Volume decreases in citrus sales over the last 12 months are likely to continue for the foreseeable future, although the downward trend is expected to be tempered by strong prices.
That is the assessment of a leading UK citrus importer, who says overall sales in the citrus category are likely to remain flat in volume terms for the rest of 2013.
However, there are signs of hope, with easy peelers continuing to substantially outperform oranges and hard citrus, selling particularly strongly in the wholesale sector, while there are also indications that consumers are willing to pay extra for quality, especially during periods of low availability.
MMG Citrus, a joint venture between Britain’s Mack Multiples and Martinavarro in Spain, sources more than 60 per cent of its annual citrus volumes from Spain’s Valencia region, with the remainder coming from South Africa and, to a lesser extent, elsewhere in Africa, Argentina and Australia.
Although the company’s Rob Davies says MMG Citrus benefited from a “very good quality” Spanish season, it experienced a reduction in volume sales “right across the high street”, which to a degree had been eased by price inflation.
“As ever it’s a difficult market, but I can’t think of anyone in the produce industry that would say it’s a particularly strong market at the moment,” he points out.
For Davies, the single biggest factor affecting sales has been the move by some retailers away from promotional strategies.
“I think a lot of the supermarkets in the UK this year are looking at promotional strategies and they are not able to do some of the deep cutting offers that they have done in the past,” he explains.
“Whereas certain customers may have done ‘buy one, get one free’ or half price for three weeks and they would have ensured the retail price in the previous three weeks was at the higher level, the interpretation of those rules has changed – we literally can’t do those sorts of deals now.”
Looking forward, Davies says he can’t anticipate any increase in volume sales, which are also being affected by changes in buying behaviour towards smaller, more frequent purchases and away from multibuy deals.
“With the influx of convenience-type stores, people are shopping more frequently and using the whole myriad of different shopping outlets, so you tend to see the average weight of purchases come down, but the frequency of people buying going up,” he says.
Davies adds there is also evidence of “recessional buying behaviour” when it comes to making purchases, while shoppers are “much more conscious about waste” resulting in a lower participation in multibuy offers. The category’s fortunes this year have also been affected by a “very difficult” South African season in terms of both prices and availability, largely as a result of recent Blackspot problems putting pressure on growers and returns.
Much like MMG, fellow importer Fesa UK sources much of its citrus volumes from Spain, in this case through its close association with Spain’s largest fresh produce organisation, Anecoop.
According to the company’s Scott Stainsby, Fesa UK sources around 40 per cent its of total annual citrus volumes from Spain, although it also imports from Argentina, South Africa, Uruguay and Peru in the southern hemisphere and Turkey, Israel, Morocco and Egypt in the north.
Stainsby says that although Spanish orange volumes are down by seven per cent during the season, the large crop from Egypt means the company never felt under any pressure for availability.
He adds that sales continue to be dominated by “£1 offers”, although the firm’s imports of Nadorcott premium clementines also appears to be performing well.
“There’s so much competition across produce, to keep people in citrus you must have a strong offer. You’ve got to give it store space at the right price.” —
BOOST FOR SPANISH CITRUS
Positive results achieved by Spanish citrus growers during the recent season have helped the sector recover its confidence, as José Enrique Sanz, MD of PGI Cítricos Valencianos, tells Steven Maxwell
ecent seasons have, it is probably fair to say, not been easy for Spain’s citrus producers, so the better results achieved by the sector during the 2012-13 campaign have helped restore confidence and optimism in a bruised and battered industry.
For José Enrique Sanz, managing director of Protected Geographical Indication (PGI) regulatory council Cítricos Valencianos, the results of the recently completed season marked not just a break from a poor run of campaigns, but also a return to normality. Valencia’s recent citrus season had, he says, delivered both “satisfactory” results and “very high quality” fruit due to “dynamic” demand and efforts to broaden export destinations. “The citrus sector in Valencia has been dragged down by some very negative campaigns from a commercial point of view, so for this reason the latest season has restored confidence for not just producers but also marketers,” explains Sanz.
“The campaign developed normally with satisfactory returns, plus sales during the season were very dynamic and we did a lot of business in central Europe, including a very significant expansion of citrus exports to markets in eastern Europe and Russia.”
As an organisation, Cítricos Valencianos markets more than 14,500 tonnes of fruit each year from over 7,000 growers spread throughout the Valencia region, with its products now sold under its own brand in several countries.
In fact, Sanz believes that the strong reputation for quality of the Cítricos Valencianos brand has helped the regulatory council and its associated growers to weather the worst of the economic recession and to continue to consolidate its position in European markets. “Although the economic crisis has affected consumption and it is true that this has reduced a little, it would appear that luckily we have left behind the difficult time that we have lived through during recent years,” he says.
For the next citrus season, beginning in October, Sanz adds that expectations are “very positive” with most growers anticipating a good quality harvest. “We believe we’ll have stability in terms of production and we hope to continue with the same sales levels that we have seen over recent campaigns,” he says.
Already present across Europe and increasingly in eastern Europe and Russia, Sanz says the PGI group’s next goal is to achieve exports to Asia, although he admits that phytosanitary protocols would need to be established with several countries to make the ambition a reality.
In the meantime, he stresses the organisation is hoping to improve on recent gains across Europe through the development of an online marketing campaign, which will include promotions through Facebook and Twitter, among other initiatives. —
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