With volume down 2.9 per cent, or 20,800 tonnes, year-on-year, and a decline in value of one per cent for the 52 weeks to 23 December 2012, it would be fair to say that the banana category is in a state of decline in the UK, but several retailers and producers are bucking the trend with innovative ideas.
Sainsbury’s has a 15.3 per cent share of total banana sales, outperforming its grocery market share by 0.3 points, and the retailer says customer interest has been reinvigorated by a fresh approach in its stores.
After successful trials of selling bananas out of hammocks, the retailer is looking to move the scheme nationwide and its bananas buyer, Finbar Cartlidge, says it’s part of a long-term recommitment to the category. “It’s good to see we’ve improved but there is still more to do – particularly in improving store displays and getting our 100 per cent Fairtrade message across to customers,” he says.
“We’re always looking for something new and exciting to add to the established Cavendish to make bananas more interesting for customers, but we’re not quite there yet.”
Morrisons has also performed strongly, with the Bradford-based retailer outperforming its 11.2 per cent grocery market share by an impressive 2.1 points in banana sales.
Mark Booth, Morrisons’ produce buying manager, says sales have been positively impacted by consistent prices and pinpoints the retailer’s £1 kids’ and family packs of bananas as big sellers among price-conscious British families.
Meanwhile, produce multi-national Fyffes has forecasted positive growth in 2013 despite the apparent decline of the market, and has targeted turnover to be in the €27-€33 million range this year.
But with Asda holding firm in recent weeks with its banana price standing at 68p/kg, while the likes of Sainsbury’s and Tesco moved up to 79p/kg, has consistent low pricing added to overall market decline been responsible for holding growth back in the category?
One leading supplier believes so, name-checking the likes of Morrisons and Asda as retailers that didn’t offer a high enough price across 2012.
“I think it is fantastic that Tesco bucked the trend against the banana price wars and that the majority of the other retailers followed suit. Even though Asda has stayed at 68p, it is now the minority.”
The supplier adds that bananas are perfect for cross-promotion, listing bananitos – baby bananas – as a brand that has room to grow its sales through clever advertising.
He continues: “Because of their strong performance year-round, bananas are not promoted heavily. I do think they are perfect for cross-promotion and hopefully more of that can occur this year.”
Morrisons’ Booth admits that the banana market is currently under strain in the UK. He explains: “The banana market is under pressure – competitive pricing at retail level against cost inflation on all hydrocarbon-based inputs has had an impact. Having said that, banana penetration remains very strong and it remains the nation’s favourite fruit.”
And Fyffes believes that prices must go up in order to for the category’s decline to reverse in 2013. “The industry will once again experience cost inflation in 2013 and, as a result, higher selling prices will be necessary in all markets,” said a spokesperson.
Breakfast remains the top eating occasion for banana consumption, with over 68 per cent of banana occasions occurring in the morning and a leading domestic supplier told FPJ there is room for improvement in promoting bananas’ ability to complement a wider variety of meal occasions.
A spokesperson explained: “I do think there is more that bananas could do. We see the success of berry and apple marketing campaigns and I think there is a place for something similar in bananas. Because that eating occasion figure is fantastic compared to other fruits, I think sometimes the banana industry can rest on its laurels.”
And Booth agrees, stating that the positives of the fruit can be more clearly marketed by retailers and is confident in Morrisons’ ambitions for the fruit in the future. He concludes: “Bananas are extremely user friendly whatever the eating occasion, but as a healthy start to the day or a convenient snacking food they really do excel.”—
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