Sales of prepared meals turned slightly positive in 2015 after three consecutive years of decline, notching an increase of a little less than 1% on gains for both refrigerated and frozen side dishes, according to an executive summary on prepared meals, produced by Chicago-based Mintel in May. Category sales, however, remain below their 2010 level, reflecting more substantial sales declines for single-serve and multi-serve frozen meals, by far the category’s largest segments.

Consumers cutting back outnumber those eating more
While usage of refrigerated and frozen meals is high and relatively steady, consumers who say that they are eating fewer of these meals than a year ago outnumber those who report eating more. This downward bias in usage is consistent with weakening category sales in recent years, and may reflect consumer sentiment that prepared meals are often overly processed or lacking in nutrition, perceptions that competitors and associations are working to counter. For example, in May 2014, the American Frozen Food Institute (AFFI), McLean, Va., launched a national effort called the “Frozen. How Fresh Stays Fresh.” campaign to encourage consumers to take a fresh look at frozen foods.

Convenience is foundation
While the overall category prepared meals category caters to an increasingly wide variety of tastes and dietary preferences, convenience remains the category’s most essential benefit. Nearly half of adults who eat prepared meals do so because they’re quicker than cooking from scratch, and nearly as many find prepared meals useful to have on hand when they don’t want to cook.

For parents, keep it natural, make it easy
Interest in more nutritious options for children and prepared meals developed for children’s tastes is substantially higher among adults with children in the household than those without. However, all-natural ingredients are even more likely to be a priority, especially among those with two or more children in the household. Interest in a subscription service that delivers prepared meals to the home also increases with the number of children in the household, an indication that the importance of convenience and time savings only intensifies as the household grows larger and busier. Wholesome, natural meals and the convenience of regular home delivery could be a winning combination for parents.

Specific health priorities create targeted opportunities
While a move to more natural and less processed prepared meals is an effort to address general concerns over the healthfulness of the category, most consumers weigh at least a few more specific health priorities when selecting prepared meals and sides. The most prevalent of these are attention to calorie counts, sodium levels and fat content, attributes that have long been the focus of better-for-you brands and product ranges within the category. In addition, a wide variety of other considerations also factor into purchase decisions at increasingly substantial levels. Addressing these more narrowly defined dietary concerns and preferences is creating opportunities for smaller companies to gain a foothold in the category and for some larger competitors to widen their appeal through line extensions.

Variety, snacking, customization are key to reaching Millennials
Category users aged 18-34, who are likely to say they often don’t have time to cook, are more likely than older adults to report that they are eating more of most types of prepared meals than they were a year ago. Their interest in trying new prepared meals and sides makes them a key target for the category. Young adults are far more likely to eat smaller meals or snacks throughout the day, making them an ideal target for new prepared meal product and packaging concepts that lend themselves to single-serve, snacking and on-the-go eating.

Customization and creativity also represent opportunities to drive increased volume among young adults, who are especially likely to say that they that they like to customize prepared meals and sides by adding their own ingredients.

What it means
Weak sales results in the prepared meals category are in line with a broader move away from more processed foods in favor of fresher and healthier alternatives. Still, the category’s defining benefit of convenience remains compelling, and there is considerable opportunity for brands offering products made from natural ingredients and highlighting specific health benefits. Greater cuisine variety and packaging geared to snacking occasions could help to boost consumption, especially among young adults.