The push into prepared meals by Australia’s major supermarkets with their own private label products is putting pressure on revenues in the growing category, according to market researcher IBISWorld.
While consumer demand for products in this category has increased over the past five years, industry operators have found it difficult to compete with similar products launched by Coles and Woolworths that have much lower prices and more favourable shelf space.
This has weakened revenues across the $607 million sector, according to a recent report authored by Bao Vuong. Even so, he is predicting annual growth of 3.2 per cent for the sector over the next five years as large operators build scale, and smaller players specialise in new niches.
The largest prepared meal makers in Australia are McCain Foods with 32.7 per cent of the market, followed by Simplot Australia and Lite N’ Easy maker Matchlow.
According to Vuong, the number of businesses in this market overall have increased over the past five years to 128, with many new entrants moving into niche specialties such as healthy prepared meals and other value added meal options, rather than competing directly with the largest players.