READY MEALS IN COLOMBIA - ANALYSIS

Country Report | Dec 2021

KEY DATA FINDINGS Market Sizes

High levels of unemployment and falling wages adversely affect sales in 2021 Sales of Ready Meals
Ready meals sees 3% current value growth in 2021 to reach sales of COP192 billion, Retail Value RSP - COP billion - Current - 2007-2026
while volumes fall by 1% to 8,100 tonnes
Chilled ready meals is the most dynamic category in 2021, with current value growth
192 Forecast
250
of 5% leading to sales of COP106 billion
The average unit price of ready meals rises by 4% in current terms in 2021
200
Industrias de Alimentos Zenú SA remains the largest player in 2021 despite its value
share falling to 16%
150
Ready meals is forecast to see a 3% current value CAGR (-0.2% at constant 2021
prices) over 2021-2026
100
2021 DEVELOPMENTS
Small category undermined by economic conditions and an unhealthy 50
image
Ready meals remains a small category in the Colombian market, with demand largely 0
2007 2021 2026
limited to urban middle class consumers with higher incomes and access to these
products. Despite increasingly hectic lifestyles, and less time to cook full meals, most
Colombians still opt to prepare meals at home from scratch using fresh food.
Consumers typically buy ready meals in emergencies, or in the case of pizza, as a treat. Sales Performance of Ready Meals
This preference is informed by cultural factors. In many households, the main meal % Y-O-Y Retail Value RSP Growth 2007-2026
remains a time for socialising and spending time with family or friends, with food
preparation a key part of the process. The pandemic is unlikely to significantly change
this.
2.6% Forecast
20%
Ready meals saw positive volume growth in 2020 as consumers spending more time at
home, and often still working, looked for convenient meal solutions. However, in 2021,
demand is set to fall away due in part to rising prices in an uncertain economic 15%
environment with high levels of unemployment and falling incomes. Consumer
perceptions that ready meals products provide little nutritional value is also
undermining demand in 2021, as the COVID-19 crisis has served to strengthen the 10%
already established health and wellness trend, both because of the immediate threat
from the disease and awareness of the potential health effects of the sedentary
lifestyles and poor diets associated with periods of home confinement. 5%

There has been some response to this from a limited number of producers, with some
smaller companies selling better quality, healthier menus exclusively online. New 0%
freezing techniques that allow better preservation of food and maintain fresh flavours
without using preservatives or additives are also improving the health profile of these
products, and companies like Picsabores.com offer traditional Colombian dishes such -5%
2007 2021 2026
as ajiaco, along with a variety of soups and meals, that are plausible imitations of home
cooking. However, a very limited part of the consumer base is buying and consuming
ready meals in this way, and mass-aligned brands and products continue to struggle
with a negative image, as ready meals are broadly perceived as an unhealthy and over-
processed option by most consumers. The most popular types of ready meals are pizza,
tuna salads, and meat products, which are considered quick meal solutions, but not
something to always keep in the kitchen.

Growing competition as caterers reimagine themselves

During the COVID-19 crisis, typical ready meals products sold at brick-and-mortar stores
have seen competition from products that are not available at retail stores but sold and
promoted through social networks. Indeed, this trend strengthened in 2021. These
products offer the taste of home-made recipes and the convenience of a ready meal,
and are usually prepared by catering companies that reinvented themselves during the
pandemic when social events were banned. These meals are packed in vacuum sealed
pouches, and the food can, in some cases, be directly heated by submerging the
pouches in hot water. The appeal of this segment is supported by its provision of
healthier alternatives, diverse menus, side dishes, and fresh products that can be sold
chilled or frozen. In addition, the prices of such products are more appealing to
consumers than those of food delivery services. Oliva Va, Todos Comemos, Picsabores,
and Houstronomy are amongst the players active in this segment.

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Industria de Alimentos Zenú retains lead with wide-ranging offer Sales of Ready Meals by Category
Retail Value RSP - COP billion - Current - 2021 Growth Performance
Industria de Alimentos Zenú continues to lead the fragmented ready meals category in
Colombia. The company has a varied offer spanning most areas of ready meals,
Shelf Stable Ready Meals
including products such as canned meatballs, frozen lasagna, empanadas, and pizza. 58.0
The company’s rivals have more limited portfolios, with filled arepas being the most
Chilled Lunch Kits
popular product, but during the pandemic new players entered frozen ready meals, -
such as Dagusto, which competes with savoury pastries. The distribution of ready meals
Chilled Pizza
is mostly conducted through store-based modern grocery retailers and has not seen 1.4
significant changes during the CVID-19 crisis. The discounters channel is also displaying
Chilled Ready Meals
developments in ready meals, with leading discounter, D1, mostly offering frozen 105.9
meals such as lasagna, burritos, and ajiaco (a traditional Colombian soup), as well as
Dinner Mixes
other products from Asian cuisines, like teriyaki chicken with vegetables. This is 2.1
contributing to the democratisation of ready meals.
Dried Ready Meals
10.7
PROSPECTS AND OPPORTUNITIES Frozen Pizza
2.0
Challenging times ahead for ready meals Frozen Ready Meals
10.5
Ready meals is expected to see retail volumes decline over the forecast period. The Prepared Salads
issuance of regulations regarding mandatory black seals (Resolución 810 2021) for 1.1
products containing high levels of sodium, fat or sugar will have a negative impact on -5% 0% 15%
most categories of ready meals. Although companies in the market have been
preparing to adapt to the new regulations, changes in the formulations of products are READY MEALS 191.8 CURRENT % CAGR % CAGR
YEAR % 2016-2021 2021-2026
not necessarily a guarantee for success, as a new taste is not necessarily appealing to GROWTH
consumers. The strongest impact is expected to be felt in shelf stable products, dried
ready meals and dinner mixes during 2023 and 2024. In the particular case of pizza
(frozen and chilled), although these products will be impacted by the black seals
regulations, the most significant challenges will continue to come from consumer Competitive Landscape
foodservice, as pizza is one of the most popular products in the consumer foodservice
channel and delivery services have developed strongly.
Company Shares of Ready Meals
Little potential for development of prepared salads % Share (NBO) - Retail Value RSP - 2021

Although, in the midst of the COVID-19 pandemic, many Colombians looked to adopt Industrias de Alimentos ... 16.4%
healthier lifestyles, this had a negligible impact on demand for prepared salads. The Grupo Alimentario del At... 8.3%
variety of the product offer is limited in the category, which is mostly comprised of
Don Maíz SA 8.0%
products such as chopped lettuce and spinach. Moreover, the prices of packs of
prepared salads are high in comparison with purchasing all the ingredients needed for Arepas Doña Paisa de Col... 7.7%
preparation. This is likely to be an even greater deterrent in the context of the Productos Alimenticios L... 6.5%
economic uncertainty resulting from the COVID-19 crisis. With a broad variety of fresh
vegetables available during the year, Colombians are more prone to purchase what is in Seatech International In... 4.6%
season, which tends to come at affordable prices. The forecast period is not expected Productos Alimenticios D... 2.0%
to see significant changes in consumer habits related to the purchase of prepared
salads, or the entrance of outstanding players, with most of the offer remaining Kraft Foods Colombia SA 1.3%
unbranded. Pasta Pronta Ltda 1.1%
Colombo Española de Cons... 1.0%
Continued success for new business models focusing on home-made
Provisiones Macedonia SA 0.5%
food
Industria Colombiana de ... 0.5%
New business models focused on home-made food that is vacuum-packed and sold
Pastas V&V SAS 0.5%
frozen or chilled have surged and strengthened during the COVID-19 crisis and are
likely to continue to succeed during the forecast period. This segment offers a wide and General Mills Inc 0.4%
diverse range of products, addressing consumers’ desire for new flavours and providing Panamericana de Alimento... 0.4%
convenient meal solutions for busy consumers and small households, mostly in large
cities. It also allows consumers to plan complete weekly or monthly menus Tasca Spain 0.2%
(incorporating protein, carbohydrates and vegetables) in convenient portions, usually Lista Alimenticia SA 0.2%
single or double, at prices that are affordable, and in general lower than a similar meal
in a restaurant. The offer also provides an interesting alternative for those workers that Avesco SA 0.1%
take their lunch at the office. Key competitive claims of these companies that appeal to Other Private Label 18.9%
consumers are that the products are preservative-free and only take 10 minutes to
Others 21.3%
prepare. Their offer is, therefore, compatible with the two primary demand trends in
packaged food – towards health and wellness, and convenience. Advertising through
social networks such as Instagram and Facebook is key for these players to reach wider
audiences and online ordering will continue to be the main channel for sales.

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 Brand Shares of Ready Meals
% Share (LBN) - Retail Value RSP - 2021

Zenú 16.4%
Alamar 8.3%
Don Maíz 8.0%
Doña Paisa 7.7%
La Cajonera 6.5%
Van Camp's 4.6%
Doria 2.0%
Kraft 1.3%
Pastaio 1.1%
Isabel 1.0%
Macedonia 0.5%
Ronda 0.5%
Pasticheli 0.5%
Old El Paso 0.4%
Respin 0.4%
Tasca 0.2%
Lista 0.2%
Kokoriko 0.1%
Other Private Label 18.9%
Others 21.3%

5-Year Trend
Increasing share Decreasing share No change

© Euromonitor Interna onal 2022 Page 3 of 3