The Great British fresh produce market is unique. Overwhelmingly dominated by own label, it is something of an anomaly when compared to overall grocery, where consumers spend 62.7 per cent of their shop on own-label goods. In fresh produce, brands account for only 2.6 per cent of spend.
In recent years, retailers have focused their efforts on reinventing these ranges and this trend has taken hold in fresh produce too: Tesco brought farm brands to the market in 2016 and Asda has recently launched its Farm Stores line. Despite own label’s monopoly of the fresh produce market, it’s clear that retailers still think there’s room for growth and innovation.
The appeal is easy to see: own label allows the grocers to differentiate themselves from competition and convince shoppers to pay them a visit instead. Premium private label is a good way to persuade shoppers to spend a little more cash, while driving home the message that the retailer is committed to offering top-quality goods. At the other end of the spectrum, the big four have also focused on value own-label lines to compete with the lower prices offered by Aldi and Lidl.
However, a closer look at the fresh produce market shows that retailers could be missing a trick. A common approach sets own label against brands, but sales in fresh produce demonstrate that this view is at best simplistic and often incorrect. When it comes to fruit and vegetables, we find that the more often a consumer buys branded goods, the more they spend on own label too.
Almost four-fifths of Brits now purchase branded fresh produce, and these shoppers are good news for the market, spending 10 per cent more on fruit and veg than the average shopper. Frequency is steadily increasing too, with consumers buying branded fresh produce almost once a month. These figures suggest that, contrary to common belief, brands and own label can complement each other rather than compete.
Retailers that neglect their branded fruit and veg offering may be missing out on the opportunity to drive sales for their own-label lines too. In fact, a more nuanced understanding of the relationship between own label and brands may hold the key to success in fresh produce.
FPJ is producing a Brands Special in the next issue of the magazine, out on 2 June. For more information contact editorial@fpj.co.uk.
