The food-service industry will overtake the multiple-retail sector as the main customer for UK fresh vegetables in the next six years, according to John Giles of market analyst Promar International. He was speaking to more than 200 delegates at last week’s Syngenta Adas vegetable conference and warned that growers and packer-processors must develop their businesses to meet this growing demand in an otherwise static marketplace.
"The food-service sector is the only major growth area in food sales, running at four to five per cent growth a year," said Giles. "Whilst the retail market has been king, its sales are all but static. The major retailers are getting in to the food-service sector - a sure indicator of things to come."
Giles believes that this will mean demands for higher standards and quality and the need to reduce supply costs. "In the past many growers have viewed the food service sector as a secondary fragmented market picking up the pieces from the wholesale trade," said Giles. "The future will undoubtedly see the development of dedicated suppliers for the large-scale players, mirroring what has happened in retailing in the past 15 years.
"Only 10 per cent of grower businesses are dedicated to the food-service sector, whilst nearly 70 per cent are almost entirely geared to supplying the retail sector. There is huge profit opportunity for UK growers and packers to build the consolidation in the market."
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