Looking at the bare statistics, the past 12 months appear fairly unremarkable for the veg sector. Worth £4.78 billion, value is up two per cent, while volume has declined by 1.5 per cent, but that hides a tale of fluctuating fortunes.
One possible reason for the volume reduction is the focus on cutting down unnecessary wastage. According to insiders, the last 18 months have been particularly aggressive on the retail promotion front, but with an emphasis on price cuts rather than BOGOFs.
“Our sector is not joined-up enough as a category, like say chocolate, which has strong brands,” explains one source. “There was a massive two-for-one drive but, of course, with the food waste issue, this hasn’t been great for veg. There has been a change in attitude.”
And consumers’ appetites have been changeable this winter - the warmest on record for some time. Promotional activity aside, people just haven’t been buying as many winter warmers as they would normally this quarter. But it’s not just consumers that have been affected by the mild temperatures. As can be expected, the product has been changeable in both quality and quantity because of it.
“Mild conditions over the Christmas period made for relatively easy harvesting of roots and brassicas, especially compared to last Christmas,” says Simon Bowen, Produce World’s agronomy director. “But quality-wise the unusually warm temperatures caused a little bit of yellowing in some brassicas as crops became overmature and encouraged additional growth, resulting in some larger than normal roots such as parsnips.
“The warm season had already seen some early break of dormancy and sprouting in potatoes, which meant crops needed careful management out of store and through the packing process to avoid issues on the shelf.”
As FPJ went to press there were reports that some brassica crops had been cut so much ahead of schedule that in the south of England January’s cabbage had already been cut two to three months in advance. Nevertheless, all indications point towards a compressed marketplace for vegetables over the next three months.
“With inflation at 5.7 per cent in real terms, an increase in value of two per cent is quite a concern,” says one well-placed industry source. “Thinking about the latest Tesco figures, I wonder if there is an element of mistrust when it comes to consumers and supermarkets? People have started to stop shopping at Tesco. Consumers are constantly talking about sell-by dates and what with the coalition government looking into the issue, I think that people have started to question the big companies.”
Another reason for the upturn in value may have come from a certain type of consumer turning to more high-end products and away from bulk volume purchases. “Chantenay carrot sales have been strong against conventional carrots, which have been low,” says the source. “We are supposed to be going into our second recession, but people are not doing what we thought they would do. Consumers are going for value and added value. I think this is where Tesco has gone wrong; people don’t want average, they want diversity. Tesco is average.”
This can also be seen in sales figures for products like Tenderstem broccoli. Last week, the brands’ UK licensor Coregeo revealed that in November 2011 the brand saw a increase in sales year on year of nearly 30 per cent. But the industry remains mostly sceptical. “Although I can pretty much agree with the figures, unfortunately we are all in very challenging times at the moment, as you can see with some large companies reporting major losses,” says one supermarket vegetable grower and supplier.
At a time when consumers are re-evaluating their options, the vegetable industry could have an exciting, yet challenging time ahead.
“There is more happening out there than just figures can show us,” says one insider. “Change is definitely in the air.” -
SMELLS LIKE TEAM SPIRIT
Tesco and packer Stourgarden have worked together through 2011 on a project to reduce the amount of packaging used on their three-in-line onion pack
Here Tesco’s technical manager for potatoes, roots and onions Tim Pratt and onion packer Stourgarden’s technical manager Jonathan Bell join together to explain how they have managed to reduce packaging by 35 per cent with the introduction of a flow wrap pack:
What is the idea behind the new packaging format introduced?
JB: It started when we identified that our three in-line onion packing lines were the least efficient of our lines, running at an average rate of around 15 packs per minute. We had to tick all the boxes: improve efficiency, lower cost, benefit the environment, improve the offering to the customer and maintain quality. The flow wrap format delivers all of these points. Packing speed is increased to around 60-plus packs per minute and packaging material costs are halved. The flow wrap pack saves around 35 per cent of packaging material compared to the current format of a net, two metal clips and a wineglass label.
The flow wrap material is also 100 per cent recyclable. The offering to the customer is improved with the customer being able to see more of the product through the clear film and giving them a cleaner pack to handle and store. Extensive shelf life testing has been conducted to ensure that the film isn’t detrimental to quality.
What are Tesco customers looking for in fresh produce packaging?
TP: Customers are looking for packaging that they can recycle, gives clear visibility of the product that they are buying and is convenient. They also need a format that maintains quality and freshness of the product. Some customers are concerned that products are overpackaged, but Tesco and its suppliers work hard to keep packaging at the minimum required for each product, while not compromising that item, and after all excessive packaging only introduces extra cost.
Would you consider rolling the packaging out to other fresh produce items?
TP: The Stourgarden trial is going well with the new packaging format being supplied into two depots. The efficiencies have been seen in production and good packing speeds have been achieved. The trial is still ongoing and customer feedback has been positive. We will have a final evaluation meeting soon to discuss the data collected during the trial. The flow wrap format is a proven technology with many product lines already being sold in the format.
What are the main advantages of the new packaging?
JB: For growers, returns could improve as a result of the savings made by the packaging lowering production costs. The supplier will benefit from the efficiencies that the new format will bring, reducing the production and packaging costs. The retailer will be able to have clearer on-pack communication with the customer - promotional labelling will be clearer, there is more space for recipe ideas and all product information can be presented clearly. The customer will see the benefit by being able to buy a fresher product and see more of the product in the pack.
What’s next for fresh produce packaging?
TP: Fresh produce packaging is continually changing with new technologies coming to market all the time. In the near future, we will certainly see more recyclable packaging coming to the shelves. With the rising oil prices, the cost of packaging is always a consideration.
Another key part that packaging plays is to attract the customer, making them interested in the product. The first consumer purchase is based on appearance and the second is on taste, therefore to draw in new customers the packaging has to be attractive, new and innovative. -
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