In a report published last month, the market researcher placed sales of frozen meals at $5.2bn, an increase of two percent since 2002 in current terms, but a decrease of 11 percent in constant terms. Pressures that have depressed the market include significant damage caused by the low carb fad between 2003 and 2004, added competition from alternate categories such as refrigerated meals, as well as the growing popularity of quick food service restaurants and take-out. However, according to Mintel there is still room to build sales within the category. The first major focus identified by the market researcher is new product development, which must provide a number of advantages to consumers, including: added convenience; less processing; effective diet solutions; higher quality; and more complete meals. In terms of convenience, Mintel provides the example of ConAgra's Banquet Pot Pies, which saw sales increase by $11m between 2005-2005, after the brand was adjusted to reduce cook time to less than four minutes. In addition, the report suggests that manufacturers should respond to a growing consumer demand for 'natural' or 'minimally processed' foods. So far this year, 11 percent of new frozen meals have an 'all natural' claim. "Taking an anti-processed stance could differentiate a brand in this space," said the report. For each of nine frozen meal brands investigated, at least two in ten Mintel respondents who eat frozen meals described that brand as being 'processed', a not-so-positive description in a consumer market that is supporting the growth of natural foods. Banquet (43 percent) and Swanson (38 percent) are the brands respondents were most likely to describe as being 'processed'. Another tool for new product development is a focus on "effective diet solutions", said Mintel. Almost 48 percent of single-serve frozen meal sales in 2006 were derived from health- and diet-related frozen meal brands. In comparison, in 2002 sales of such meals represented a third of segment sales. Meal solution systems that consumers can use for every meal (breakfast, lunch and dinner) to lose weight are one opportunity identified. "Considering how much Americans like to snack, the system could be based on five or six nutritious and filling 'mini-meals' a day," said Mintel. A "restaurant experience at home" could also be targeted as a new product development tool, in the general climate of consumers seeking out more premium products. According to Mintel, people are willing to pay more for products with better ingredients, more sophisticated flavors, or more authentic ethnic dishes. This is especially true of smaller, more affluent adult-only households. An example of a success-story in this category is Unilever's Bertolli Dinner for Two meals, said Mintel. These were introduced in 2004 and are said to be the "restaurant experience you create at home". They had FDM sales of $134m in 2006, excluding Wal-Mart. Finally, Mintel also stressed the importance of developing "more complete" frozen meal products. Through its consumer research it found that 65 percent of consumers that use family-size meals need to serve something extra together with the meal in order to fill their family up. "This suggests that some of the convenience sought after by using frozen meals is deflated by the need to supplement with other food," said the report. Another major field for focus in order to drive sales are markets with low penetration. These include children and individual ethnic groups. According to Mintel, the number of households with children is on the rise, and this opens up opportunities for brands that offer nutritious frozen meals for kids. Currently, there is only one major brand of frozen meals that is 'for kids', and it has shown good performance: ConAgra's Kid Cuisine represented 14.5 percent of ConAgra's FDM sales in 2006. This brand's sales have risen nearly 25 percent from 2002-06. Manufacturers also need to target Asian and Hispanic households with tailor-made frozen meals, suggest the report. According to Simmons NCS 2006 data, usage of family size/multi-serve frozen meals is lowest in Hispanic (26 percent) and Asian (23 percent) households, compared to black (46 percent) and white (42 percent) households. The same pattern follows with regard to individual frozen meals, it said. Current leaders in the US frozen meals market are Nestle and ConAgra, who hold 37 percent and 27 percent of the market respectively. Nestle's main brands in the category are Stouffer's and Lean. The company's sales grew almost 10 percent between 2004 and 2006. ConAgra's sales were up 6 percent since 2004, with its main brands being Banquet, Marie Callender's, Healthy Choice and Kid Cuisine. Mintel forecasts the frozen meals category will reach nearly $5.4bn by 2012, excluding Wal-Mart. This figure represents a slight growth in current terms (up 5 percent) but a decline in constant terms (down 7 percent). "Unexpected category innovations that offer more convenience and/or higher quality products would make sales higher than anticipated, as would successful marketing into lower penetration groups including Asians, Hispanics and children," said Mintel. "Conversely, if, in the future, the category receives significant criticism from medical professionals and/or nutritionists/dieticians for its 'processed' nature or sodium content, sales could be lower than anticipated."