Is the exotics category finally emerging from the tough trading period it was thrust into at the start of the recession? That is the question on the lips of many suppliers and traders as we head into 2010.
Christmas and the last three months in general have been a strong sales period for the category, especially compared to the year-earlier period and the first six months of 2009. With demand slightly dampened in the UK market over the last 12 months, plus oversupply from around the world, many traders have been focusing on their core strengths and working with key suppliers.
While the recent weather throughout the UK has made deliveries difficult and hampered trade a little, the general feeling in the exotics sector for the future is one of cautious optimism.
One insider says: “Trade was decent in the run-up to Christmas - better than in 2008. December in general was a good month and that sales trend has continued. Over Christmas things were fairly even throughout and there was a slight increase in all.”
Plenty more traders agree that the festive period brought a general uplift in sales. One fresh-cut exotics supplier says: “Year-on-year we saw an increase in sales… this is because we are able to offer a superior quality product in a highly convenient format ideal for the busy Christmas shopper. Prepared pomegranate traded very well, as did the larger pack trade-up items that one would expect to perform well. The competitiveness in the retail market also means that fuller ranges and maximum availability was a priority this festive season.”
Ken Reed, category manager for fruit at Wealmoor Ltd, explains that his company experienced strong seasonal sales across the total exotics category over the Christmas period, on both fruit and vegetable lines. “It’s fair to say that exotic produce sales - fruit in particular - suffered in the early part of the year due to the extreme economic conditions - likely to be true for most premium products,” he says.
“However, the whole market has recovered towards the end of the year, with overall decline levelling off and with some key products showing strong growth in the circumstances - for example, papaya up 20 per cent year on year. Sales were particularly strong for papaya and pomegranate, and on vegetables for sweet potato, butternut squash and chillies.”
Reed explains that exotic vegetables did not experience the same economic downturn as fruit and sales have remained buoyant across the category - they have a higher penetration than fruit and are now established as a core part of most consumers’ shopping repertoire, due to greater interest in cooking from scratch.
The New Year health kick is expected to drive sales as consumers look to shed their Christmas pounds, although more so in the supermarket sector than in the catering and restaurant sector.
“Exotic produce benefits from the New Year health kick with a much higher profile in food and health publications, as their focus is on lighter meals, healthy eating and lifestyle and consumers eat in more, as they watch spending post-Christmas,” says Reed. “Exotic produce gives consumers good value for money at this time of year relative to other produce. Consumers will also increase their fruit intake and are looking for more interesting tastes and textures, as well as health benefits, which they will get with exotic fruit.
“Pomegranates will continue to sell well as they are incredibly versatile, have great health benefits and have been supported by Wealmoor in partnership with POM Wonderful over the festive period with PR-based activity.
“Wealmoor has worked hard with growers over the last few years to ensure adequate crop availability, both in core seasons and during seasonal changes. This has paid dividends, as supply has been able to match increasing demand during this period.
“Wealmoor has a long track record in the exotics category and has continued to invest in previous difficult times and will continue to do so going forward, focusing on continually improving quality and availability and bringing new varieties to market,” adds Reed.
Having come off the back of what was generally a disappointing year, the trade is hoping for at least an upturn on 2009 sales figures. Generally the category is deemed to be in a far better situation than it was this time last year.
EXOTICS ON STEADY COURSE FOR NORBERT DENTRESSANGLE
Norbert Dentressangle Logistics UK firmly threw its weight behind the exotics category 10 years ago, when it decided to open a dedicated perishables handling facility at Heathrow Airport. Since then, volumes have really taken off, as Laura Gould discovers.
Norbert Dentressangle handles a whole host of exotic produce through its airfreight handling and packing facility at Heathrow, from wholehead products such as mangoes, papayas, passionfruit and dragonfruit, to a wide range of prepared fruit salads and prepared vegetable packs.
A large proportion of the produce handled at the hub is grown in Africa, but incoming volumes also originate from the US, South America and the Far East, particularly Thailand.
Mark Price, general manager of Heathrow operations, says: “The concept of the building was to bring in exotics and, in the last three to four years, we have seen more variety of products coming in.” Fruit medleys, including lines such as mango, pineapple and melon, have been a stand-out success for Norbert Dentressangle, along with pre-packed vegetables from Africa.
The end of October to Christmas was a “very strong” sales period, according to Price, particularly in comparison to the corresponding period in 2008 and the start of 2009. “The vast majority - 90-95 per cent - of our product heads to the major retailers in the UK, some directly from us and some through their own supplier network,” he explains. “Consumer demand picked up prior to Christmas and we saw an uplift in volume across all products.
“In the first six months of 2009, volumes were down, but generally our airfreighted exotic lines have been holding up well.”
Like all logistics operators, Norbert Dentressangle is under growing price pressure, especially given the economic climate. However, as Price stresses, although the pressure has ramped up in the last few years, “that’s what we are here for”. “Everything is about cutting costs from the supply chain as cheaply and quickly as possible, and we work with our suppliers to get product to the shelf with minimum wastage,” he says.
Norbert Dentressangle’s Heathrow hub offers a full range of services, explains Price, making it something of a one-stop shop for major customers. “We have a fully temperature-controlled building and fleet of vehicles and offer collections, customer clearance, DEFRA control clearance and packing work,” he says. “We have a quality assurance department and can check product to specialist specifications, as well as offering consolidated routes into the retailers.
“A lot of our customers don’t have a UK presence and so use us as a hub to supply their produce directly to the retailers - for example, from Thailand.”
So has the anti-airfreight argument that gathered pace before the recession affected volumes? Price believes there has been little, if any, impact. “There has been a drop-off in airfreight in the last year, but that has been more economic, as the products we handle are mainly non-essential,” he says.
“The debate on airfreight has now moved forward. Consumers want certain products to be available 12 months of the year and are not prepared to change their shopping habits too much. I also think that people understand that 99 per cent of our product flies in on existing passenger routes and that it also supports the economy and social communities in developing countries. I think people also understand the carbon footprint debate with regard to growing product in heated greenhouses as opposed to airfreighting and so on.
“The anti-airfreight debate was a concern for volumes but in reality, it has never come to fruition,” adds Price.
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