After a year of rising prices and low sales, the exotics category is beginning to show modest signs of recovery.
At the beginning of December, all hopes were pinned on increased spending on luxury items over the Christmas period to drag the exotics category back to its feet. It appears Santa took note of a few Christmas lists the industry sent his way as, for the first time in 12 months, Kantar Worldpanel data shows growth in the sector, with values up 1.8 per cent on the same period the previous year.
Volumes are still down year-on-year, but dramatically less so than they were in December, at -2.3 per cent rather than -5.8 per cent.
Industry experts say sales volumes have declined as people have less money to put exotics on their shopping list. However, Asda is showing signs of addressing its undertrade by achieving 13.4 per cent value growth in the 52 weeks to 19 February 2012, despite selling less on promotion than the market average.
The supermarket’s senior buyer, Dean Hayden, says the secret to the turnaround is what he calls “box talkers”, which are a sticker that shows a picture of the outside and inside of the product as well as information on how to prepare it and what to put with it.
“We find a lot of customers want to buy these things, but they don’t know how to use them or when they are ripe. This booklet is critical to our demand,” he says.
“Going forward, we’re putting some fruits in pre-packs rather than loose so we give the customer an idea what to do with it. Then, when we have built up sales, we can begin selling them loose at better value.”
Asda used that strategy with persimmon and now has 44 per cent of the market share. Hayden says the supermarket now sells more persimmon than it does mango when it is in stock, and in some cases more than avocado.
“The persimmon has to go through ethylene gas and that takes out the dryness so then we can eat it straight away,” he explains. “What happened was, 15 years ago, there were so many people trying to do this but it varied how well they could do it and it wasn’t a good start [for sales of the fruit].
“Now we just go with one grower and they know how to do it. You can eat it hard or soft and we put all that on the pack. Its huge success is down to the education.”
With the latest Kantar figures showing a rise in value it is interesting that rather than selling smaller pack sizes for less, Asda is trying to increase value by selling bigger volumes.
Hayden says: “We’re trying to create better value by not selling lychees, for example, as a small £1 pack because when people like lychees they love them. So we do 500g packs that are great value and people love it. At the moment they’re selling for £2. It’s great and the market is there. Customers want to eat a good amount.”
Going forward, Hayden argues consistent pricing could offer a better model for getting people to buy exotics. “A lot of exotic items are luxury items. They [customers] won’t have papaya or mangoes on the shopping list. To counter that we use consistent pricing, always at £1 for example, so it’s not on the list but they know it’s always the same price and they can get it if they want it.”
Another way retailers may be able to boost sales is by expanding the exotics range in stores where the ethnic demographic is not predominantly British.
“We have 61 stores where the demographic is different and we have tried to produce a range that the customer would like. We’re also doing a lot of work with aromatic mangoes from Pakistan; they only last a day but the Pakistani customers go mental for it.
“They have been asking for them for years but due to restrictions we were unable to get them from the growers. Now we have managed to work with the Pakistan High Commission and GlobalGAP and we have sold the mangoes in 21 of our stores. It wasn’t to profit - we sold them for less than we paid for them - but it’s about building up a market.” -
TAKING ON ROTTERDAM
The supply of exotics and other long-haul fruit and vegetables is set to receive a boost from the construction of a major new European port. Michael Barker finds out more about the Wilhelmshaven project
Rotterdam’s status as Europe’s undisputed number-one port could be challenged if the ambitions of a new build in northern Germany are realised.
The deepwater container harbour JadeWeserPort in Wilhelmshaven is currently under construction, with project managers stating it will be only the second port in Europe behind Rotterdam to be able to handle the newest 18,000 TEU Maersk containerships. There Nordfrost, a full-service provider in the temperature-controlled food logistics sector, is investing over €80 million in the first phase of a state-of-the art logistics centre that will begin operation in August.
The new Nordfrost Seaport Terminal’s other key selling points include the fact that as well as simply unloading containers, the facility will carry out product-specific import controls as well as sorting and re-packing of fresh produce, all under one roof.
It has high environmental credentials, with co-generation projects on site to reduce its impact on the surroundings, and also offers storage of fresh, frozen and dry products, which could allow return loads of products such as meats to Asian and other long-haul destinations. Future additions to the site could include banana ripening facilities.
“I can see great opportunities for us with our Seaport Terminal at the JadeWeserPort, especially for the handling of fruit and vegetables,” said Nordfrost owner and CEO Horst Bartels. “With our position directly on the site of the container handling zone, we can use the strategic locational advantages of the port directly for our customers and complement this with a plus-in service. Sensitive perishables leave as quickly as possible, readily packed for the fruit and vegetable departments of retailers and are on their way to their destinations without delay.”
The first phase of the project will see capacity for 15,000 pallets of fresh fruit and vegetables, 20,000 pallets of deep-freeze storage, processing areas for value-added services and 25,000 sq metres for the storage of general dry cargo. The world’s biggest gantries have also just been delivered to Wilhelmshaven.
While the first ships to dock at the new facility are likely to come from Asia, this is expected to be followed by freight from South and Central America and even short-haul traffic from Spain and Morocco.
The Nordfrost Group, which will be operating the facility, certainly spoke in ambitious terms about the project at Fruit Logistica last month. “This will be a new gateway from and to Europe,” head of fruit logistics Torsten Reichert told FPJ. “A fast, efficient and sustainable one. Wilhelmshaven and Rotterdam will be the two big ports in Europe. We want to really construct a supply chain with full risk on our side, and be a full service provider to the retailer and importer of fresh produce.”
Whether Wilhelmshaven can genuinely challenge Rotterdam remains to be seen, but there is no doubt that the ambition is there. -
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