With summer just around the corner, Lauren Webb, client executive at Kantar Worldpanel, suggests how the UK fresh produce retail market might perform in 2016 by taking a look back at fruit and veg category sales last summer
View the full presentation here.
As summer 2016 approaches – albeit slowly in terms of the weather and faster in terms of months – it’s interesting to look back at the summer of 2015 in order to start thinking about what we may see on the UK fresh produce retail market in the coming months.
Total produce market – Summer 2015
Spend £2.4bn (+2.9%)
Penetration 99.5% (+0%)
Frequency 23.7 trips (+3%)
Summer 2015 was a good one for the fresh produce industry, demonstrating a 2.9% growth in sales to £2.44 billion (worth an additional £69.1m) over the 12 weeks ended September 13, 2015.
This was predominantly driven by shoppers buying fresh fruit and vegetables more often (volume per buyer was up 1.5% to 52kg), and minor price inflation (price per kg rose 0.4% to £1.75).
Considering this strong performance, the next step is to look at the market from two perspectives; firstly, in terms of which products experienced an overtrade during the summer, compared with their share of value over the whole year; and secondly, which categories drove this growth.
Overperforming fruit and veg
If we look at the different produce types, and their share of value over the 52-week period ended March 27, 2016, versus the 12-week period ended September 13, 2016, certain categories see an overtrade.
Berries & currants
Unsurprisingly, these are: berries and currants, melons, stonefruit, lettuce and new potatoes, all of which are regarded as classic summer products. Lettuce and new potatoes continued their decline during this period, whilst stonefruit also struggled when we take cherries out of the equation.
On the other hand, berries and currants, cherries and melons all experienced growth; driven by increased penetration, frequency and price. Their strong growth contributed some £57m to the fresh produce market during the summer.
Berries and currants strongly overperformed versus total produce sales; seeing a summer increase of 14.2% and contributing an additional £41m to the market.
Cherries experienced tremendous growth of 24.7% or £15m over the summer, due to a good season and, interestingly, price inflation within the category.
Melons were up 2.3% or £1m, while the other stonefruit types struggled during summer 2015; seeing a decline of 2% or -£2.5m that was driven by price deflation, which affected nectarines and plums, in particular, due to loss of penetration and trip volume.
Category growth drivers
But, which fruits and vegetables actually drove the growth seen last summer?
Berries and cherries were key to this growth, of course. Although, interestingly, we have seen berries move to strong growth all year round (up 17.9% over the past year) due to greater availability of supply, while cherries have remained more of a seasonal product.
However, the three main product drivers of this growth were: sweet potatoes, mixed tables grapes and spinach, all of which experienced double-digit value growth, which was driven predominantly by attracting more shoppers to their individual markets.
Sweet potatoes rose 51.5% or £4.9m in value, mixed grapes by 50.9% or £6.4m, and spinach by 40% or £2.6m.
This is a theme that was prevalent for each of the three products throughout 2015 and into 2016, with sweet potatoes and spinach, in particular, taking full advantage of their ‘on-trend’ status.
So, the question remains – where will we see growth during summer 2016? Well, there isn’t long to wait…