David Bosshart

Dr David Bosshart

Dr David Bosshart, chief executive officer of the Zurich-based Gottlieb Duttweiler Institute for economic and social studies, has published a number of studies on consumer, trade and marketing trends, as well as featuring in articles in publications including Time Magazine, Business Week, Wall Street Journal, Financial Times, Die Zeit, Die Welt and Het Financieele Dagblad.

Fruitnet.com spoke to Dr Bosshart about the impact of changing consumer behaviour on the European market for fresh fruit and vegetables.

FN: How would you sum up the current state of the European market for fresh produce, with particular reference to pricing and the dynamics of a market that is dominated, to a lesser or greater extent, by retailers?

DB: In the past we all tended to look at specialised segments, with the retailer as the master of dictating prices. But the future is about the whole supply chain, a comprehensive approach, and the consumer’s perception of value. Freshness is a mega-trend, and health will dominate the food sector more and more. That is why consumers need to understand pricing, margins and the context of changing demand. Cooperation and mutual understanding is crucial in a more and more volatile environment.

What impact do you feel the rise of the retailer in recent years has been having on the European market for fresh fruit and vegetables? What effect will its continued growth have on consumers in the next few years?

Supermarkets, hypermarkets and discount chains are basically all covering the daily needs of our consumers. That’s why they have been so extremely price-driven over the last decades. Everyday low and even lower prices has been their philosophy.
Retail used to be quite simple: get the best deal, sell it cheap and pile it high. Today we are living in a globalised context, with consumption patterns becoming similar everywhere, and therefore scarcity has returned. That is something new, indeed. So we need to focus on values – quality, organic food, local sourcing, taste, carbon foodprints, seasonality, health and so on. And freshness is a driver of this market, of course.
We need to re-evaluate food, and price is becoming just one factor among many others. In the future, retailing will be about the competition of values.

How do you expect the current economic crisis affecting some markets to influence the fresh produce sector in Europe?

Cheap food was based on cheap energy, cheap transportation costs and cheap farming, and driven by the rise of supermarket power. Fresh food is probably the most important element of food consumption, as it is closely linked to healthy food and has a positive image. We need to make clear that fresh food helps consumers to develop preventive lifestyles, and fresh food consumption needs reasonable prices. If we can switch from the idea of ‘selling products’ to ‘selling solutions’, that is to say services as added values, the changes might turn out to be positive.

How do you view the position of fresh produce suppliers in the short- to medium-term? What will they have to do in order to safeguard their position in the face of increasing retailer dominance?

It’s all about knowing how to better service the end user. The worst-case scenario is more regulation and more bureaucracy, which is already happening. How can we create a win-win-win situation where suppliers, retailers and end users understand that they are part of the same game? How many middle men do we need? How can we improve cooperation? As we might witness more business interruption due to global warming, it is also about being flexible and finding new solutions to deliver.

You mentioned during your recent presentation at Fruit Logistica in Berlin that companies should be trying to make fresh produce a more “sexy”, premium product. How do you suggest they go about achieving this? What needs to change?

In this case, many are already going in the right direction. It’s about improving communication. If you look at store layouts, it’s very often the power of fresh – especially with the colour of green, vegetables, salads, apples, etc – that creates an immediate wow effect for consumers. It’s the first impression that counts. That helps to leverage the image of a store brand and of the retailer.

In an aging, western consumer world, food replaces sex, or to put it in less dramatic terms, food is sexy, because it it about seduction, taste and feel-good factors.

Do you think it’s realistic to think that consumers might begin to treat fruit and vegetable in general as a premium product? Why?

Absolutely. All of our studies show that health and wellness are the most important issues. And these things are here to stay. Fruits and vegetables are both healthy, they are less energy intensive than meat and so more ‘neutral’. Freshness is passionate, fun, easy to access and to consume, and, most importantly, connects people. It provides pleasure at the communal table; it’s not about the lonely consumer, it’s about sharing pleasure, or as the French say, ‘l’aspect convival’.

If it’s fresh and from the neighbourhood, it’s even better. A fresh, locally sourced tomato – what is better than that? We enjoy food in the restaurant and when we entertain our friends at home. This will help to leverage the image of fresh food as healthy, entertaining, sharing pleasures. But suppliers and retailers need to communicate that better, of course. Generic advertising campaigns for fruit and vegetable will be important and, again, it will depend on new ways of cooperation and creating win-win-win strategies.

In Berlin you also identified some of the top trends for retailers in 2008. Could you please summarise what these are?

First of all it’s health and wellness; it’s about improving personal lifestyles. Then it’s convenience, particularly at times of stress and daily pressure. Thirdly, we have global warming and climate change. Then comes food safety, which means building trust.
Fifth, it’s catering to an aging population. More ethnic food for more and more immigrants – that’s number six. Next is local sourcing. And it’s still about prices consumers understand as reasonable.

How well do you think retailers are reacting to these trends? What more needs to be done?

You know, can you change human behaviour? I’m sure you can, but it’s a question of corporate culture, of leadership and common sense.