The UK soft-fruit category is poised to come into its own in the next few weeks, as supply of home-grown strawberries picks up, before raspberries, blueberries and blackberries come on stream in the summer.
So far, low temperatures, wet weather and, in some cases, spring snowfall have failed to get the season going, with both supply and demand floundering in comparison to the exceptional start enjoyed last year. Together with a well-documented shortfall in labour and rising production costs, this could spell a number of challenges for the sector this season.
So how is the summer set to shape up for the UK berry sector? And how will growers and suppliers work to maintain the promising growth of the sector against all the odds and if, like last year, summer never really arrives?
The last few months have not made for the best start to the season but, as last year’s premature hot weather and summer flooding showed, it really is too early to tell how supply and demand will pan out.
Easter was earlier than usual this year, but the long weekend turned into a washout that failed to give the category its usual bank holiday boost. Six weeks later, the May bank holiday proved more promising, and the UK sector is confident that it can achieve week-on-week growth if the summery weather continues.
TNS figures for the 52 weeks to March 23 confirm that the market has continued its upward trend, with retail sales value up 15 per cent on strawberries, raspberries and blueberries, while blackberries have grown by a massive 50 per cent, but from a much lower base.
Dave Ashton, procurement director at BerryWorld, estimates that strawberry volumes are half what they were this week last year, and that peak volumes could be up to 10 days late, causing a supply spike in mid-June. “The season, so far, is not looking great,” he admits. “The Elsanta crop comes up until the end of June and you only get a certain amount of fruit, so it will be held back a week or so, but overall volumes should not be affected.
“Whether we sell it all is another question,” he says. “Sales will build gradually but, if you get a sudden peak in volumes, supply will overtake demand. We are talking to our customers about how we can put mechanisms in place to move the fruit if this happens.”
UK raspberries, blueberries and blackberries - coming on stream later - should not be affected as much as the strawberry crop, but some suppliers are also predicting up to a 10-day delay.
Steve Sadler, account manager at AMS Ltd, spent much of last week looking at production to see how far behind it is. “Tunnel fruit is about two to three weeks behind, with a lot of flower but no red fruit at all,” he says. “The problem is that there has been no consistent dry spell, and it has made planning and preparation very difficult.”
But weather-related influences aside, there are a number of outside factors on the horizon that are likely to hit the UK berry sector this season.
British Summer Fruits (BSF), which represents 92 per cent of the UK soft-fruit sector, has teamed up with the National Farmers’ Union (NFU) to warn that the industry is facing a major labour crisis. They have urged the government to recognise the importance of seasonal workers for the long-term viability of the sector, after a shortage of applicants from the A8 nations, coupled with the restrictions of the Seasonal Agricultural Workers’ Scheme (SAWS) to A2 countries, has resulted in significantly fewer workers. This year, the SAWS has been restricted to Bulgarian and Romanian nationals, before it is phased out by 2010.
Nick Marston, managing director at Berry Gardens, is just one of those worried by the expected labour shortfall, especially once the season gets underway. “Growers look tight on labour availability, and the future is a concern,” he warns. “Without SAWS permits for non-EU students from countries such as Ukraine and Russia, we do not believe the EU countries will provide enough seasonal labour on a long- or even medium-term basis.
“BSF and the NFU are very active in lobbying government to reverse its decision to restrict permits to EU countries including Bulgaria and Romania, as the numbers of people coming through this restricted scheme is nowhere near enough.”
Concerns about the numbers of seasonal agricultural workers allowed to work in the UK have added to the mounting burden on growers and suppliers, as their margins are tightened to the limit by mounting pressures and costs throughout the supply chain.
“The cost of labour has risen substantially, as has the cost of many other inputs,” Marston says. “This is squeezing growers’ net returns badly, and we need to see increased gross returns if growers are to make net margins that enable them to invest in expansion - which, of course, the market needs as it is growing.”
These sentiments are shared throughout the industry, with all links in the chain keen to secure the long-term future of their businesses.
John Gray, commercial director at Angus Soft Fruits, insists that the situation will have to change to make the set-up more sustainable. “Net farm-gate returns were down last season, and that has been the trend every year for the last five years,” he says. “This year, labour is an issue in terms of availability and reliability and, combined with the increasing cost of inputs such as fertilisers, which has more than doubled in the last 12 months, the production sector is having a hard time,” he explains. “The continuing pressure on growers is piling up and the only solution - given that the sector is already one of the most efficient so that cost savings are limited - is to put up retail prices.
“But it comes down to whether the consumer is willing to pay more for soft fruit, and we think they are - the market has continued to grow even though retail prices have been put up steadily,” Gray adds.
It will be up to the supply base to make sensible decisions for the new season, Sadler says, and he suggests that suppliers work closely with retailers to plan promotions. “During a season like this, it is important to promote only when it is absolutely necessary, rather than because the decisions have been made eight months in advance,” he says. “But we have to remain optimistic, because consumer demand is strong. We try to advise our customer on when we think the supply peaks will be and how best to sell the fruit at that time.”
The UK soft-fruit market may have enjoyed double-digit growth in recent years but, with every category that shows strong results, concerns that the obvious avenues for expansion are diminishing, and that the sector will have to work hard to continue moving forward, have started to take hold.
“The opportunities for growth are fewer than they once were and there are weeks of surplus, but we can continue to benefit the domestic market by targeting our volumes and being more clever about it,” says Gray. “The industry has to keep innovating and driving sales, but not at the expense of the grower.
“We should not just use price as a way to increase sales but, instead, look at the rest of the grocery sector to find more sophisticated ways to manage sales - and we need to keep looking at varietal development and added-value products.”
The UK soft-fruit sector is one of the most dynamic in the fresh produce industry and, with all the major growers and suppliers striving to improve their offer all the time, the category has been driven by a string of initiatives and innovation.
Angus Soft Fruits introduced a completely new concept to the UK soft-fruit market last year, when it launched its Good Natured Fruit brand for pesticide-free strawberries and raspberries, which quickly became one of the most talked-about debuts of the season.
The Scotland-based supplier, well known for its premium AVA strawberries and Baby AVA spin-off, has continued to expand ahead of the market.
“Our main point of difference is our new product development,” says Gray. “We identified the need for pesticide-free fruit several years ago, when we foresaw restrictions on pesticides and increased consumer awareness about residues - we had to look ahead of the market because new product development cannot happen overnight. We started a research and development programme four years ago and, last year, we perfected it and released the Good Natured Fruit brand.”
The marque now represents some two to three per cent of total UK berry production and, to build on its successful debut last year, the team held samplings at the Real Food Festival in London two weeks ago, and will officially launch the season in early June, followed up by further events throughout the summer.
“This has been a really interesting development, especially with all the debate going on about organic fruit and vegetables,” says Gray. “Good Natured Fruit is not organic, but it delivers the benefits of organic product.
“It is not much short of a revolution in crop production, and it will take a number of years to perfect and commercialise it, so that is what we will be working on.”
Not to be outdone, the other major players in the UK sector have been busy working on their own research and development.
BerryWorld launched two new and exclusive UK-grown ever-bearer strawberry varieties to the UK market in March. Premium varieties Sweet Eve and Eves Delight have been bred by Peter Vinson from the Edward Vinson Breeding Programme, based in Faversham. They will extend the ever-bearer season, with their availability set to stretch from early May through to the end of October. Both proved popular in comparative taste panels last year, scoring highly for flavour, appearance and yield.
Berry Gardens has been working to promote Driscoll’s Camarillo strawberry, Driscoll’s Maravilla raspberry and Driscoll’s Carmel blackberry in a bid to continue growing demand, alongside its well known premium Jubiliee strawberry.
The way home-grown soft fruit is marketed and sold in store has been key to the growth of the category, and both growers and suppliers are eager for retailers to handle their offer in the best possible way.
“The soft-fruit sector is still at the sharp end of the fresh produce industry, and it is seen as a hero category in retail - in some retailers it is the biggest line in fruit, and it continues to grow,” says Gray. “The fact that a large proportion of the annual crop is a UK-grown line is a big bonus.
“But marketing companies have to be very responsible in how we are representing our growers and marketing the fruit,” he warns. “We cannot grow sales at the expense of grower returns - we need to find a sustainable answer.”
English glasshouse strawberries hit the shelves earlier than ever this year, with Sainsbury’s claiming to have set a new record on March 14. Those involved in the sector insist, however, that forcing the start of the domestic season is counter-productive, and that quality should always come before the origin of the product.
“If you ask any UK consumer when home-grown strawberries are in the shops, they will say the summer,” says Ashton. “There is no harm in promoting the start of the season, but wouldn’t it make more sense to do it at the peak of supply? Quality is the most important factor in growing sales, so we should push berries when they are at their best.
“British soft fruit already gets all the key areas in store, and all the major retailers really get behind it and push the category as a whole, but we should wait until the time and the quality is right.”
The concept of selling soft fruit under a local or regional banner has gained ground this season and, for the first time on a wide scale, the multiples are set to sell strawberries in the county in which they were picked.
UK number-one retailer Tesco is to sell local strawberries in its stores in 11 English counties this summer, following a successful trial with Kentish strawberries last season. The local strawberries will be available in 300 stores across the counties, grown by around 20 suppliers based in Herefordshire, Worcestershire, Avon, Derbyshire, Hampshire, Norfolk, Staffordshire, Cambridgeshire, Nottinghamshire and Berkshire, as well as Kent. The aim is to offer consumers 10 million punnets of strawberries grown within their county during the UK season, while reducing the retailer’s reliance on imported strawberries to less than five per cent throughout the domestic season.
“Consumers want to see home-grown strawberries when they are in season, and this was reinforced last year when they complained after seeing US fruit on the shelves, which had been flown in to cover gaps in supply,” says Gray. “But UK shoppers don’t have the same loyalty to home-grown raspberries, because they are used to a longer import season, and it is the same for blackberries and the small volume of UK blueberries. Going forward, as an industry we have to promote these less well known lines and educate consumers about their seasons.”
The UK soft-fruit sector is better equipped than most to deal with the challenges that lie ahead this season, whether they are to be found on the production side, mounting costs or the expected spike in supply. How the season will pan out remains to be seen but, with public favour on its side, the sector should come out smiling.
No comments yet