Rising ingredients prices are a big challenge for food and drink manufacturers in general. The problem combined with factors such as heavy retail control over pricing has resulted in consolidation in the ready meal sector, such as 2 Sisters Food's proposed acquisition of Northern Foods and Greencore's merger ambitions.
The competitive nature of the market has also led to producers attempting to diversify product ranges in an bid to appeal to a wider range of consumers. New concepts and whacky ideas for products are constantly being thought up. But retailers will move quickly to de-list a product if it does not move off their shelves fast enough, according to Neil Ashton, sales manager at equipment supplier Packaging Automation.
As processors jostle for position on the shelves, a number of new product development trends have emerged, such as the drive to appeal to consumers seeking healthier and more natural food products by displaying more of the meal contents.
Consumers and hence processors no longer want traditional end-load cartons where the meal is completely incased in a cardboard box, says Michelle Tatum, marketing manager at packaging equipment supplier, Kliklok International. Instead, sleeves that enable the product to be slid out and examined are in demand, she explains. Similarly, trays where each part of a ready meal can be put into a separate compartment are becoming more popular because they enable the consumer to see the individual components, says Torsten Giese, marketing manager at equipment supplier, Ishida.
Down the line
When companies are batting around ideas for new products and packages they do not always consider the difficulties they present, particularly in sealing, says Ashton.
New designs must be able to pass through production without being crushed, warped by heat or occupying unnecessary space when stacked, he adds. For this reason, he believes the traditional ready meal tray with a film lid will continue to hold dominance whether in square, circular or triangular shapes. Not only will a clear film provide content visibility, compartmented ready meals are almost impossible to produce in another fashion, according to Giese. Therefore, the basic tray and film seal design will remain and even continue to grow, he says.
Companies are looking for machines that can handle whatever is thrown at them, says Steve Malone, md of equipment supplier Proseal. For tray sealing, which Proseal supplies, manufacturers are demanding machines that can handle a wider variety of tray depths, Malone says.
As well as versatility, manufacturers are also interested in efficiency and line speed improvements. Producers are looking to streamline factories as there are no more external savings to be gained from ingredients suppliers, says Murray Hilborne, md of efficiency system supplier, Marco. Every saving that can be scraped out of production can become a matter of survival. Simple ideas, such as having more accurate automated weighing to reduce giveaway of valuable ingredients or sealing machines that use thinner film, thus reducing film use and energy consumption, are examples of improvements that producers can consider, says Giese.
Automation
Automation is another hot topic. Marco is aiming to simplify the equipment it produces so that workers need fewer skills to operate the machinery, says Hilborne. This would enable manufacturers to expand their workforce more quickly by taking on temporary workers at shorter notice, he explains. He adds that, as a result of interest in automation, Marco has seen 16% more growth from sales to ready meal producers this quarter, compared with the first quarter of 2010.
"The current attitude seems to be: 'Do it fast and take the labour out'," says Malone. Giese agrees. Simply adding people to a line will not increase speed, he says. Automation will improve speed but also reduce hygiene problems and reliance on workers that may be in short supply, Giese adds. "Because borrowing rates are so low, we're finding the smart producer is looking to invest in equipment and drop labour," claims Tatum.
But as automation increases, downtime becomes one of the biggest issues in ready meal production. It's all very well having a machine that can make 200 units a minute, but if it regularly breaks down and takes an hour to be repaired, the impact on average speed would put a manufacturer in a worse position than if he'd had a slower line, says Ashton. "That is the difference between making a lorry for delivery and getting hit with a fine by a retailer," he adds.
Quick changeover of tooling is equally important. Due to the increase in the diversity of products demanded by retailers, producers are running smaller batches with more numerous changeovers between them, says Giese. Technological innovations have helped to reduce changeover time. Automated tool changes cut downtime to approximately eight minutes, says Giese, adding that innovations in sealing mean lower temperatures need to be used, which allows tools to be changed without waiting for them to cool. Better machine design, with fewer nooks and crannies, also makes cleaning a quicker process, he says.
Testing new ground
Without doubt, ready meals manufacture, dominated by own-label production, remains a tough sector and only the strongest companies will survive. The supermarket conundrum defeats many manufacturers, says Giese. Retailers demand better hygiene standards and higher productivity through a wider range of products all of which could require capital investment by producers.
However, retailers will only offer short contracts that make producers wary of not recouping capital investments in time, he explains. This would mean that larger producers, which are capable of catering for a number of clients at one time should be safer and evidence of consolidation would lend credence to that. However, as companies grow larger, there is more wriggle room for new start-ups to gain a foothold, according to a report from market research firm, Mintel.
Md and founder of Stewed! ready meals, Alan Rosenthal spotted a potential opportunity and gap in the market between ready-made soups and ready-made meals. He quickly went from farmers' markets to being listed in supermarkets across the UK. Similarly, luxury pie makers such as Pieminister and Higgidy Pies have seen rapid growth and success since coming into the market, says Rosenthal.
While life in ready meals will continue to be tough, the success of new small entrants into the sector proves that there is room for something novel. But with margins tight, there is not much room for error.
Heat-seal to fatten up the profits
New heat-sealing machines should help ready meal manufacturers protect their thin profit margins. By eliminating downtime and providing versatility with tray shapes and dimensions, the technology could make the difference between success and failure.
Both Packaging Automation and Proseal have launched new heat-sealing machines for ready meals over the past 18 months. Following consultation with retailers and manufacturers, they have come up with designs they believe meet the varied needs of ready-meal producers.
One of the main complaints manufacturers had was about machine breakdowns shutting down production. The two companies took different approaches to addressing this problem. Proseal opted for a preventative approach, providing the option of a monitoring link between its new GT3 heat sealing machine and the company, which enables engineers to run diagnostics. This facility also enables managers at the factory to collect data on the machine's performance, providing information on its overall efficiency, says Proseal md, Steve Malone.
In contrast, Packaging Automation went for a damage limitation approach. The Eclipse machine it supplies uses five separate tools to cut and seal film to trays. Since breakdowns are inevitable, says Packaging Automation, each of the tools has been designed to be individually removed and repaired separately, so that the machine can continue operating at reduced capacity, says Packaging Automation sales manager, Neil Ashton.
The Eclipse's light tools and in-built loading system also enables a two-minute manual changeover without the need for a loading jig when setting up for different products, Ashton adds.
Recent innovations have improved speed. The GT3 can handle products arriving in a steady stream, in batches with gaps in between, or in a random order through its three-dimensional positioning system. This allows in excess of 180 packs per minute (ppm) to be processed through its twin-feeding lane version, says Malone. Ashton says the speed of products going through the Eclipse has been increased by about 120% to 200ppm for the twin-feeding lane version.
While the GT3 is aimed at producers looking for high-speed production, the Eclipse has been designed to facilitate growth. With a single-lane being expandable to two lanes without the need for increased footprint or having to be sent away for major modification.
Both companies expect demand for modified atmosphere packaging (MAP) to grow and have designed quicker processes that eliminate the need for vacuuming out air before injecting gases. This speeds up the MAP process and makes it increasingly cost-effective.
Key Contacts:
Ishida 0121 607 7600
Kliklok International 0127 583 6131
Marco 0134 287 0103
Packaging Automation 0156 575 5000
Proseal 0162 585 6600
Stewed! 0203 355 6770