The result of supermarkets choosing iceberg lettuce as weapon of choice in the ongoing price wars was never going to be pretty, and the impact is starting to be felt in the salads category.
Total salad volumes have increased by 4.9 per cent while the value of the category has dropped by a startling 7.8 per cent [Kantar Worldpanel, 52 w/e 7 December], driven primarily by a decline of 12.7 per cent in lettuce value.
The price per kilo of lettuce has dropped by 19 per cent, according to Kantar, as multiple retailers matched discounters on iceberg pricing, leading to deflation in the category and pricing pressures for suppliers.
“The deflated retail price points have resulted in significant price pressure from retailers,” says commercial manager at Shropshire salad grower PDM Produce, Matt Boyns, who earlier this season told FPJ that sales could “fall off a cliff” if consumers become disillusioned when retailers eventually put their prices back up.
Chairman of the British Leafy Salads Association, Graham Clarkson, says deflationary pricing, from around 99p with intermittent promotions to an EDLP of 49p, has moved shoppers into iceberg at the expense of other wholehead and prepared salad lines. “This is a trend we are seeing across all produce, with retailers competing hard on core lines, thereby simplifying their range and making big lines bigger,” he says.
And it hasn’t only been a difficult season for iceberg. “Romaine has been a bit of a casualty, with volumes down 13 per cent and value down 17 per cent,” says Boyns. “Gem volume is pretty static across the market, but the discounters have seen volume growth. Volume on unwashed salad has taken a significant decline, however unwashed spinach has seen approximately 30 per cent growth year on year.”
Anthony Gardiner, marketing manager at salads giant G’s Fresh, says that while mainland Europe has been grappling with oversupply of iceberg, in the UK deflation has driven volumes.“With selling prices under pressure, this results in reinvestment in the category being limited,” he adds.
Growing conditions in East Anglia have been good throughout the summer, Gardiner reports, but although the Spanish season started well, major growing region Murcia has been hit by frost in the past two weeks, causing considerable damage.
In the wider salads category, peppers have also declined in value by 10.4 per cent and have seen volume growth of 10.7 per cent. “Tomatoes, peppers and cucumbers continue to perform well, with aubergines becoming an emerging crop following recent coverage on BBC TV’s Countryfile,” says Lee Stiles of Lea Valley Growers, who adds the first Lea Valley cucumbers were planted last week and are on course to be ready by Valentine’s Day.
Stiles says there is an “unprecedented demand” for British produce, but warns there are signs that “continuing pressure on prices is unsustainable”. “The Lea Valley is leading the charge to increase the UK’s self sufficiency for salad produce with over 50 acres approved for construction last year,” he adds.
Prepared salad and snack firm Freshtime’s category manager, Claire Matson, says the food-to-go salad market has “cautiously flatlined”, although the later months of the year saw a positive uplift driven by milder autumn weather. And prepared salads seem set for a rosy future, as Clarkson says while sales are slightly down on last year, it remains the most popular format of salads and is in “long-term growth”.
Branded products continue to flourish in the salads market, as Florette has begun its “high-impact” 2015 marketing plans for new product Baby Kale, and Vitacress brand Steve’s Leaves has recorded a 26 per cent sales increase in the last 12 months.
No comments yet