Competitive pricing at the major retailers continues to drive value decline in salads, with lettuce leading the way via an 8.2 per cent value drop during the last year.
Total salads are now worth £1.6 billion following a 2.2 per cent value decline, while volumes rose by 2.3 per cent [KWP 52 w/e 3 January 2016].
“Volumes have been relatively strong this season, with fine weather resulting in good availability of crop and also resulting in steady consumer demand,” explains G’s marketing director Anthony Gardiner.
“UK retail pricing has been relatively low, as the major mults have slashed prices to match the limited-assortment retailers of Aldi and Lidl, resulting in increased volumes but at low value,” he adds.
With an emphasis on aggressive low pricing, it could be assumed that salad tiering is focusing on value products – but that’s not the case according to one supplier. Rebecca Quinney, business unit manager for salads at Evesham-based Wellpak, says: “Consumer demand for choice and premium variety options has ensured that retailers are extending their ranges to cater for added-value salads, despite tough retail conditions and aiming to reduce SKUs.
“Sales are healthy and we have had a good start to 2016 with higher orders than we expected.”
Meanwhile Gardiner believes there is still a “strong interest in differentiated products” from all retailers. “Everyone is seeking something new or special that has intrinsic shopper value, which helps set them apart from the core discounted products,” he adds.
Leading the way in branded salads, Florette says it has seen category unit sales rise by 4.1 per cent in 2015, with value sales up 2.1 per cent. “Our insight shows that this is due to increased shopper frequency and an extra 440,000 new shoppers having entered the category,” says outgoing managing director Neil Sanderson.
“Across the entire market we have seen price deflation as unit growth has moved ahead of value growth. This has resulted from an increase in the number of retailers attempting to win market share by driving volume through lower prices and promotions. In particular, mixed salads have been the most common product to drop into sub-pound activity.”
On the plus side, Sanderson says that ongoing competitive pricing will help to recruit new consumers to the category. “Singles were the strongest performing product in the sector, growing by 15 per cent with a market value of £18.7m, the most popular products being spinach and rocket,” he says. “We believe this growth was partly driven by the juicing trend, combined with the strong health positioning associated with spinach. In fact, its penetration increased by 14 per cent equating to 1.1m shoppers.
“Rocket gained distribution and average price as retailers increased in all stores and introduced larger packs of rocket at higher price points. With health being a priority for most consumers at the beginning of the year we expect to see this trend continue well into 2016.”
On the growing side, Quinney says “abnormally warm conditions” are affecting the salads market at the moment. “It’s caused early volumes and subsequently there are fewer kilos across main core lines now. The weather’s also had an effect on quality,” she explains. And it’s not just leafy salads that are feeling the heat. “Almeria has been experiencing pepper and cucumber supply issues and we are now seeing a shortage of tomatoes, too,” adds Quinney.
Callum Albrighton, marketing data analyst at salad supplier Freshtime, says supply of peppers and cucumbers is likely to tighten up in the wider sector through February – primarily driven by the Spanish weather. “Companies that do not have long-term supply agreements in place may see price increases and availability issues,” he explains, adding that one of the main factors affecting the wider salads market at the moment is the weather. “Recently the weather has been very wet and windy; this has an impact on the salad market as customers will not venture outside during their lunch break to pick up a salad if the weather is poor. Another factor affecting the salads market is the New Year. During the New Year, we see a sharp increase in the sales of grain-based salads as customers seek a healthy lunch. By the beginning of March, the sales of grains have dropped back off to their usual sales.”
Second-guessing the next big thing in added-value salads, Albrighton suggests spiralised vegetables might be one to watch. “Spiralised vegetables have become a real hit within the prepared vegetable market, as an alternative to carbs, such as pasta. It is therefore expected that spiralised vegetables such as courgettes will be seen in some salads in the near future,” he says.
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