North American Prepared Salads Growth Outpacing Europe

Fresh Express and Dole bagged saladWestern Europe has been the largest market for prepared salads, but North America is now gaining ground, according to new data from Euromonitor International.

Prepared salad sales in North America totaled over $4 billion last year, compared to Western Europe's $4.8 billion (including $2 billion in the U.K.). Furthermore, EI predicts that percentage constant value growth in the North American prepared salads market will outstrip Western Europe's by more than two to one during the 2007-12 period.

Global sales of packaged salads totalled nearly $9.3 billion in 2007, having grown by nearly 150% during the preceding decade (at a CAGR of 10.7%), according to the data.

The combination of convenience and health appeal is the factor driving growth both domestically and overseas. With global obesity rates continuing to rise (growing from 13.8% to 15.6% from 2002 to 2007), governments and health organizations are doing much of the marketing for the category, EI points out.



"The World Health Organization attributes approximately three million deaths a year from cardiovascular and other diseases to inadequate fruit and vegetable intake, making it a risk factor almost as deadly as tobacco use or unsafe sex," according to the report.

In the U.S., the government's "Healthy People 2010" campaign, launched in 2000, set 10-year targets for improving Americans' health, including raising levels of fruit and vegetable consumption. (Although halfway through the campaign in 2005, a study found that just 27% of adult Americans were eating vegetables at least three times a day.)

Another factor driving growth is manufacturers' efforts to extend the market by improving the quality of meats and cheeses in their offerings and positioning prepared salads as a meal solution for dinnertime, or a meal in itself, rather than just a quick lunch or a side dish, EI observes. One example is Sara Lee Corp's Hillshire Farms Entrée Salads, introduced in early 2007.

In addition, some food processing techniques now used in prepared salads, such as blanching (which inactivates degradative enzymes in the plant tissue) not only increase longevity, but kill pathogenic organisms on the plant's surface--appealing after the many vegetable scares in the U.S. in recent years. This has created opportunities for prepared salad manufacturers to market their offerings as safer than their home-prepared counterparts, which use "untreated" ingredients, EI points out.

However, the analysts also caution that the market for prepared salads is somewhat vulnerable in the current economy, compared to packaged foods.

"A highly discretionary purchase even at the best of times, an increasing number of consumers are likely to choose to make their own salads, rather than buying prepared ones, as their disposable income is squeezed by increased mortgage repayments and accelerating price inflation," they note. In addition, with the price of produce rising sharply, manufacturers could find margins being squeezed as it becomes more difficult to pass cost increases along to consumers.

Still, EI describes the medium-to-long-term outlook for the category in both North America and elsewhere as "vibrant": Sales in developed markets should rebound strongly as the obesity epidemic worsens, and new opportunities will emerge in developing economies as they adopt Westernized diets and experience concomitant health problems.

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