Sleigh bells may not be ringing just yet, but those involved with some of the most popular Christmas lines are rolling up their sleeves to gear up for the festive market. This year, the price of Christmas dinner is expected to rise again and speculation is mounting about how much consumers will set aside for their food shopping at this time, let alone for the traditional tree. The pressures faced by growers and exporters who have had to deal with rising production costs and are likely to see aggressive promotions over the festive period will mean that, more than ever, they will be hoping for a season of good will.
From Brussels with love
Brussels sprouts got off to a slow start this season in late September and early October, with demand for early product at a low level and the crop grown for that first window becoming over-mature. However, the season is yet to play for and sales are expected to increase throughout the festive period, forecast to be up four- or five-fold in Christmas week. UK growers are well placed to realise the required supply, including the Christmas campaign, but Dutch crops are also yielding well and any shortfall from the UK in the weeks that follow will be managed easily.
Abacus continues to be the favoured early variety for its early harvest and field standing. Maximus plays a major role for most producers for its sprout quality, while Helemus is the traditional sprout for the festive period.
Mike Molyneux, vegetable sales specialist for cauliflower and Brussels sprouts at Syngenta, says a plentiful and high-quality crop is now on the market. “Ground conditions have been generally favourable, although recent warm, wet conditions have put extra pressure on the disease levels,” he says. “We anticipate the market to remain stable throughout the campaign. Prices returned have been low, while crop input prices have risen - however, yields are anticipated to be relatively high.”
Roger Welberry, a grower and chairman of the British Sprout Growers’ Association, says producers need better returns to secure the sustainability of the category. “Prices have dropped lower than last year, but we cannot continue to grow sprouts with this level of return,” he insists. “We need an extra £50-60 a tonne to cover the extra input costs, or UK acreage will decrease again. This year, the acreage fell but yields have been higher, so for the moment it is averaging out but, in the long term, there will be fewer growers.
“Sometimes the multiples like to knock down prices as we get into Christmas week, but we do not need to do that - sprouts will sell anyway, even if they are a few pence more per kilo. There is no point selling large volumes for no money - we should be trying to get the best price.”
But the challenges have not put a stop to optimism as the category gears up for its peak, although so much depends on factors outside its control. “The outlook should be good as long as we can get a reasonable return and it leaves us with some money in the kitty,” says Welberry. “The product is so versatile and it is very good for you, but we have to continue to promote it or all the good publicity will fade away.”
The sector has continued to make headway in terms of innovation, with new and sweeter varieties, with better resistances and increased shelf life moving steadily onto the market. “The best new varieties available this year are early Gustus, for its exceptional standing ability and Cobus, for late November-early December production and disease tolerance, while for December and January there is Aurelius, with its smooth button type,” says Molyneux.
To keep pace with these technical developments, the last few years have seen the major players embrace marketing and promotion, which will keep up the pace this season. “Traditional markets are remaining stable and will be marketed in the same way. However, we are working to improve taste and natural shelf life to help reduce wastage,” says Molyneux. “The knowledge of health benefits and the inclusion of sprouts in the 5 A DAY programme will continue to increase consumption, while the interest in the amateur market will add a further boost to this…
“There has been significant increase in the packet seed trade and amateur market for own production - this can only help to improve overall consumption,” he adds.
Stocking fillers
The Christmas market for citrus will shape up over the next few weeks, as growers and exporters choose the markets for their fruit based on the exchange rate and the margins they will be left with.
Supply and demand for Israeli easy peelers is expected to remain consistent in the run-up to Christmas, without any major highs or lows. The first easy peeler to leave Israel is Suntina in late November, followed by minneolas and then Or and Mor.
Rob Cullum, product manager at Agrexco UK, says production levels are normal for the forthcoming season, after the majority of citrus growers escaped the worst of the frost damage earlier this year. But he admits that the global financial crisis is taking its toll on trade. “We do foresee that the global economic situation is going to prove troublesome for our growers this season, especially in relation to the UK marketplace,” Cullum says. “The weaker sterling against the shekel means that, in monetary terms, our growers will be more than 20 per cent down on their prices/returns from last year. That sort of reduction in their margin is almost impossible to absorb - as like most producers, they have been reducing their costs over the last few seasons to keep trade prices as low as possible for our UK customers, so that they in turn can keep costs low for the consumer.
“Agrexco will do everything it can to keep supplying the UK with the volumes of citrus required - we have long-established customers here and as usual, it is vital that we provide them with what they need, when they need it - but it may indeed turn out that more of our growers’ supplies will stay in Israel for the home market this season. No doubt the next few weeks will give us a stronger indication of how prices are holding. If sterling rallies, it will be good news for all.”
The exchange rate means that at this stage of the season, it is difficult to forecast the volumes that will be shipped to the UK. Approximately the same quantities of Shamouti, Valencia, Navels and grapefruit as last season will be available. “If we can achieve the returns our growers need, there is no reason why volumes will not be the same as last year,” Cullum says.
A saucy treat
The most popular fruit accompaniment to the traditional turkey is looking in better shape, now that the market for fresh cranberries is showing some promising growth.
Jon Clarke, head of fruit buying at JO Sims, says cranberry supply will be tight in the run-up to the festivities. “Cranberry production is higher than last year, but the amount going to the fresh market is less - growers have increased production into the processed business, which delivers a better financial return for the crop,” he explains.
The market for fresh cranberries is growing at a rate of five per cent each year. Around 500 tonnes will be shipped to the UK market this season. The Stevens variety is popular for its size and colour, although the timing of the harvests means the majority of the fruit at Christmas time is Howes, which also has a good colour.
This year, values within the market will be high, as reduced volumes from the UK and Canada, steady demand and a dollar exchange rate that is 15 per cent worse than last year have come together.
But the sector is satisfied with the quality of the fruit. “The crop has been very good this year,” says Clark. “The weather conditions have been ideal, with warm days and cool nights at the critical point of berry development, which should lead to good coloured fruit.”
As ever, cranberries will be heavily promoted before Christmas to get sales going at this critical time. The lack of repeat purchase is, however, still holding back the growth of the category.
“The shelf space earmarked for the fruit is expected to increase from late November through to Christmas Eve,” says Clark. “Features in lifestyle and cookery magazines promoting the use of cranberries will enhance awareness. The many articles on the positive health benefits of cranberries in recent times have helped to increase consumption, although most still make the purchase to make fresh sauce and once they have made it there is no repeat purchase.”
A date to remember
Demand for both Medjoul and fresh dates continues to grow steadily year on year, with the two peak times in the calendar over Ramadan and at Christmas.
Israeli exporter Agrexco expects to increase its supply of Medjoul to the UK by 20 per cent this year, split equally over these key events, with more than 1,500 tonnes of all date varieties forecast to be sent to the UK. The most popular variety supplied to the UK is Medjoul, in medium-to-large and jumbo sizes.
Elana Gordon, product manager at Agrexco UK, reports that the production of Israeli dates has not been interrupted this year and that the continued growth of the market is down to forward-thinking growers. “Date palms take between seven and 10 years before fruit is ready to be harvested so a huge amount of planning in previous years has ensured that we can meet the steady increases we have been experiencing for both Medjoul and fresh dates,” she says. “The UK market has previously viewed dates as a Christmas line and this is something that we are naturally keen to change, as we have Medjoul available all year round and are keen to promote the fruit as a healthy snack on the run…
“We work with our customers and are flexible in meeting their aims and objectives. We are currently supplying special 180-250g gift boxes for the UK multiples at their request. No promotional budget has been set, but we do work with individual customers as and when we can to support their drives for increasing sales.”
The little fir tree
Moving away from the dinner table, the market for Christmas trees is set for a period of uncertainty before the rush as consumers traditionally clamour to get their firs next month.
Roger Hay, secretary of the British Christmas Tree Growers’ Association, says it has been a “wonderful year” for production, following sunny periods in May and rain over the summer. However, he admits demand will be difficult to forecast this year, given that prices will increase to offset rising production costs at a time when consumers are trying to rein in their spending.
Hay predicts that there will be more emphasis on home-grown firs this year, with UK growers expected to supply 90 per cent of the domestic market. This means a shortfall of the most popular variety, the Nordmann Fir, is likely to occur because imports from Denmark and Ireland will not be as popular as in past years now that the sterling has weakened. But there will be plenty of pine and spruce trees on the market to meet demand.
“We like to think demand will be high but the reality is that in the current economic climate, sales will be difficult to predict,” says Hay. “At this stage, I know growers are doing quite well in terms of demand. As the season continues, the pricing situation could become awkward, with some varieties becoming more expensive than usual while others will be more stable.
“In many cases, growers will be forced to cut their margins in order to get the throughput they need.”
But this has not held back the development of the category and the innovations it can bring to the home. Hay believes the environmental story behind real trees and costlier ‘living trees’, which can be planted in the garden rather than thrown out, over mass-produced plastic alternatives that have been shipped from overseas, should be harnessed as one of the main selling points this year. “Trees absorb carbon dioxide and give out oxygen,” he explains. “When Christmas is over, they can be replanted or recycled for mulch. They have much more to offer than re-usable plastic trees imported from far-off countries such as China, and this is the message we need to get out there.”
THE CO-OP’S CHRISTMAS CAROL
The Co-operative Group has unveiled details of its multi-million pound Christmas food advertising campaign, in which it will partner up with chart-topping artist Gabriella Cilmi.
The concept - ‘That’s the Spirit’ - will lie at the heart of all communications to highlight The Co-operative’s key values.
The campaign will highlight the chain’s range of products and its position as a community retailer, as well as pushing tactical promotions on festive lines.
Debbie Robinson, director of food retail marketing at The Co-operative Group, says the new promotions will encompass the idea of time shared with family and friends. “From buying the tree and putting the lights on to going to your children’s school nativity play, we are capturing the festive spirit in the run-up to Christmas,” she says. “In addition, the campaign highlights The Co-operative’s strengths of great offers and convenience, ultimately allowing customers to do what really matters at Christmas - spending time with family and friends.”
The TV adverts will be backed by rising star Cilmi, with an upbeat cover of the classic Connie Francis hit, Warm This Winter.
Robinson adds: “Gabriella and the track are a great fit with The Co-operative brand, conveying traditional Christmas values of warmth, family and fun with a contemporary angle.”
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