Owing to busy lifestyles and ageing population, modern convenience foods have become popular globally, and while some markets have faster growth rates when it comes to convenience food consumption, changes in current lifestyles are generally fuelling the trend.
The convenience food market is driven by busy lifestyles and the ageing population.
Convenience foods include processed foods that have longer shelf life and are easy to prepare. According to research firm Future Market Insights (FMI), major attributes that consumers look for in convenience foods are ease of use, packaging, nutritional value, safety, variety and product appeal.
These foods are prepared by adding various preservatives at specific conditions and few of them need an efficient supply chain and storage to retain their properties.
Convenience foods save cooking time and energy — whether at home, commercial F&B outlets and even hotel restaurants, where fast and hygienic food offerings are required. Advancement in food preparation technology and innovative packaging options have widened the food choices available in the various market categories such as frozen food, chilled food, packaged food, and more, explains FMI.
The research firm says the market has also been segmented by types of food, such as canned food, frozen food, ready-to-eat snacks, meals and chilled food. The market can also be segmented on the basis of distribution channels into supermarkets and hypermarkets, department stores, mom-and-pop shops, convenience stores and others.
When it comes to convenience food markets around the world, Pratima Maske, consultant – Food and Beverages Department at Future Market Insights, tells FoodBiz Asia that Europe is a matured market for convenience foods, whereas in the emerging economies of Asia-Pacific, the market is growing.
Maske attributes the growth in Asia-Pacific to a number of factors: “The increased working women population, a rise in opting for convenient food preparation, and an increase in in-home dining are fuelling the market growth.”
According to FMI’s latest findings, Asia-Pacific is expected to register double-digit CAGR in the next five years.
Maske adds that the US and European countries continue to show the highest demands for convenience foods, while China, India, Japan and South-east Asian countries are expected to report considerable demand for convenience foods.
“In the near future, the Indian market is expected to grow at a faster pace, due to [enhanced distribution channels] with respect to new product launches, as well as display and advanced advertising,” he says. “Ready-to-eat products are gaining special attention in retail stores.”
Indeed, increasingly more convenience stores are now offering not just the usual cold sandwiches and cup noodles, but also traditional hawker staples (as in the case of Singapore’s 7-Eleven outlets) such as chicken rice or chicken biryani meals — and piping hot too thanks to the products’ microwavable packaging.
But does existing on a diet of mostly convenience foods affect one’s health? While in the past there were questions about what nutritional values could be derived from convenience foods, today, clever marketing and promotions have increased the awareness of ready-to-go meals that meet regular nutritional requirements.
FMI’s Maske says that one reason for the growth of convenience foods in the emerging markets of Asia-Pacific is because of innovative and healthy product launches and availability of region-specific products — as can be seen in the local fare available at 24-hour outlets around Singapore or even sushi and sashimi bento boxes in FamilyMart outlets across Japan.
These products are sold with the help of innovative promotional techniques which attract consumers,” Maske explains. “Major players in the industry are launching new products and increasing their product portfolios with mergers and acquisitions of other players. Local vendors have been catering to the demand in a rather impressive way, giving consumers a choice of local flavours and cuisines.
Thus, with convenience food products continuing to carve their own place in the commercial F&B food chain, is it safe to say that the global market demand for convenience foods will continue to grow?
With rising education levels and more consumer awareness regarding nutrition labels, health-consciousness and nutrition tracking, growth will likely be more signifi.cant in Asia over the forecast period, says Maske. Increased westernisation and food consumption away from home will be the major drivers for APAC market growth over the next five years, he notes.
Lastly, the increasing demands for global convenience foods will also help to grow various sectors that support the F&B industry not just in the Asia-Pacific region, but beyond. These sectors include, among others, processed food manufacturing, packaging industry and distribution network.
However, Maske cautions that the increased demand for convenience foods may adversely affect the growth of fresh food products and the fast-food retail chain network, as consumers are looking for nutritional food prepared in production kitchens that meet the most stringent hygienic conditions.
FMI also reveals that pricing is another important factor for convenience foods; however, nowadays, consumers are ready to pay premium prices for quality convenience foods with health benefits. Some of the common strategies that companies have adopted in recent times are portion-controlled packaging, in-store promotions, mergers and acquisitions, and health claims in labels.
There is a growing trend towards healthy convenience foods that are rich in proteins, functional fibres, vitamins, probiotics and Omega-3 fatty acid. For this, many market leaders are integrating their operations by acquiring ingredient manufacturers to increase their technical know-how. Availability of customised food ingredients has become a boon for convenience food manufacturers as they can provide large varieties in each category, thus lessening the need to waste food.
Cheers offering ready-to-eat meals
In Singapore where most industries are running non-stop, round-the-clock work shifts are the norm. Thus the need for 24-hour convenience stores that provide basic necessities such as hot and cold drinks and on-the-go meals. Cheers is a local store chain that caters to the needs of this market. To find out how Cheers is growing its local on-the-go clientele, FoodBiz Asia’s Millette Manalo-Burgos asks Victor Cheong, general manager, Cheers Holdings Pte Ltd, for fresh insights.
How is Cheers positioning itself in response to the current market?
Victor Cheong: Singapore now faces a rise in the demand for convenience and on-the-go services, as students and working professionals lead increasingly active and busy lifestyles — often working, running errands and consuming their meals on-the-go. Many are also looking for quick meals which they can eat in the comfort of their home and with minimal preparation required, as they now spend less time in the kitchen. The industry is a fast-moving one, where goods and services have to constantly evolve to cater to the needs of customers.
As such, Cheers, a home-grown 24-hour convenience store, caters to a diverse group of customers from different walks of life, including the young and trendy, students and working professionals who lead active and busy lifestyles. Stores are situated across Singapore at convenient and high-traffic areas such as neighbourhood centres, bus and train interchanges and Esso service stations.
The industry possesses many opportunities for convenience businesses, but Cheers faces stiff competition from others that are also looking to offer quick options to customers. We address the challenge of staying relevant to customers by offering a wide array of services and upgrading according to new trends. This includes staying constantly vigilant, and pushing boundaries to offer customers the latest services that bring convenience to them. Some of these services include courier services, self-collection points for FairPrice Online and DHL, sales and top up CashCard and FlashPay cards, EZ-Link, iTunes, Google and Zalora gift cards, and even to remit money overseas via mCash.
Cheers aims to be the leading convenience chain store in Singapore. We are focused on giving customers a great experience while they shop, which is epitomised in an acronym formed by our name CHEERS — Cheerful, Helpful, Empathetic, Efficient, Reliable, and bringing Satisfaction and Smiles to our customers. At Cheers, we also believe that our format “Adds more to Life”.
How does Cheers determine which food offerings to sell? What are the usual bestsellers?
Cheong: As a convenience store, Cheers offers Ready-To-Eat (RTE) meals for time-stretched customers. One example is Treats, a private label under Cheers that offers greater value to customers. Treats was launched in 2011 to meet the needs of time-stretched customers. There are three RTE food categories under Treats, which are Pasta, Sandwiches and Rolls.
Popular items include Triple Deck and Egg Mayonnaise sandwiches, Chicken Burger, as well as pastas such as the Chicken Sausage and Ham Spaghetti, which are exclusive to Cheers.
In general, sales for RTE items in supermarket and convenience stores see a year-on-year increase of about 5%.
How does Cheers maintain the freshness of its convenience food offerings?
Cheong: Food safety and quality are of paramount importance to Cheers. We have in place stringent procedures and processes to ensure quality and safety standards are upheld. For example, cold chain management systems are in place for handling chilled, frozen and fresh grocery items.
Increased westernisation and food consumption away from home will be the major drivers for APAC market growth over the next five years.
Does Cheer plan to bring the franchise to other countries in the Asia-Pacific region?
Cheong: There are currently no plans to expand overseas as our priority is to serve our local community. However, NTUC FairPrice and its various stores, including Cheers, are continuously on the lookout for new market growth opportunities, so as to benefit our community.