Produce Business UK finds out why big bags of ‘value’ fruit and veg are not necessarily the best way of targeting the UK’s ‘value-for-money’ shoppers
The rising popularity of discount retailers Lidl and Aldi is a strong indication that many UK consumers are trying to save money. And, as Produce Business UK reported in March, value-for-money consumers – namely shoppers who are on a budget and more likely to bulk buy – represent a solid 35% of the European [grocery] market in value terms.
Given the magnitude of this group, coupled with the success of discount retailers, it would be natural to assume the UK’s fresh produce industry is doing its utmost to sell large volumes of low-priced produce. The reality, however, is very different.
Changing shopping habits
While many British value-for-money shoppers may well be seeking bulk-sized bargains, it appears they aren’t necessarily doing this when it comes to fresh produce.
Norfolk-based salad potato grower Andrew Wortley explains that people are simply buying what they need, as and when they need it. “If people want baked potatoes, for example, they’ll buy just two baking potatoes,” he says. “We are not creating as much [food] waste, but it does mean that people are buying less.”
Martin Evans, chief executive of Freshgro and a Horticultural Development Company (HDC) board director, agrees that consumers are buying little and often. He says: “People are just picking something up on their way home. Perhaps the days of the £150-shop are gone.”
According to figures published earlier this year in The British Great Grocery Revolution by consumer insight specialist Kantar Worldpanel, it’s true that there’s been an increase in so-called ‘top-up’ shopping trips rather than visits to the ‘main shops’.
However, the report reveals that the most noteworthy change in consumer behaviour is actually the amount spent per basket during this type of shop run. Top-up baskets, according to Kantar, are getting bigger because shoppers are choosing to go to larger supermarkets, discounters and multiple convenience stores for these top-up trips.
And, just as the way people are shopping is changing, their diets are changing too. This, according to growers, could be another reason why shoppers are buying fewer pieces of produce at a time.
Kantar data published by the UK’s Potato Council last month (April 2015) shows, for instance, that baking potatoes are the fastest growing food to be eaten as part of an evening meal. However, consumers are shying away from meals that take some time to prepare, like Shepherd’s Pie. Rather, they are putting a couple of baking potatoes in their top-up basket for an easy-to-make evening meal.
Smaller pack sizes
Acknowledging these trends, retailers are offering UK shoppers fruit and vegetable products that tie in with their requirements. Interveg’s Chris Wilkinson, who is also chairman of the British Onion Producers Association (BOPA), says onion packers who supply supermarkets are mainly supplying smaller, 500 gram, 750 gram and 1 kilogramme packets – or just three to four onions in a net bag.
“Loose onion sales have dropped right off so people are generally buying more pre-packed produce,” he continues. “Some of the supermarkets do sell 5kg bags, but these tend to be the ones that are [located] in areas of the UK whose ethnic communities prefer to buy in larger sizes,” adding that the larger bags of 20-25kg tend only to be supplied to wholesalers or caterers.
Malcolm Gray, BOPA member and managing director of onion supplier Allium Alliance, tells Produce Business UK that the majority of British shoppers tend to prefer convenience ranges in smaller retail bags. This, he says, is in contrast to countries such as Germany, where people continue to buy a lot of fresh produce in 5kg bags.
“There would be room for the supermarkets to stock 4kg bags [of produce] on their shelves but they do not like doing it, particular as the nets dirty the shelves and everything else,” Gray says. He also points out that cheaper produce is still available in bulk at farmers’ markets, where fruits and vegetables can be sold at significantly cheaper prices than at supermarkets’ values.
Evans of Freshgro and HDC tells Produce Business UK that both consumers and growers are also becoming more conscious of the need to reduce food waste. He says: “Consumers are recognising that food waste is an issue and a lot of the big companies in the industry are investing in anaerobic digestion plants, which generate energy and fertilisers and enable growers to get the feed-in tariff. There’s a drive towards putting in these facilities – I am sure we will see more of them.”
Evans adds that Class II vegetables often end up being used for processing or animal feed purposes. “We have four or five lorries a week coming to take stock feed away – there’s quite a network out there,” he explains. “Also, [the industry’s] improving technology prevents us from growing much poor quality produce.”
Reconsidering value ranges
Rather than keeping quiet about shopping in the likes of Aldi or Lidl, value-for-money consumers are now proud to admit that they shop at these discount retailers, which has perhaps prompted traditional supermarkets to re-evaluate how they sell their fresh produce too.
Evans believes the so-called ‘basic’ ranges offered by the big retailers are fading away from the shopping aisles. “Back in 2008/09, everyone insisted they were going to be the world’s best discounter and packaging was designed to reflect that,” he notes. “But nowadays, people are proud enough to go to the likes of Aldi, and so subtly we are seeing some of the value ranges being slowly dispersed.”
As the grocery market continues to change, there are obviously many factors for growers, packers and buyers to take into account when considering how they can meaningfully target the value-for-money section of the market.