Demand for dried fruit and nuts is rising in the UK this year, despite increasing worldwide demand coupled with poor harvests pushing up prices of many varieties.
According to Kantar Worldpanel data, the value of sales of dried fruits has risen seven per cent in the 52 weeks ending 30 October to £115 million, and nut sales have also gone up by 3.4 per cent to £315m in the same period.
Sales of certain nuts have risen considerably. Big selling varieties such as dry roasted peanuts have seen a sales boost over the past year, up 8.4 per cent to £20.7m. Sales of standard peanuts rose 13.7 per cent to £32.7m, while flavoured peanuts were up 31 per cent to some £16.7m.
However, some pricier varieties suffered as consumers defected to cheaper products. Brazil nut sales were down 1.5 per cent to £12.9m; cashew sales declined 6.5 per cent to £57.9m; macadamias were down 15.6 per cent to £2.5m; and pecan sales fell 11.1 per cent to £4.8m.
“Sales have still been pretty strong in the face of challenging conditions,” says Simon Melik, general manager of Besana UK, which supplies own-label dried fruit and nuts to multiple retailers. “The challenging conditions have been caused by a dramatic increase in raw material prices and that is primarily being fuelled by an enormous increase in worldwide demand, driven by the Chinese and Indian markets.
“The raw material prices are being pushed up quite dramatically, which means that we all have to be quite creative - buyers, sellers and retailers - in adjusting our offerings to enable us to put product on the shelf at a price that the public considers reasonable. Over the last two years, several raw materials have gone up by over 50 per cent, including Turkish raisins and sultanas. Many nuts have also risen even further, for example pecan kernels have increased 85 per cent and Brazil nut kernels 90 per cent, also in the last two years. So it is a strong increase.”
In addition to high worldwide demand, other factors such as monsoon rains in India this year caused cashew prices to rise three per cent while raisin prices rose six per cent in June as there was high demand for fresh grapes from wineries in the US [Mintec]. Meanwhile a poor US peanut harvest this autumn, estimated at just 1.8m tonnes by the US department of agriculture in an October report, is the smallest since 2006 and is likely to contribute to high prices. “Brazil nuts have experienced a wet harvesting period in early 2011,” adds Melik. “There was very heavy rainfall in the Amazon, which prevented some extraction of the raw material from the rainforest and affected the logistics of removing the raw material to the processing plants. There have therefore been shortages of Brazil nuts for processing, which has contributed to forcing prices up on that particular item.”
According to Kantar Worldpanel data, raisins and sultanas, the two biggest selling dried fruit varieties, both sold more this year than last, with value sales rising 8.2 per cent to £43.6m and 12.6 per cent to £34.8m respectively. However, similarly to nuts, other dried fruit varieties suffered. Dried cranberries were down 13.2 per cent to £3.9m; stoned dates were down 31.2 per cent to £442,000; and assorted dried fruits were down 13 per cent to £1.07m.
The figures show that while many dried fruit and nut varieties increased in value, nearly every variety declined in terms of volume. The big price increases worldwide prompted consumers to buy one per cent fewer nuts by volume over the past year. Macademia volumes were down 27 per cent; cashew volumes were down 14.2 per cent; pistachios were down 12.7 per cent and walnuts were down 19.6 per cent. This has been to the benefit of cheaper big sellers. Volumes of flavoured peanuts were up 30 per cent.
Similarly, 0.4 per cent less dried fruit was sold in the 52 weeks to 30 October than the year before. Even raisin volumes were down 6.6 per cent, although sultana volumes did rise three per cent.
Retailers and suppliers have had to be more creative with the formats they offer, says Melik. “Retailers are looking for innovation to keep the fixture interesting. There are many more NPD items on shelf such as granola mixes and nuts with natural spices being added to give the nuts more flavour.”
Besana has had to adjust dried fruit and nut mixes where certain ingredients have become more expensive. “It is to enable retailers to be as competitive as possible in their offering,” says Melik. “Whereas in the past you might have had a 50:50 mix, now you might have a 60:40 mix to incorporate the cheaper products at a higher percentage, but obviously still with quality at the forefront of what we provide and our customers demand,” he adds.
The trend for healthy eating is fuelling consumer demand, says Jennette Higgs, consultant for Food To Fit Nutrition & Dietetic Consultancy: “Over the last two or three years, there has been an increasing recognition that nuts can be very protective for health, both from heart disease and also weight management or preventing obesity. There is also an increasing recognition that dried fruit is a healthy snack. If you take 10 grapes and they become 10 raisins, the only difference is the lack of water. They do taste sweet but they have the sugar content of the 10 grapes they were produced from. It is actually the equivalent to fresh fruit in terms of health.”
Doug Thompson, category manager FNSS (Fruits, Nuts, Seeds & Snacks) at NBTY Europe, which owns Holland & Barrett and Julian Graves, says dried fruit and nuts were previously only bought as ingredients or by “health freaks”, but they have now become a more mainstream purchase for snacking. “This has led to a shift in what the consumer wants in terms of higher quality and consistency in ready-to-eat healthy snacks. New smaller format packs and mixes are making the products more accessible by adding functionality and convenience, without compromising taste. Infused fruits and seed mixes have helped drive both health and flavour to give more tailored products.”
An increased interest in baking has also boosted sales, he says. “It is now fashionable to bake using not just traditional vine fruit, but cranberries and blueberries for muffins, macadamias for cookies and pecan for pecan pie.”
According to Melik, snacking is currently the fastest growing area for nut retailers and this is reflected in the NPD being seen in dried fruit and nuts. “Snacking and snack packs for food on the move is really something that is receiving a greater focus,” says Melik. He cites Marks & Spencer, which has recently launched a range of Food to Go small pots of nuts and dried fruit “which are actually being displayed on the till points to encourage people to pick them up and snack healthily”.
Examples such as this show suppliers and retailers are working hard to compensate for high prices. However, the trend for increasing prices is unlikely to subside for some time. It takes between seven and 12 years for most of the major nut-bearing trees to bear a commercial crop, so even though the surge in consumption around the world has been recognised, prices are unlikely to come down for several years to come. -
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