Prepare for prepared foods: The US ready-to-eat market is set for growth

Working from home, technological advancements, and demographic shifts have led to a rapid adoption of convenience, hybrid cooking, an openness to new flavors, and evolving health consciousness. These changing consumer dynamics make the US prepared foods category well-positioned for an uptick in growth. Furthermore, years of high inflation add to consumers’ drive to look for food options to accommodate these lifestyle changes.

Retailers are realizing this potential and have called out the growth and premium margins in their earnings calls. Their investments in the space will help spur further growth. Retailer investments include, but are not limited to, factors to improve quality (such as packaging and sourcing), variety (such as more international dishes), health (less processing and cleaner labels), and the convenience of products (such as easier to heat and eat).

Ready-made meals (also called prepared foods) are at the confluence of these trends and are set for a compound annual growth rate (CAGR) of 4.4% (2% in volume terms) – reaching USD 108bn by 2030. This is a nice uptick in growth compared to a pre-Covid CAGR of 3.2% (1.3% in volume terms).

The category has many opportunities to develop, particularly in terms of quality, convenience, and optionality. The fresher end of the category will see strong growth – upward of a 10% CAGR. There are also opportunities for frozen ready meals, where sustainability (less waste) and the improving perceptions of frozen foods will help to drive growth.