For most UK industries, 2009 will go down in history as the year consumers pulled on their purse strings and the economy went into slowdown. The fresh produce industry has been no exception, although it has arguably fared better than most and the golden phrase “everyone still has to eat” has never been used so much.
Nevertheless, consumer attitudes and habits have drastically changed over the last 18 months and it looks like the recession will have an impact on consumer behaviour towards fruit and vegetables for some time to come, in both a positive and negative way.
“We have had a very nice decade of growth and affluence and that all changed very abruptly in 2008,” says Judith kleine Holthaus, account director for consumer goods at consumer think tank Future Foundation. “It was a driver of behavioural changes. At the moment, the money spent on keeping the economy going in this country is lower than what is received. For every £3 earned, £4 is spent. A lot of people are worried about losing their jobs.”
And kleine Holthaus believes that this fear is not misplaced. According to Future Foundation’s figures, jobs continue to be cut in large numbers for years after a recession has finished. The logical reaction has been that household budgets have been cut and people are shopping around for the best deal more. This means that fresh produce, like any product on the shelf, really has to prove its worth.
Reality hit consumers in 2008 on many levels. According to Future Foundation, 48 per cent of consumers surveyed said they were more careful with the grocery budget because of the recession, 87 per cent shop around actively while thinking about their budget and 31 per cent said they had substantially cut back on the money they spend.
The winners in this situation have been the supermarkets which, according to kleine Holthaus, have managed to drum up more consumer confidence than the government. “Consumers are now looking at shelves actively,” she says. “Supermarkets have worked the recession to their advantage and been smart in their response. Consumers seem to sympathise with them.”
Food & Drink Towers released its Ten Top Trends For 2010 last month, tracking the current and emerging trends that are set to influence the food and drink industries.
Most relevant trends do concern supermarket promotion and marketing; managing editor at Food & Drink Towers Helen Lewis compiled the report, in which she identifies both ‘the Marks & Spencer effect’ and ‘just a handful of ingredients’, where supermarkets have made the best out of the recession. It seems that, like M&S’s anniversary campaign, looking back to the “good old days” has become a nostalgic exercise during the difficult financial times and this approach will continue through to next year.
Similarly, supermarkets will make the most of the eat-in trend. “Cooking-from-scratch recipes that require just a handful of ingredients and are quick to prepare will become more important to budget-conscious consumers through to trend-spotting foodies,” says Lewis. “One-pot meals equal less preparation and less cleaning up, which is perfect for time-pressed families. The ‘just a handful of ingredients’ trend refers to all of the above, as well as products being reformulated with as few ingredients as possible (cutting out all of the unnecessary additives and any artificial ingredients) and the introduction of new lines with no more than five ingredients.”
Although the economic downturn has undeniably had an effect on the way consumers buy fruit and vegetables, some micro trends in consumer buying habits have become evident over the years, including the number of people that claim to eat their 5 A DAY.
“Gradually, over the last five years, consumers have been buying their 5 A DAY,” says Tim Maton, senior consumer analyst at IGD. “This year, 41 per cent of the people we asked claim to be buying their 5 A DAY, while only 32 per cent did in 2005, so it is a steady year-on-year increase. This trend started before the recession and has continued through it unabated. Awareness of 5 A DAY is increasing, fuelled by the government, the food industry and the companies with it. The healthy eating drive is not going to go away.”
In a continuation of this, the health drive has helped keep the prepared sector going, with health-conscious convenience taking the reins - although this industry has undergone a dramatic transformation as a direct result of the downturn. New products have really got to offer something different now, as well as value for money. Gone are the days of the ready meal and now consumers are looking for fresh, healthy ingredients that they have to put in a little effort to cook or prepare.
The eat-in trend sits nicely along with this, as shoppers look for something special to eat at home that they can feel proud of presenting at the dinner table, instead of visiting a restaurant. A substantial third of the public eat out less than they did last year, according to Future Foundation, and food is becoming more of a social occasion in the home once more. “There is a very definite platform for food companies in a marketing sense,” says kleine Holthaus. “One of the economic forecasts is that food will become more like a leisure activity and people are thinking more before they buy something. Overall, there is going to be more health-conscious food in the home.”
As the country comes out of recession in the future, research from Future Foundation predicts that the following couple of years will continue to be tough and bad memories will die hard. And although this may be bad news for fruit and vegetable companies supplying the foodservice industry, this trend has opened up many other opportunities for the fresh produce industry.
Consumers have continued to show interest in environmental issues, in another micro trend that seems to have so far got through the recession in tact. It has been well publicised that organic produce has taken a hit -arguably partially down to the supermarkets not believing that consumers will continue to buy into the concept through harder times -and that Fairtrade, with its clear, well-publicised message, has remained close to the hearts of consumers, although it is still a niche offer. Here, the organic sector has learnt a harsh lesson and is endeavouring to go down the proven PR route.
An interest in local fruit and vegetables and reducing food miles has given way to regionality, and sourcing the best fruit and vegetables from areas that are most suited to production, such as watercress from Hampshire, asparagus from Evesham and apples from Kent, for example.
When the credit crunch hit, the large discounters such as Aldi and Lidl appeared to make a killing, but since then, TNS Worldpanel’s director Ed Garner has revealed that in fact, this was not quite the case across the board. He believes that the impression that consumers were “flocking” to the discounters was created by media speculation and that shoppers have been more inclined to hang on to their ethics than the public has been led to believe.
But he does reinforce the fact that shoppers are more likely to shop around for the best deal -although that does not always mean the cheapest price. Garner says in his analysis of TNS data for the 12 weeks to October 4: “Waitrose’s growth of 11.6 per cent is the highest since August 2006, with the Essentials range and newly acquired space continuing to drive the business forward.
“The Co-operative’s growth continues to exceed the overall market as the positive effects of the Somerfield acquisition feed through.
“Aldi and Lidl continue to see share growth, albeit considerably attenuated from 2008 levels - total hard discounters have seen a modest share increase from six per cent a year ago to 6.1 per cent now.”
Value seems to be overtaking price when it comes to purchasing fruit and vegetables. Lewis maintains that ‘quality & price’ is one of the 10 trends identified in her report. She says: “We are rediscovering the true meaning of value: not necessarily cheaper prices, but quality. For foodies in 2010, buying smaller amounts of higher-quality food will be the way forward. 2010 will also be about healthy food that actually tastes good and does what it says on the tin.
“A product may boast a long list of health credentials, but if it doesn’t taste any good then it’s not going to attract loyal customers or repeat purchases. Food & Drink Towers believes that taste and quality will continue to be the ultimate purchase influencers next year.”
Lewis also rates ‘official foodies’ as another major trend for 2010. According to Lewis, your job, where you live and how you dress do not define a consumer any more - it is more all about what, where, when and how you eat and knowing your food. “2010 will be the year when consumers take back control,” she continues. “Clever brands are already picking up on consumer trends and using them to drive branding and marketing strategies.”
So the encouraging news remains: micro trends that have so far survived the recession spell out good news for the fresh produce industry. Healthy eating is here to stay, and whether or not consumers’ new-found interest in cooking from scratch and eating in remains in the long term, it is indicated that the next five years will bring many challenges and opportunities for the fresh produce industry.
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