Spurred on by increasingly exotic foreign holidays and the quest for new and exciting tastes, consumers are continually on the lookout for a little slice of sunshine when they do their weekly shopping these days - which could go some way to explaining the success of the pineapple in the UK market in recent years.
The market grew by nine per cent in value and 24 per cent in volume in 2007, with growth solely driven by penetration standing at 24 per cent, according to TNS figures. Some 30 per cent of the UK population bought pineapples at least once in 2007 - either as fresh, which accounted for 54 per cent of sales, prepared, which accounted for 23 per cent, or canned, which also accounted for 23 per cent. The UK pineapple market last year was worth just under £100 million.
And growth shows no signs of slowing down. Sales of both wholehead and prepared pineapple are continuing to grow strongly year on year and ahead of the total markets in which they operate. Wholehead pine volume growth of 16 per cent for the 52 weeks ending September 13, 2008, compares to a static total fruit volume for the same period. Prepared pineapple volume growth of 33 per cent compares to a total prepared fruit growth of 12 per cent for the 52 weeks ending April 20, 2008. The total market for wholehead pine is valued at some £53m and for prepared pine at £25m.
“TNS data to September 7 shows prepared pineapple experiencing strong growth over all time periods - 52 weeks up 19 per cent, 12 weeks up 11 per cent and four weeks up 18 per cent,” says James Harvey, managing director of Del Monte UK. “In addition to this market performance, Del Monte is experiencing strong, year-on-year demand [for prepped]; we are not seeing nor experiencing any slowdown so far.”
But JP Fresh group marketing manager Dickon Poole says that while the standard fresh pineapple market is growing at around 20 per cent annually, fresh-cut growth has slowed significantly from the previous rate of around 33 per cent. “It may be that people are re-thinking the whole cost of convenience,” he tells FPJ.
JP Fresh data reveals that the overall pineapple market has doubled in three years, from being worth £43.1m in 2005 to an estimated £82m by the end of 2008 - and the firm is forecasting consumer expenditure of £86m in 2009.
Indeed, wholehead sales are certainly progressing well - TNS data for the 52 weeks ending September 7, 2007 shows wholehead expenditure stood at £47.8m, while that had grown by 11.7 per cent to the 52 weeks ending September 7, 2008, at £53.5m. Volume was also up 14.6 per cent year on year.
TNS data also shows that for the 52 weeks ending August 10, Tesco held a 35 per cent share of the retail pineapple trade, compared to a 40 per cent share a year earlier, Sainsbury’s held 15 per cent compared to 16 per cent one year earlier, Asda held 10 per cent compared to nine per cent a year earlier and Morrisons was static at nine per cent in both time periods.
Sales in June and July broke records this year due to heavy promotions organised by the major retailers to coincide with peak supplies of the super-sweet MD2 fruit - the variety that now dominates the UK market.
“Overall sales have been fairly stable these past 12 months,” says Mitchell Noakes, commercial account executive at Keelings (UK) Ltd, which supplies pineapples to UK supermarkets, fresh-cut processors and wholesale market clients. “We have experienced the largest promotion to date with a two-week offer earlier in the year; however, the credit crunch has indeed taken its toll on regular sales.”
Pineapples come to the UK from a range of sources, including Costa Rica, Ecuador, Brazil, Honduras, Ghana, Ivory Coast and Cameroon. JP Fresh sources fruit from Costa Rica, where it operates farms in the north west of the Central American country, near the port of Limon. The area enjoys a steady amount of rainfall, which is important for pineapple production.
JP also sources pines from sister company and fellow Dole subsidiary Compagnie Fruitière, the largest fresh produce company in Africa, working with sources in Ivory Coast, Ghana and Cameroon. JP is also developing supply bases from Ecuador.
Del Monte is itself the largest Costa Rican grower and the firm sources directly from its own farms, says Harvey. “There are many benefits to being a vertically integrated company, including the direct management of an efficient supply chain and consistency of supply,” he explains.
Keelings handles approximately 1,000 containers of pineapples a year and currently sources 100 per cent from Costa Rica, which Noakes says is still regarded as the number-one source for pineapples in terms of continuity of quality. However, the firm has also developed suppliers in Ecuador, Ghanaand Panama, in order to reduce any issues caused by sourcing 100 per cent from Costa Rica.
The market is dominated by super-sweet variety MD2, production of which has soared, says Toni Direito, commercial director at JP Fresh. The retailers have doubled their promotions in the last five years and so production has also needed to react.
Fairtrade and organic suppliers are also supplying the Sugarloaf variety, a conical pineapple, into the UK market. “Organics is still a niche in the pineapple sector, although we believe an organic MD2 will offer better eating quality and uniformity compared to the Sugarloaf,” says Noakes.
But nonetheless, producers face challenges such as demands for lower pesticide residues, climate change and the quest to reduce their carbon footprint. “Growers’ costs have gone up and they will start to chase new markets,” says Poole. “North America is the biggest market for Costa Rica. Europe is also growing a lot as a market, but it is not as easy to sell product there as the UK.”
Noakes adds: “Growers have been affected by increased costs from fertiliser lines, agrochemicals, bunker and labour and also, as per every year, they have had the task of planning accordingly for natural flowering volume - which results in up to six or seven weeks of production being available over a two- to three-week period.”
Another issue for growers is continual downsizing of the products they can use to grow and treat fruit, to the extent that retail shelves may soon be graced with greener fruit than the UK consumer is used to. Just two weeks ago, the European Commission decided to maintain the ARfD(Acute Reference Dose) of 0.03 for Ethrel - a product used for de-greening purposes - entailing serious lower maximum residue levels (MRLs).
While the European Food Safety Authority (EFSA) as risk assessor has judged that the ARfD of 0.05 could be supported, the commission in its role as risk manager has decided to include a safety factor. Applying this safety factor to the EFSA proposals coincides with the former ARfD of 0.03.
The commission will be able to proceed with a decision on the lower MRLs and seek an opinion of the member states in a meeting this month.
A lower MRL will mean that Ethrel will not be able to be used for de-greening purposes, leading to greener fruit on the customer shelves.
But Direito insists that a greener colour will not affect the eating quality of the fruit, and perhaps there is a need to inform consumers of this. “There is the perception that pineapples have to be completely golden when it really doesn’t matter too much internally,” he explains.
There has also been a shift in the sizing required by the UK market - they used to sell size eight and nine, says Direito, but then that went down to eights and,over the last few years,more and more customers have been demanding sevens. “Everyoneis also moving tosmall fruit- 10s and 12s - as we speak, which is not always there, at prices that are not sustainable,” he explains. “We are moving into the 99p price point, which could devalue the category, although it may bring more people in.
“It will be interesting to see where it goes in the next four months, when core lines come on stream. It is a bit of a sticky period right now. The key thing is where the market will go on sizing.”
Noakes adds: “We changed the range of sizes almost two years ago to offer the customer as much choice as possible and as a result of the credit crunch and downturn in sales, we have launched a value range, offering a smaller-sized pineapple than the main line, which has proved to be very successful with our clients.”
The fresh pineapple sector may struggle in the credit crunch, Direito believes, with people looking at cheaper, value alternatives - meaning the canned sector may be able to cash in.
But there are undoubtedly still opportunities to grow sales further, despite the challenging economic climate. Nick Kendall, Sainsbury’s banana and tropical buyer, says: “All fruit can be considered a luxury or discretionary purchase; however, consistent quality combined with some promotional activity should encourage customers to continue to purchase pineapples regularly, despite unpleasant economic conditions.”
Poole agrees. “Penetration is growing,” he says. “More and more people are coming into the category and more and more must be getting used to the fruit - in the old days people didn’t know when it was ripe and ready to eat or how to prepare it. There is still some need to show consumers what to do with the fruit.”
The UK pineapple market traditionally experiences an element of seasonal downturn coming out of the summer period, says Harvey, but with sustained growth in all consumer measures, notably the number of new consumers buying pineapples for the first time, the firm expects to see year-on-year market performance continue to go from strength the strength.
Annual household penetration of wholehead pine is only at around a quarter, 22.9 per cent, according to Del Monte, meaning that there is still much more incremental category growth to be had by attracting new consumers into the market and encouraging existing users to buy additional pineapples on a more regular basis.
“With the promotion of the 5 A DAY initiative, there is a huge opportunity for produce brands, such as Del Monte, to excite consumers with stories of provenance, expertise and quality, as well as practical advice on preparation and recipe ideas,” says Harvey.
The formats of fresh prepared pineapple available to the market are also changing, says Harvey, helping to keep the sub-category fresh. “Historically mainly sold in chunks, prepared pineapple is now found as fingers and skin-on wedges, which all promote its usage as a healthy, delicious ‘taste of the sunshine’ snack,” he says.
Del Monte believes pushing the health attributes of pineapples would be a further way of boosting sales of the fruit - its naturally high levels of vitamin C and protein-digesting enzyme Bromelain - as well as its versatility in both sweet and savoury dishes.
“There has been an increase in in-store promotional activity over the last year as retailers benefit from the growth potential for pineapple,” says Harvey. “However, more communication on how to prepare pineapples at home and how to use them in both sweet and savoury dishes will help maintain growth and encourage new and less frequent users to add pineapples to their repertoire on a more regular basis.”
Traders are therefore optimistic that the pineapple market can weather any effects of today’s economic climate. “Costa Rica is still deemed to be the number-one source and, combined with the MD2 variety, which guarantees such a great taste time and time again, we still see huge growth potential in the category,” says Noakes.
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