Against the odds, it seems that the salad sector has survived the Christmas period and sales have been fair due to steady demand. November was a slow month for suppliers and the category was hit hard by both below-standard salad products coming in from Spain and the continued weakening of sterling against the euro.
But although December had its ups and downs, the Spanish shortage was short-lived and quality took a turn for the better in the week leading up to Christmas. “The quality of iceberg lettuce, tomatoes and cucumber from Spain got better and better towards Christmas and producers seem to be over the worst,” says one wholesaler. “Winter salads have not been overpriced as quality has been very good but, if Spain gets some cold snaps in January and February, the job could get tighter and more expensive.”
In a turn-up for the books, consumer demand increased and shoppers did the unexpected and went for more premium salad products, despite the financial crisis. Traditional favourites at Christmas time such as Romaine hearts, Little Gem and speciality tomatoes still sold well and, according to insiders, basic and value line sales have been poor, with consumers keen to trade up to premium produce.
“Salad sales have been pretty good over Christmas and volume sales are in line with what was expected,” says one supplier. “Unwashed rocket, spinach and lamb’s lettuce seems to be selling well. There has been a shortage of spinach from Spain, due to misplantings last autumn and wet weather. Availability of the product is very tight at the moment, but we expect the situation to subside in two to three weeks’ time.”
Watercress has also seen demand improve over Christmas, and insiders believe that consumer-facing promotion of the product has paid off. “We have been promoting watercress as a product that can be used in all sorts of dishes,” says one source. “Also, retailers have put a huge focus on quality. Sainsbury’s has guaranteed freshness in store and many retailers are reducing product-holding times. Watercress will be lasting longer than ever before.”
Retailers, however, failed to react to the surge in demand. Eagerness to avoid wastage and a surprise influx of bargain shoppers immediately before Christmas Day meant that multiples missed out on the chance to bring in extra sales.
“Retailers bottled it in terms of orders for December 23 and 24,” says one insider. “They slowed down their orders and underestimated, or did not plan correctly for salad consumption in the lead-up to Christmas. When people went into the stores throughout the country the two days before Christmas, there was insufficient stock. I guess it is a mixed blessing for the retailers: on the one hand, they have missed out on sales but on the other, nothing has gone to waste.”
The multiples have left the salad sector disappointed and many expect that the preoccupation with wastage both on the shelves and in consumer homes will continue. “We expected more orders to come in and the retailers’ shelves were left empty,” says one supplier. “We are now close to going the other way and undertrading. Christmas was very disappointing at times.
“The period is always a gamble, but shoppers were definitely buying late this year. And most retailers were closed on Boxing Day. I cannot remember the last time that happened and it must have affected their bottom line.
“It has been a Christmas of lost opportunities - stores have either been shut or shelves have not been filled.”
As the salad sector enters the second trading week of the new year, insiders are hedging their bets as to whether economically burdened consumers are still going to embrace the traditional health kick that dominates eating patterns until spring.
This time last year was a terrific time for the sector, but this is the first year that the industry has doubted whether the healthy eating drive will materialise.
The first week of 2009 bodes well for the rest of the quarter, with some suppliers’ sales going up by more than 10 per cent, but this week - the first trading week that has been uninterrupted by bank holidays - started to see a low-order pattern emerge as FPJ went to press.
“The next couple of months will be dependent on consumers’ lifestyles,” says one insider, “and we will find out if healthy eating is a want or a must. Everyone wants to be healthy, but whether they actually do anything about it when money is tight is another issue.”
But the big challenge for the sector remains the devaluation of sterling against the euro, especially during the winter months. And the industry is crying out for the product price to increase, due to inflation at the farm gate rising by up to 30 per cent for some salad producers in 2008.
“We have passed on some of the costs, but it is extremely difficult - especially when it is passed onto the consumer,” says one insider. “This year more than ever there is going to be a greater differential between the price of UK produce and that of imported produce at consumer level. Consumers will become aware and it will be the same for them as accepting that the price of their European holiday has gone up.”
And as the UK salad industry embarks on the new year, it is faced with a conundrum. After two poor summers, producers in the UK and Europe are becoming more and more conservative with their planting programmes, to the extent that if the UK did have a good summer in 2009, there would be a massive shortage of salad products.
“Sales have been slow over the last two years, but a good summer can bring up to a 20 per cent raise in demand overnight,” says one source. “No one knows what is going to happen, but we need to think about our programmes now and prices need to be re-adjusted so producers can invest.”
OUT WITH THE OLD, IN WITH THE NEW
Last year was a big year because we introduced a new product onto the market for the first time in more than 30 years, says managing director Jan Bentley, third generation of family-run salad cress producer WS Bentley (Growers) Ltd.
The business started off as a market garden specialist in salad onions, beetroot and radishes for sale or return to wholesale markets in the 1950s, but the following decade my father turned his hand to growing salad cress after reading an article on the subject. Over the years, as the wholesale scene diminished, our focus switched to supplying retailers and we now produce up to 270,000 punnets of salad cress a week, mainly for Morrisons and Asda.
We looked into growing different kinds of cresses, which other companies have had success with by supplying the foodservice industry, but we concluded that this would not be viable in the retail market. So we decided to go into sprouting alfalfa and mixed beans, and move away from the traditional cress market altogether on the lines, so we did not confuse or put off our core consumer demographic. By moving into convenient washed and ready-to-eat sprouting seeds, we aimed to attract a different kind of customer and, hopefully in a few years, they will be ready for different kinds of cress.
So we introduced ready-to-eat alfalfa and mixed beans packs under our new And Sow On brand into The Co-op in January 2008. It was a scary time as the reality was that if the products were not selling we could be de-listed in the next three weeks. But fortunately the sales graphs went up and up - even more than our cress.
It peaked in May when the weather became warmer and then, from the back end of May, the year was a write-off. The weather took a turn for the worse at the same time as the credit crunch took hold of the country and shopping patterns changed. Through the course of the last part of the year, consumers just bought the essential groceries and both salad cress and the And Sow On brand suffered. Our overall sales were down 10 to 15 per cent on the year before.
Sales of alfalfa seem to follow the pattern of salad cress, but mixed beans go against it and do not seem to have a pattern at this stage. Demand for traditional salad cress was strong in the week leading up to Christmas, while And Sow On sales have been slower, although sales are expanding as we move through the health kick in January.
Production has been steady and we have not had any major glitches. The biggest concern last year was the horrendous price of electricity and it has had a big impact on us, as we grow salad cress partially under artificial light.
At the beginning of November, the weather was fairly mild and so we had a good run with production, but in the weeks leading up to Christmas there was a cold snap so we had to heat and light our greenhouses more than usual. Some of our products are fully grown and ready to go to the store in 48 hours, so we have to react quickly to any change in the weather.
This year, we have increased our And Sow On product range with a leek and alfalfa mix, which is launching into Booths. Three other new products will launch throughout March to coincide with spring marketing. The packaging will shortly be revamped, with different artwork, nutritional information and a ready-to-eat banner, which was a big omission first time around.
Our main aim this year is to sell more of the brand and to do this we will start a consumer-facing promotional campaign targeting consumer food, health and fitness magazines. Last year, we concentrated on getting retail buyers to recognise the brand and getting some coverage in trade magazines, but now we need consumers on board.
We have won quite a few awards this past year, including a gold star in the Great Taste Awards and Deliciouslyorkshire’s Innovation Award, which has helped to raise our profile, and they are also great to show the retail buyers. And later this month, we hope to be launching our And Sow On products into another major supermarket.
The weather, more than anything, is going to affect the market this quarter. Sometimes I think that a contributing reason for the recession is the fact that this country has not seen sunshine for two years. But, on a serious note, consumers are desperate to get out into the garden and put a barbecue on. It would be good for our business and the salad industry really needs it.
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