The soft-fruit market is approaching a key transition period in its calendar, with suppliers set to switch sources to work out the best possible options for their customers, before the UK season gets into full swing.
Easter was earlier than usual this year, and suppliers say low temperatures, wet weather and, in some cases, snowfall have failed to give the category its usual bank holiday boost. However, this is not to say that sales have fallen significantly. Shoppers may have piled their trolleys high with chocolate eggs, but they also picked up punnets of soft fruit to make up for it, and the sector hopes this will continue as consumers try to undo their long-weekend indulgence.
The sector is looking forward to week-on-week growth when the sun starts to shine, and more consumers opt for soft fruit.
“Soft-fruit sales never really get going until the weather turns, so we are not expecting a boost just yet,” says one supplier. “Sales into Easter were fine, but we did not get a huge uplift over the bank holiday.
“The growth of the soft-fruit market continues to be very positive,” he adds. “The Winter Berries Campaign has continued to do a lot of good work this year and, with support like that, it gives us a really good platform for moving forward.
“Sales took longer to get going this year because of lack of availability, but we are now looking at healthy numbers, although we have only just recovered from the delay.”
The four major berries - strawberries, raspberries, blueberries and blackberries - have had some ups and downs in their supply patterns this quarter, but there have been no major issues. UK suppliers say that, with the exchange rate against them, this has proven the biggest obstacle in the last three months. The only way to overcome this, they say, will be to increase retails.
Poor weather in Egypt and Israel initially caused strawberry shortages in January and, given the tight supply, prices were higher at the start of the year than they were at the beginning of 2007. Suppliers then switched to Spain and Morocco as soon as product became available and, in most cases, these are still the major sources for the UK market, with peak volumes expected in April.
Spanish product quality has been significantly better than last year but, volume-wise, peak supply was two weeks behind last year. The improved appearance, eating quality and shelf life have given sales a welcome boost, but this is not to say that achieving balance between supply and demand has been smooth sailing.
“It has been a really tough Spanish season, with the exchange rates against us, and fruit has cost 10 per cent more to buy,” says an insider. “It has been quite a challenge but, that said, we have seen growth across all lines in the last three months.”
English glasshouse strawberries have hit the shelves earlier than ever this year, with Sainsbury’s claiming to have set a new record on March 14. Increased volumes are set to come onto the market in the next few weeks, but UK glasshouse fruit will not come on stream in volume until late April.
Importers have worked supplies of raspberries, blueberries and blackberries in order to meet increasing UK demand.
The raspberry sub-category has been the real winner this quarter, even though volumes were also slow to get going in January. The number-two soft fruit has shown strong growth, particularly at retailers that have stocked smaller 170g punnets on special offer. Suppliers have sourced from Spain, Morocco and the US to meet demand, but availability tightened up again last week. “The problem has been in getting the right returns for growers,” says one importer. “Spanish raspberry producers are getting returns that are 18 per cent lower than they were at this time last year.”
Blueberry sales have been strong all the way through the last quarter, with promotions fuelling consumer interest, but growth has slowed down notably on this time last year. The promotions, which were extended for three weeks this year, have now ended and retails are on the up. Whether this will hit sales remains to be seen, but suppliers are confident that, with its well-established position as a prominent superfruit, sales will continue to grow throughout the rest of the year.
The blackberry sub-category has had a few supply issues this quarter, but overall growth has continued its upward march. Spanish supply will arrive on the market from the end of April, or the beginning of May. “Mexican blackberries have a natural dip in mid- to late February, when retailers come off promotion,” says one supplier. “But growth this quarter has continued to be good.”
Wholesalers working the berry job this quarter have seen relatively few supply issues, although their supplies are dictated by which sources and products the retailers are working with.
Strawberry prices have hit the floor in recent weeks, with the ongoing wet weather affecting demand, meaning traders have struggled to shift the fruit. “Strawberries are very cheap at the moment because it’s still cold and demand is low,” says one wholesaler. “No one is going to eat strawberries around a fire, are they?”
The supply of Spanish raspberries, Chilean blueberries and Mexican blackberries tightened up in the run-up to Easter, keeping prices firm and ensuring quick movement through the market.
Spanish strawberries fetched 500-550p for 12x400g on a London market last week, while Chilean blueberries made 1000-1400p for 12x125g, depending on quality.
Supplies of both raspberries and blackberries were so tight that a berry specialist on the same market did not have any in stock.
“We have lost a lot of business to the supermarkets, but we still have customers out there if we get the right weather and the right trading conditions,” says one trader, who supplies mainly street markets. “Wholesalers still sell plenty of berries.”
Insiders across the soft-fruit category are hoping that sales will pick up in line with availability, and that warmer weather will fuel demand in the run-up to the UK season. “Retailers are giving soft fruit more shelf space and driving growth with PR and promotions,” says one supplier. “The market has been fairly slow this quarter but, in the next three months, it should really get going.”
SEYMOUR BACKS SUSTAINABILITY
Sustainable growth has been the headline since Well Pict European Ltd’s inception in 1998. In our 10th anniversary year, we can look back at achievements and we look ahead to new challenges, writes chairman Martin Seymour.
Some 10 years ago, we looked at our industry and we tried to analyse the risks from a grower’s perspective, rather than the view we had previously been taking, which was that of purely a marketing desk. It was clear that there were large problems ahead, including:
• shortage of manual labour;
• rising cost of labour;
• low yielding soft-fruit varieties;
• increased burden on employers regarding health and safety;
• increased demand for assurance schemes;
• unattractive industry for university graduates;
• cost-effective crop protection;
• inability of UK growers to grow soft fruit 52 weeks a year; and
• increasing cost to transport our products.
We made a decision to address these - and other issues as they have become important in our industry - with a view to ensuring that growers could produce crops profitably, ensuring the future of the industry.
Fruitful Ltd was a created to source labour for farms, putting an emphasis on the inductions given to workers before they even leave their home country, putting in place innovative solutions such as allowing workers to pay for their travel costs once they had started working in the UK, or providing speed training to workers to increase productivity, and thus reduce average cost per kilo in the face of annual increases to minimum wage. The company now supplies more than 4,000 workers in the UK, Iberia and South Africa.
New varieties are the holy grail of the industry. A high-yielding, great-tasting, easy-to-pick variety is what we all need - many have claimed to have found the solution, but most have fallen by the wayside or have resulted in higher costs to growers - a great-tasting berry that only yields an unsustainable amount of fruit is not sustainable for our growers. We have invested in trialling on our own farms, instead of asking our growers to take the risk. We continue to work with Plant Sciences, Planasa and Reading University, and we continue to seek the varieties that work for growers and consumers alike.
Our direct involvement and ownership of production has given us an informative insight into what growers need to be efficient and productive. The result has been the development of Crop Pro Tech, which has successfully brought down costs in crop protection, as well as bringing innovative solutions in other areas of soft-fruit production, for example the You Are What You Eat platform and harvesting.
As UK growers ourselves, we have taken the decision to invest in production that complements the UK season, but that maintains the strong emphasis on quality expected from UK fruit that is not always replicated in some overseas production.
Flexibility is vital in our industry with regard to transport. When we could not get the service that we required we started our own transport company, Fresh Logistics, to design a logistics solution that meets the needs of the grower and the retailer, and not the needs of the transport company to make a profit. The ethos has been extremely successful, and it is recognised as the UK’s leading soft-fruit haulier and, as a bonus, it makes a small profit.
The largest threat to our industry that I see is irresponsible marketing by marketing desks that do not put an equal importance on the sustainability of the supply chain for the grower, as well as the needs and wants of the retailer. We are entering into a new phase of co-operation and a willingness to work within the industry to the benefit of both growers and retailers, seeking ways of securing sustainable growth for the whole industry.
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