Until recently, the fresh produce sector managed to remain relatively unchanged by the evolving food market. While loose product had given way to more prepacks and some prepared fruit and vegetables had begun to make headway, it is only since the start of the Millennium that the prepared new fruit and vegetables sector has started to see real changes.
Sales of fresh vegetables in the UK rose by 13 per cent between 2000 and 2004 to reach a value of £4.1 billion. Sales are expected to rise by another four per cent in 2005, resulting in a market worth an estimated £4.2bn. Meanwhile, fresh fruit sales have also accelerated since 2002. In 2004, the UK retail fruit market was valued at £3.28bn, having increased by 10 per cent since 2000. Sales are expected to expand by a further four per cent in 2005, resulting in a market worth £3.4bn.
From 2002, there has been some acceleration of growth in the vegetables market as suppliers have begun to impose the strategies from the processed foods market more successfully in produce ranges. This has brought about a growth in branding utilising established premium and other retailer own-labels, exclusive products and more convenient options. Suppliers have also had success with trademarked varieties and promotional activity.
In terms of star performers, it is salad vegetables that have experienced some of the highest growth in the produce market. This is in part due to the success of the 2003 season when a particularly long and hot summer boosted sales of cold eating foods including salad ingredients. The cold-eating aspect has also contributed to a strong positioning for snacking and eating on the go, which has helped to boost the number of eating occasions.
The drift towards more specialist varieties, which are often pre-packed and premium-branded, has driven sales of tomatoes. The basic choice of standard, plum and cherry has now been superseded with a range of varieties that has added value to the market.
There are two main issues that are impacting on the market as a whole, which are in fact playing a significant role in most food sectors. These are convenience and health.
According the Department of Health, a third of people who do not eat vegetables say this is because it involves ‘too much effort’. With this in mind it is not surprising that he industry has focussed heavily on convenience. The pre-packs market has seen the benefit of strong branding and segmentation. Pillow packs and layered salads were one of the first parts of the produce market to successfully use this strategy and support brands.
In the green vegetable sector, trimmed prepared beans and seasonal promotions have raised price points. Products such as broccoli, beans and mange tout also have a presence in prepared and mixed vegetable packs due to effectiveness of adding green vegetables with other varieties, to improve appearance.
Healthy eating continues to be a major driver in the market, with the 5 A DAY promotion continuing to make headway. More suppliers have begun to label products to tie in to this consumption target.
Fresh fruit has been one of the star performers in the 5 A DAY campaign, with consumers finding it easier to incorporate into their lifestyles than vegetables. Most fruit can be eaten without the need for further preparation or cooking as it is portable, healthy and can be hand-held, all positive attributes for snacking or eating on the go.
The success of the 5 A DAY strategy is apparent in that the majority of respondents (55 per cent) are aware of the need to eat five portions of fruit and vegetables even if they do not always manage it, but only one in five claim to have mastered the target. The role of produce in weight loss is also recognised, fruit is often touted as a healthy snack alternative to chocolate and crisps, while filling up on vegetables at mealtimes is promoted as a strategy to cut back on less virtuous options.
As consumer lifestyles become more fluid and as the boundaries between traditional meal occasions become blurred, manufacturers have launched a number of formats that directly target the dashboard consumption occasions or appeal to those consumers who are looking to eat ‘al desko’. The exclusive consumer research found that some 24 per cent of consumers have purchased salad from a supermarket salad bar, that offer consumers a pick-and-mix approach to building their own salads, offering consumers the opportunity to control both input and portionability. This has the advantage of appealing to consumers who are trying to lose weight using different dietary regimes eg Atkins, GI or low-fat, where a one-size-fits-all proposition would not have such a broad base of appeal.
Towards the future, the health issue will grow in importance and healthy eating will continue to provide the main focus of activity. It is estimated that 30,000 people die from obesity each year and that by 2020 the death toll will top that from smoking, which presently kills 100,000 people. As the healthy eating debate amongst decision-makers and in the media continues to gather ground, the role of fresh fruit and vegetables as part of a healthy balanced diet is likely to become more important.
Healthy eating is an accessible theme for all parties in the sector from producer groups to retailers. In addition this will tie in with themes from government and other sources. The 5 A DAY promotion is likely to see further investment through the Food Standards Agency as well as retailers and suppliers. In addition, prepared produce must position itself as a hybrid with the quality of fresh and the convenience of processed.
The fresh produce sector has had to work hard to build value. While consumer knowledge about types and varieties is growing across many products, interest in aspects such as source and origin has been limited.
Organic produce also continues to thrive, although it has to share the spotlight with other issues such as local sourcing, food miles and fair trade. A range of fruit and vegetables has been brought to the market addressing the various categories of demand, adding a further tier of differentiation.
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