US chilled prepared food market is about to take off, says Bakkavor USA as it unveils the Yaas! brand

US chilled prepared food market is about to take off, says Bakkavor USA as it unveils the Yaas! brand

The UK fresh prepared food market – in which Bakkavor is a leading player - is dominated by private label products, but there is a clear opportunity for national brands to carve out a significant slice of the rapidly-growing chilled food pie in the US, says Bakkavor USA.

Speaking to FoodNavigator-USA about the launch of Yaas! a new brand spanning hummus, dips, fresh soup and prepared meals, Bakkavor VP strategic business development Stephen Young, said: “The model that works for the UK - where private label really drives innovation in fresh prepared food and has an 80% share in some categories – does not apply in the US.

“In fact it is completely turned on its head in the US, where private label at the best retailers is not much more than 20%, and brands are really driving innovation in most cases. The retail market is also more fragmented, which is in part just a function of geography.

“In the UK we can deliver to a retailer three times a day, and retailers are delivering to their stores multiple times a day. The retailers are committed to 7-day a week distribution, whereas that is not always the norm in the US,” added Young.

“But it’s changing. US retailers are starting to offer a full spectrum of fresh prepared products and pushing the boundaries in terms of flavor profiles. Adding an Indian flavor, some interesting Asian flavors to the mix.  

“We realized that we needed to develop a brand in the US so we could drive the innovation we know we can create.”

‘Yaas is used by younger people all the time as a replacement for yes’

So why pick the name Yaas! which Young says does not reflect the Icelandic roots of Bakkavor’s co-founder Ágúst Gudmundsson, but simply means ‘yes’ with emphasis.

In part because “all the functional names are gone,” said Young, who said he’s pitching the brand to retailers now and expects to see it in stores by the end of the third quarter.

“If you want to name something with ‘fresh’ in there, there are 5,800+ trademarked names with the word fresh. Yaas is used by younger people all the time as a replacement for yes, so we felt that this was something we could build a brand around. Do you want fresh? Yaas! Do you want a clean deck? Yaas!

“The brand values around Yaas are nothing bad inside, a clean deck, using only ingredients you’d find in your kitchen cupboard. On price, it’s not super-premium but somewhere between mid-range and premium.”

The products in the Yaas! range “replicate our core strengths from the UK, things that have driven the fresh food revolution in the UK and help build that in the US,” added Young.

“So in hummus, for example, we’ll have a core baseline of products – a very good plain hummus, a roasted garlic hummus, but yellow pepper instead of red pepper, and we’ll explore other flavors like beet, sweet potato, and what we call the triple threat – three of the hottest hummuses you’ll ever eat for a party platter.”

Products in the Yaas! range include Spicy Pepper Hummus Bites, Teriyaki Chicken in a sauce made with black garlic, and Wellbeing Hummus topped with hemp and blueberry compote. 

‘We’ve finally got to the point where consumers are really starting to embrace fresh meal alternatives’

So what’s the size of the fresh prepared food prize in the US retail market? It’s enormous, said Young.

“Take fresh soup. It’s a $700m category growing at about 10% year on year currently, whereas the total soup market is a $5bn category. Penetration in refrigerated fresh soup in the US is only 12.8% and so here we’re looking at a category that has huge upside potential and it’s growing at double digits. And through our pedigree and our ability to bring something special to market we know we can bring something different.”

The US hummus and dips market, meanwhile, is still growing at around 8-10%, he claimed, adding: “Surprisingly, the market penetration is only 33.8% and it’s a $1.5bn market, so that’s $150m a year growth in a market with relatively low penetration, so there is clearly room for someone to come in and develop something different.”

As for chilled prepared meals, he said, “If you just look at premium chilled meals at retail, it’s about $400m and it’s growing at around 14% year on year, and we’ve finally got to the point where consumers are really starting to embrace fresh meal alternatives.”

A leading manufacturer of private label fresh prepared food in the UK, Bakkavor has been steadily building its presence in the US, acquiring Carson, California-based private label desserts business Two Chefs on a Roll in 2008 and opening a facility in Jessup, Pennsylvania, in 2010. It then acquired a second private label fresh prepared food manufacturer B. Roberts in Charlotte, North Carolina, in 2015, and is currently building a new facility in San Antonio, Texas, that will open at the start of 2018.

Beyond HPP

Asked about processing methods, Bakkavor is looking at HPP (high pressure processing) but is also looking at other technologies, he said. 

"There are other things coming down the pipe which we think might potentially replace HPP; we're not totally sold on HPP for what we want to create."

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