As part of this month’s sourcing spotlight on Peru, Dom Weaver, communications director at RED, discusses the live opportunity for UK retail buyers to drive value back into the fresh produce category by merchandising products that offer a great eating experience, such as ripe and ready avocados from Peru, rather than continually focusing on price promotion
The opportunities to grow the UK fresh produce category are illustrated well by what’s happening at the discount retailers. The double-digit growth taking place at Aldi and Lidl suggests they are doing a lot right.
The formula is simple: sell a limited but comprehensive range (this report in Harvard Business Review suggests it’s a sensible approach) of great quality products, with fewer promotions in favour of a focus on consistently low prices. Add ethical trading commitments, not only all-round CSR but also treating domestic suppliers fairly, and you have ticked the main boxes on the wish lists of most middle class shoppers.
The discounters have already established a “great quality, low price” reputation in categories including wines, cheeses, meat and biscuits, and now they’re doing it in fruit and vegetables.
A few years ago, these retailers were providing a basic fresh produce range. Now, they list exciting exotic fruits and lines such as avocado and mango twin packs, which are not only sold at market-beating price points, but are also ripe and eat superbly.
The discounters’ assault on both these fronts is presenting a number of significant opportunities for Peruvian fresh produce throughout the UK market.
Here is a run-down of the top five areas of potential.
Produce with higher perceived value. The discounters are showing that they can do ‘everyday luxury’ produce as well as, if not better, than the competition. Peruvian exporters such as Camposol – which is focusing its attention on the likes of blueberries, avocados, asparagus, grapes, mangoes, mandarins, pomegranates, artichokes and peppers, and has developed a robust supply chain to Europe – are well placed to service demand for these products.
New produce lines. Although the biggest UK retailers are likely to reduce SKUs, more unusual fresh produce lines offer the opportunity to bring excitement – and value – into the category. Spanish persimmon, for example, has grown from sales of just a few thousand [individual fruits] 10 years ago to more than 20 million persimmon in the 2014/15 season. Exotics from Peru, including pomegranates and cherimoya, supported by marketing and public relations, could carve out a similarly attractive market as retailers search for other products to grow.
Specific windows. An emphasis on eating quality will highlight key times of the year for certain products that offer improvements in these areas. In citrus, Peruvian Nadorcott, for instance, has provided retailers with a reliable easy peeler during the summer window.
Eating quality. Whatever the new opportunities, straight-from-the-shelf eating quality will feature heavily. Peru has already proven itself a reliable supplier to the UK in products such as Hass avocados, which are the mainstay of the fast-growing Waitrose twin-pack of the fruit during the UK summer, supported by Peru’s Trade & Investment Office in the UK for the first time this year, complementing the on-going promotional campaign run by growers’ association ProHass. With the supply chain in place and capability established, Peru is well positioned to supply the UK with other fresh produce.
Trade communication. New opportunities such as these create a need for suppliers to ensure retailers and importers know and understand their products and credentials. In the last year, ProCitrus has launched the Peru Citrus Quality Seal, a move designed to protect the reputation of its easy peeling citrus fruit; while Camposol commissioned the University of Reading to run tests to establish UK consumers’ preference for Peruvian blueberries over competing sources. These are just two examples of Peru’s initiatives targeting the trade.
These are among the trends that will shape UK fresh produce in the months ahead. While price deflation may mean the category remains around the stubborn £7 billion market for some time still, there is good evidence that volumes are growing well, driven by attractive pricing.
And, if the quality of the produce continues to improve it could well be the boost we need to see increased value overall and UK consumers increasing their consumption of fresh fruit and vegetables for the first time in more than a decade.
Read other articles in PBUK’s Sourcing Spotlight on Peru: