STUDY SAYS FUTURE OF SHELF-STABLE MEALS HAZY 2004-05-17 (1)

STEPHANIE FAGNANI

CHICAGO -- The future of certain shelf-stable meal categories is uncertain as shifting demographics in U.S. households and low-carbohydrate diets threaten to adversely affect the overall segment, according to a new report from Mintel International Group here.

In the foreseeable future, households containing baby boomers with an empty nest and young adults without children are expected to multiply. The lack of children in a home often means less shelf-stable meals like macaroni and cheese make their way into consumer's pantries.

To that end, Mintel predicted in its "Shelf-Stable Meals, U.S. Report" that overall sales of shelf-stable meals will decline at an inflation-adjusted annual rate of 0.6% through 2008.

However, the study also suggests that consumer packaged goods manufacturers can cater to shrinking households by developing more products that offer smaller portions. For example, Kraft Food's Nabisco unit plans to roll out a product called 100 Calorie Packs in July. These portion-controlled versions of popular Nabisco cookies and crackers, including Cheese Nips, Wheat Thins, Oreos and Chips Ahoy, will come six to a box, all measured out at 100 calories each with between two and three grams of fat.

"Portions are very important, and I think that's the next wave that's going to whack us," said Phill Schneider, vice president of Center Store at Big Y, Springfield, Mass. "We're already at the point where one low-carb ketchup is enough, one low-carb barbecue sauce is enough. People will just eat less of what they like. If you used to be a three-scooper, you are now a two-scooper," he said.

Yet Mintel predicted the low-carb craze will continue to impact the shelf-stable arena in more ways than one.

When viewed by category, there is a marked difference in future sales potential. Sales of shelf-stable pasta are expected to decline by a predicted inflation-adjusted annual rate of 5.8% from 2003 through 2008, and to drop by 26% at constant prices during the same time period, Mintel reported. Of course, the low-carb trend as well as overall concerns about eating healthy are primarily to blame.

Conversely, shelf-stable meal items like chili that don't contain high levels of carbs are expected to maintain a steady sales flow, increasing sales by 17% at current prices and 5% at constant prices through 2008.

So far at Food Lion, Salisbury, N.C., the status quo is being upheld with category managers reporting no significant decrease in sales of shelf-stable meal products. "Part of the reason may be that these items are often served as 'kid food,"' Jeff Lowrance, spokesman, told SN.

The kid in all of us will have an impact on future shelf-stable meal developments, Mintel claimed. While product innovation is good and necessary, maintaining an element of basic flavors apparently may not be such a bad move. Despite all the new flavor profiles CPG vendors have created for popular food items, more than half of Mintel's consumer respondents reported they prefer the taste of the traditional products they grew up with, with 40% indicating that macaroni and cheese is one of their favorite "comfort" foods. In fact, that category ranked as the top-selling segment of the shelf-stable meal category, accounting for about 38% of the market in 2003.

Other top-ranking categories included prepared pasta like Chef Boyardee selections, microwaveable packaged dinners like General Mills' Betty Crocker Bowl Appetit, and prepared entrees like canned stews and hash.