Cooking Ingredients and Meals: Half-Year Update H1 2022

July 2022

This half-year review of Euromonitor International’s Cooking Ingredients and Meals data provides analysis of the biannual update to Euromonitor’s Forecast Model (FM), alongside the quarterly update to the Macro Model, offering insight into the most important developments since October 2021’s annual update. Inflationary pressures and the impact of Russia’s invasion of Ukraine are bearing down hard across many key markets, and retail sales values have increased significantly as a result.

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Key findings

Edible oils suffers from a supply chain crunch, most notably sunflower oil

Edible oils is the category that has been most affected by the price hike within cooking ingredients and meals. The war in Ukraine has created supply chain shortages for sunflower oil in many markets such as India. This has forced the search for alternatives, including soy, palm and rapeseed oil but these are also seeing disruptions, exacerbating the situation.

Affordable meal solutions set to benefit from inflationary pressures

With consumers’ discretionary incomes reduced, sales of ready meals are set to slow down; in particular, categories like dinner mixes, which includes subscription meal kits, are expected to grow at a much slower pace than in the review period. This situation is expected to benefit more affordable meal solutions such as frozen ready meals and pizza.

Table sauces and sweet spreads also feeling the effects

Rising raw material costs and logistic fees are key reasons for the increase of prices in table sauces. Manufacturers like Kraft Heinz were forced to pass the price increases on to the consumer. In the case of sweet spreads, prices of honey are the most affected given a third of Europe’s honey imports were coming from Ukraine before the start of the war.

Potential growth of sales to foodservice likely to dampen

Inflation and raw material shortages have particularly impacted the availability of certain menu items and prices, causing narrowing revenue margins and the unsustainability of aggressive discounting strategies. Home-cooked food will likely return as a preferred choice, dampening foodservice’s potential return to growth in the aftermath of the pandemic era.

Cost-cutting offers longevity to survive tightening budgets

Major businesses have made several revisions in the first half of 2022 in an attempt to stagger price hikes. Long-term strategies include reviewing recipes to swap at-risk ingredients for substitutes, and streamlining portfolios to focus on products using similar ingredients in an effort to cut costs.

Introduction

Scope
About this briefing
Key findings

Cooking ingredients and meals: half-year update

Inflationary pressures underpin growth in 2022
The many layers of global inflation
Inflationary pressure bearing down hard on the cooking ingredients and meals industry
Industry impact: rising food commodity prices
India’s volume downgrade expected for 2022 almost reaches two million tonnes
The supply chain crunch of edible oils puts prices to record highs and results in shortages
Southeast Asian markets most affected by the disruptions of palm oil
Olive oil sales boosted as consumers pivot away from sunflower oil in Spain and Italy
Dinner mixes sales slow down while frozen ranges to be more dynamic than chilled options
A mustard shortage threatens in Germany
Shortage of ingredients puts price pressures on sweet spreads, most notably honey
Price hikes are a typical response to rising costs and volume shortages
Longer-term strategies include reviewing recipes and product offerings
Sales to foodservice unlikely to fare much better than retail as menu prices also increase
Key takeaways

Macroeconomic update

Slower economic growth and substantial inflation increases amid rising uncertainty
Supply chain problems and rising energy prices drive producer price growth
Real GDP annual growth forecasts and revisions from last quarter

About our industry forecast model

About Euromonitor International’s Forecast Model (1)
About Euromonitor International’s Forecast Model (2)
About Euromonitor International’s Macro Model
Data and reporting timeline: cooking ingredients and meals
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