales, especially with the growth of ghost kitchens enabling consumers to eat restaurant food at home. Together with the cost-of-living crisis and hybrid lifestyles, this means that consumers are spending greater time at home, offering opportunities around in-home experiences that can help to replicate restaurant-style meals. This trend brings opportunities to ready meals, seasonings to achieve exotic flavours, and more personalised recipe kits.

Convenience is paramount but in fresh and chilled formats

Cooking fatigue and time-poor lifestyles will make convenience a long-term strategy to win in the industry. Consumers continue to demand convenient solutions that can aid the cooking journey, with options that are ready to eat and simple to assemble gaining ground. In line with this demand, meals and soups is set to reach USD14.8 billion in absolute sales globally over the forecast period. Growth is mainly driven by prepared salads, chilled ready meals and soup. This trend highlights the freshness associated with these formats compared to other options with a longer shelf life. The exception is dried ready meals, whose strong performance will be driven by emerging markets, including China, India and Thailand.

Vegan and vegetarian options expand across the spectrum

Driven by health and sustainability, vegan and vegetarian options are growing rapidly across the globe. In this space, ready meals is the most developed category, especially driven by Western Europe. The sauces space is also seeing significant innovation. Although most products are vegetarian, there are opportunities for vegan options, where 9% of sauces, also driven by innovation in Western Europe, hold vegan claims.

From a positioning perspective, vegan claims are used the most in the industry, while many opportunities continue to use more holistic claims such as plant-based, which can resonate more with a broader flexitarian consumer base.

See our report World Market for Cooking Ingredients and Meals for more analysis on these trends.