I was delighted to be out in Murcia, Spain, this week to moderate Sakata’s first butternut squash conference.
The Japanese-owned seed breeders put on a great programme and hosted around 100 growers and marketing companies from the European and African continents. They enjoyed a technical morning in the fields of Murcia, which have played a large part in increasing the butternut squash area in Spain and Portugal fivefold in the space of five years. That was followed by a conference that explored subjects from crop management to recipe and usage ideas, and the finer points of breeding to market trends and marketing.
While Sakata has experienced exponential growth in its seed sales to butternut squash growers in the last few years, it is the marketing end of the chain that I was intrigued by. I did two main strands of research before I went out there and it seems that the UK could be at something of a crossroads with the product.
The first, admittedly qualitative rather than quantitative research, I did was to talk to a few people about their views on the product – to be accurate and without wishing to sound sexist, they were all women, but they were all people I knew did the shopping and cooked a lot. Other than people in this industry, I’m afraid to say I don’t know any men who fall into both categories.
The five key findings were these:
1. Only one of those I interviewed didn’t buy butternut squash at all, but all knew the product reasonably well because it is so prevalent in today’s restaurant menus. I only heard of one person who professed to not liking the product – one of the respondents’ husbands.
The UK was put forward as the “pioneer market” for butternut at Sakata’s conference, and it’s true that sales here have far outstripped the rest of Europe to date. However, according to Kantar data, only 14% of UK households purchased butternut squash from a grocery retailer in the last year. It doesn’t take a genius to work out that a product whose taste is so well liked could make significant inroads into the remaining 86%.
It’s a nice ‘problem’ to have, but it needs to be solved nonetheless.
Could it be merchandised better in store? The product is relatively large of course and takes up more shelf space per unit than most, but it could well be that shoppers are just dismissing it because they don’t know what it is or have no idea what they could do with it. It could also be that merchandisers don’t quite know what to do with it either. Should the product have a different shape, size or appearance? Could it be packaged differently? Is the right information being relayed to consumers about the product? How much variety can retailers realistically accommodate on-shelf? In South Africa last year, I saw butternut squash merchandised in an incredible variety of ways – we may be pioneers in Europe, but I don’t think we’ve pushed the boat out that far here yet.
Sales in prepared and processed forms are good, but how can the fresh butternut squash become a stand out on shelf? The category grew by 54% in value and 71% in volume in the year to July 19, 2015, says Kantar, an increase that its figures suggest was driven largely by Tesco and promotional activity. The price per kilo, the data suggests, dropped by 10% year-on-year, so is it that butternut was better merchandised or did the lower price drag more sales in?
The Kantar data also suggests there are big inconsistencies in performance between the major chains – if decisions are being made on the return on shelf space, then that’s not surprising, but if a better way to sell the product and raise awareness of its possibilities can be found, then more shoppers would probably buy into the category.
I should add that I was told by someone who should know at the conference that some of the Kantar butternut data will contain inaccuracies because of the way it is measured – the supermarket chains sell in different ways (by unit or by weight) and that makes it harder for data to match reality as it has to pick one or the other. That seems to be a trend for butternut squash generally – no one seems to have a handle on how much is being grown in the world (none of the growers in Murcia knew exactly how many hectares they had planted!), quite where it is being sold, or for how much money – they just know that it is expanding fast.
2. Butternut squash is not an automatic purchase on each shopping trip for two main reasons. The first is that my panel tended to buy it only when they had a specific reason – a recipe they wanted to try out or maybe to make a batch of soup. The second was that the product keeps so well, so unless used, it is only needed once every two or even three trips. The person who didn’t buy butternut squash was fearful of it, because they didn’t know how to use it.
Long shelf life and durability is, of course, a plus and a minus. No shopper will ever complain if they buy a product and it tastes as good after two weeks in the cupboard at home as it would on the day of purchase. Neither will any supermarket or foodservice buyer mind that the product performs consistently on-shelf and for the consumer once bought. But it makes the task of increasing purchase frequency that little bit harder and therefore increasing sales relies more on introducing more shoppers into the category than enticing existing shoppers into buying more.
3. There was a complete lack of awareness of price and every single one of the people I spoke to said they would buy butternut without looking at the price if they wanted it. The ‘guesstimates’ ranged from 90p to £1.75 per squash, which is in the right ballpark, but not one of the panel said they would forego the product if the product rose in price or buy more if it fell.
There is a danger that the product like this becomes a commodity before its time, as retailers fall into the trap of price promotion as the default means of clearing product. It’s true that more people bought the product more often when it was on price promotion, and it could also be argued that if it was bringing new shoppers into butternut, then that’s a positive thing. What happens next is the key though. If enough shoppers are not swayed by price, there is room for that 10% in the price to be restored to its previous level while sales continue to grow, which would allow the margin requirements of buyers to be maintained and returns back down the chain to increase a little to allow greater investment in the elements that will grow the category, all the way to Sakata and its seeds and plants at the very beginning.
There has been huge progress in the breeding of varieties in the last decade and Sakata consistent varieties like Pluto have played a major role in giving UK buyers the confidence to widely expand their horizons on butternut. But there is more to come, for the retail, foodservice and processing sectors. Size and return is important for buyers, but for a product that might not be as price-sensitive as others, the squeeze on price does not have to be focused quite as heavily at the grower end of the chain.
4. Babies and young children love it because of its sweet taste – the mums in my sample group used it in far more ways than those who were not cooking for children, because it’s healthy and the kids ate it without complaining.
This has to be great news for the future. Butternut is a much-used ingredient in baby food and, like broccoli, its sweetness lends itself to parents who are trying to introduce their young children to healthy vegetables in as palatable way as possible. There is plenty of evidence out there to suggest that a human being’s consumption habits and taste profiles are shaped early in life, so if they like butternut at an early age, they will likely become a purchaser of the product in 15 to 20 years. That process hasn’t played out yet; my generation certainly weren’t spoon-fed butternut as a rule. So we’ll have to wait and see, but if a way can be found to ensure that children continue to be exposed to butternut through their primary and teenage years, then the benefits could be huge.
5. There was a general feeling that butternut squash could be used in more ways than it is. Soups, tarts, risottos and roasted as a vegetable accompaniment were the common usages quoted, though grated raw in a salad did come up once and one mum used it in curries and with pasta because the kids lap it up.
On the day before the conference, British blogger Deliciously Ella sent a newsletter with a butternut squash risotto recipe to her tens of thousands of followers. The product has many fans among the celebrity chef community too and it brushes up well for photo shoots. Access to recipes and usage and preparation tips can be a significant driver of sales for a product that people are unsure of and bloggers, consumer magazines and various other sources have launched into butternut in a big way – is it time for the industry to invest, and push that along at a greater pace?
This was one of the questions floating around the room as Sakata dipped its first toe into the water with its inaugural butternut conference. It wanted to explain the intricacies of growing butternut squash profitably and successfully, of course, but it also aimed to explore how it might be able to interact with the supply chain to move butternut squash onto the next level.
Sales are increasing quickly in countries like Germany, Poland and Russia and already 20% of the volume grown in Spain is sold domestically. When you think that the most common question asked by growers in Murcia when introduced to butternut five years ago was ‘what’s this?’ that is pretty impressive stuff. So, pretty soon the UK will be just one destination rather than the preferred destination. This market has been there before with so many products and it’s done great things to keep the supply flowing in, so what can we do with butternut squash to take advantage of the potential that’s out there?
Sakata has previous – having organised broccoli conferences over the last decade. It would be stretching it to say that the Tenderstem revolution came from those conferences, but they were an extremely effective way to spread the message, expand the network and quicken progress of the broccolini variety first developed in 1993 in Yokohama. The UK wasn’t the first to sell the variety, but it was the market that took the brand Tenderstem and cooked up a real storm.
The butternut brand doesn’t exist yet, but it could. The industry just needs to decide whether the hunger is there to do something similar with another potential blockbuster.