Ian Craig, chief executive officer of one of the UK’s largest fresh produce companies, Fresca Group, explains to Produce Business UK why it’s vital that UK demand is maintained at a healthy level to compensate for the constant squeeze on prices
UK fruit and vegetable importers are finding it increasingly difficult to maintain supplies of mid-priced products that meet the quality expectations of British consumers as a result of growing pressure on prices and falling returns.
This is the assessment of Ian Craig, chief executive officer of Fresca Group, one of the country’s largest fresh produce importers, which includes well-known names in the sector, such as Mack Multiples, Manor Fresh and MMG Citrus.
Speaking from his office in Paddock Wood, Kent, not far from the multi-million pound Thanet Earth glasshouse complex that has garnered Fresca much media attention since it was built a few years’ back, Craig says that falling food prices combined with high expectations is now a major challenge.
Although sales and demand for premium products have remained strong in the UK in spite of the economic difficulties of recent years, Craig says the “middle ground” has been squeezed.
“Price pressures are making it increasingly difficult for suppliers to maintain supply that meets the quality aspirations of the retail customer for the price available,” he says.
“Whilst this has always been the challenge, with food prices in the UK down by 3.4% over the last year and inflation currently running at 0%, this picture looks set to remain for the foreseeable future.”
Part to play
Faced with such challenges, Craig says it is important to maintain a healthy demand for fruits and vegetables, arguing that some of the promotional tools adopted by grocery retailers in recent times have helped keep fresh produce affordable for consumers.
“I’ve noticed a reduction in the number of ‘two for one’ offers that seemed to increase waste in the home,” he says. “The multi-buy mechanism commonly used today is encouraging cross-category activity in customers and helping to boost incremental sales, which are so important to us achieving growth.”
Although low price-point initiatives, such as ‘round pound’ offers, are also helping to sell volume, Craig cautions that these rely on careful programming to be a commercial success for a supplier.
Fresca’s CEO argues that the UK government also has a part to play in ensuring that fresh fruits and vegetables are effectively promoted to consumers of all ages through the health services and schools. However, to date, he says that budgetary pressures have meant that this area has not been prioritised enough.
Instead, Craig says the UK media is having a greater effect, with popular television cookery programmes directly influencing consumer behaviour.
However, television is far from the only factor influencing and shaping trends in fresh produce consumption.
UK retailers, says Craig, are experiencing growth in and placing a lot of focus on the convenience and online markets; both of which require changes to conventional working models. In fact, Craig says Fresca has been adapting its offer to identify products and formats that would be ideally suited to making the most of those opportunities.
“There are different ripening requirements and different systems for distribution to meet these needs too, so it has involved a fresh approach in many parts of our operations,” he explains.
The increasing volume of directly-supplied products has also brought change to the Fresca companies and Craig believes there remain opportunities for the group to explore with service provision models.
“I’m confident that each of our companies has found a way to remain an indispensable part of the retail supply chain, alongside and in management of the directly-supplied volumes,” he says.
Although each company within Fresca operates as an individual unit, Craig emphasises that the group has been able to benefit from sharing ideas and good practice among its companies, providing it with a competitive advantage compared with many other firms.
“Each of our companies operates a full programme of new product development, and seeing new ideas through to the shelf is very rewarding,” explains Craig.
“We’ve invested heavily in variety development programmes in all areas, but particularly in grapes and in stonefruit, with these long-term projects now showing plenty of commercial promise. We’ve taken a group-wide approach to help us make the best value of the investments.”
Key achievements over the past 12 months for Fresca as a group have included a ground-breaking new partnership arrangement between Primafruit and Waitrose and the completion of a major factory upgrade for Manor Fresh.
As a group of companies, Fresca supplies almost all major fresh produce categories to the UK grocery retail market with the exception of topfruit. It sources from every part of the world and Craig says each business has carefully cultivated relationships with the best growers of their products. “We tend to have a core set of strategic grower partners and work with them over the long term to provide a level of security and to help drive investment back at farm level,” he says.
Although careful not to give too much away, Craig says the next 48 months will see Fresca taking a closer look at UK production and the potential that it has for the group than it has in the past.
As well as finalising arrangements for another glasshouse at Thanet Earth as part of the site’s continuing development, Fresca’s CEO says the company hopes to increase its involvement in the UK fruit market in line with consumer demand and strong growth potential.
Exports are also a growing new market for the company, which has already recorded some seasonal success with UK products. “We’re looking to build further export opportunities as and when market conditions and demand arise,” adds Craig.