[BizSights] The rise of frozen ready-to-eat meals business in the Philippines

4 days ago 3

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A generation or two ago, there were hardly any frozen ready-to-eat meals in groceries and supermarkets in the Philippines. When I used to live in San Juan, the only RTEs available were imported American TV dinners — commonly mashed potatoes, peas, and meat — in Unimart in Greenhills, San Juan. Not only was the taste suited for Americans or Westerners — they were way too expensive for ordinary Filipino households.

Not anymore.

Today, big supermarkets like the Gokongweis’ Shopwise and The Market; the Ng family’s Unimart; and the Sy siblings’ SM Supermarket have big freezers filled with various brands of frozen RTEs.

Frozen RTE meals of Purefoods, Cabalen, and Auntie Arnie’s are responding to families’ need for convenience: food that can be microwaved or steamed quickly and served in minutes. No cooking required (not even frying).

Several factors are behind this need. Through the years, more Filipino women have joined the labor force to help increase family income. With women at work, however, there’s less time to cook meals. Frozen RTEs have become an alternative, aside from buying takeout. The rise of dual-income families also expands the middle class, enlarging further the market for frozen RTEs.

In addition, wages of kasambahay-cooks have gone up, and many families also now find it much harder to look for cooks as the Philippines moves closer to attaining middle-income status. Frozen RTEs make it easier for families to cope with not having cooks in their homes.

With a bigger population of senior citizens, there’s also a growing market of people who have less energy to cook, and prefer to either order takeout or have RTEs in their freezers.

Wider market

I’ve been trying out a number of these RTEs and I’ve noticed that most brands cater to the upper-middle income and rich households.

One of the biggest players today is San Miguel Foods RTE meals under the Purefoods brand. Their RTEs are also the most visible in most supermarkets given San Miguel’s wide distribution network.

It currently has at least 15 RTE meals: Beef Pares, Bicol Express, Pork Binagoongan, Bistek Tagalog, Callos, Chicken Afritada, Chicken Pastel, Dinuguan, Kare-Kare, Korean Beef Stew, Lechon Paksiw, and Pork Humba. One of its new ones is its Corned Beef Brisket. Most of these are offered in 450 grams to 1 kilogram packaging.

Similarly, Auntie Arnie’s Philippines offers Orange Peel Chicken, Callos, Guinataang Langka, Yang Chow Fried Rice, Chicken and Pork Adoobo, Meaty Laing, Salmon Belly Paksiw. Auntie Arnie’s also mainly caters to upper-income groups with prices from around P210 (Yangchow Fried Rice) to P530 (Callos).

Gamechanger

A rising brand in the frozen RTE is Kitchen City, and it has the potential of being a game-changer in the frozen meal business.

Kitchen City is owned by Artemisplus Express Incorporated, a company that is now the main domestic business of Filipino billionaire Alfred Yao’s Macay Holdings. Yao is known for his Zesto-O brand of drinks and his ownership of ARC Refreshment Corporation, makers of RC Cola soft drinks.

Kitchen City is fast rising in the RTE business because of its price, its wide variety of RTE meals, and most important of all, taste. Their frozen meals business started in 2020 during the start of the COVID-19 lockdown, a new business that also saved the company from being badly hit by the pandemic as catering and office cafeterias shut down.

Kitchen City has 33 frozen regular meals, more than double that of Purefoods. It also offers 5 types of pasta sauces plus Baked Lasagna and Baked Penne, 5 different pies, and 2 desserts.

Another advantage of Kitchen City is that it in addition to its family-size packs (for 4 to 5 people), it offers a smaller size called Buddy Pack which is good for 2 to 3 people, ideal for empty nesters and couple-only families.

It also has rice meals for those who want to bring RTEs to the office. Their rice meals are available in 205 Lawson stores and in 36 Shell Cafés (as of December 2024).

Family-size packs range from the cheapest P250 (e.g. Laing with Pork Strips, Spicy Tofu with Oyster Mayo) to P575 (Roast Beef with Mushroom Gravy and Rosemary Marble Potato and KC Signature Beef Calderata).

The Buddy Packs cost between P135 (laing; spicy tofu) to P310. Two-person households and those in the lower-middle income groups could opt for the buddy packs, scrimp on the viand, and compensate by eating more rice.

In a recent interview with Rappler, Kitchen City president Ricardo “Jun” Abelardo, said KC’s motto of “Made Safe, Made Delicious” means delicious not just the taste but “delicious with your pocket.” He said KC is able to do this “because of the scale” of their operations.

[BizSights] The rise of frozen ready-to-eat meals business in the Philippines

KC is the Philippines’ largest “multisectoral food solutions provider” or with around 200 chefs. Prior to being acquired by Yao, it started in 1999 as an operator of small canteens but has since grown to providing food to hospitals, hotels, schools, office cafeterias (particularly Business Process Outsourcing companies). As of Decemer 2004, it had a labor force of around 2,500 people serving around 100,000 meals a day. It has been able to cater to 12,000 people in a 3-day event.

On July 29, 2024, it broke ground for its new commissary in Alabang, Muntinlupa City, which will allow it to serve 500,000 people, mostly in greater Manila, and delivering in south and north Luzon. One indication of the growth of frozen RTEs in the Philippines is the increase in revenues of KC which reached P2.69 billion in 2024, up 8.7% from 2023.

Abelardo said that with the capacity to serve half a million people per day, KC will be able to expand to carinderias (small eateries) and more households or its B2C (business to consumer) segment.

“We will be knocking at the doors of carinderias, restaurants, any food retail outlets, [we will tell them] that we can be their cloud kitchen. I can cook the food that they are serving especially if it’s not their specialty. Manang (the cook) does not need to wake up 2 am early, I can prepare the food, she can concentrate on selling and I will make sure that they will have a bigger margin and I can do that because of the scale [of KC],” he told Rappler.

For small families that have kasambahays, KC’s pricing, taste, and wider variety essentially means a household could be tempted to let go of their cooks.

As Abelardo said in a previous interview, “We don’t want this to be viewed as just another restaurant that will deliver to your house. What we really want to happen then is: we can replace your cook inside your house. That’s the general idea.”

Taste test

KC’s frozen regular meals now reaches groceries in the suburb where I live in Rizal province, and in the past two months, I’ve been able to try 21 out of its 33 frozen regular meals.

My recommendation is instead of heating KC meals via microwave, it’s better to heat the food via steaming. This makes the meals softer (especially for meats) and tastier. However, for KC’s rice meals (dishes that include the rice), microwaving is perhaps the only option for consumers, especially those who want to have it in their offices.

I also suggest adding ingredients to the regular meals, for example, adding fresh vegetables to the kare-kare, and shimeji mushrooms to the spicy tofu with oyster mayo. Garnishings such as green onions also help improve the look and taste of dishes such as the tofu and mushroom sisig.

Here are some of my recommendations:

Spicy Tofu with Oyster Mayo
Laing with Pork Strips
Tofu and Mushroom Sisig
Gising-gising
Pork Menudillo
Pork Bicol Express
Pork Dinuguan
Pork Binagoongan
Pork Menudillo
KC Signature Hawaiian Baby Back Ribs
KC Signature Beef Kare-Kare
KC Signature Beef Caldereta

KC has more pork dishes than beef and chicken since, as Abelardo told Rappler, “Filipinos love to eat pork.”

KC also has Plant-based Afritada, Plant-based Ala King, and Plant-based Strognaoff, but they’re not readily available in most outlets.

Aside from big groceries, KC now has a number of take-out stores in greater Manila area. It offers free delivery with a minimum purchase of P1,500 in Metro Manila and selected areas in Laguna close to where it operates and in Rizal.

Still a ‘small market’

For Japanese food lovers, I recommend Ajinomoto Philippines’ frozen gyoza and frozen karaage (chicken). The taste of these two meals are the closest to the gyozas and karaages I’ve tried in Japan.

Koichi Ozaki, president of Ajinomoto Philippines Corporation, described the Philippines’ frozen meals market as still being in its early stages.

“Thailand is our bggest market of Ajinomoto in Southeast Asia. The frozen market here is not big enough, it’s still underdeveloped so we import from [our facility in ] Thailand. Once the market becomes bigger, we have a dream to produce frozen food products here, but unfortunately, it’s still quite a small market, not yet mature,” he told ABS-CBN’s Market Edge.

As the country’s middle class expands, however, the Philippines’ frozen meals market will surely continue to grow. – Rappler.com