The salads category could be heading for a turnaround now that the big freeze in January has given way to the first signs of spring, with the sun shining and temperatures creeping up.
The market has so far remained flat in the first quarter of 2010, with growth reaching just 0.6 per cent in value and the harsh weather conditions throwing up significant challenges across the UK and Europe. Insiders say that only those with a strong supply chain and the ability to react quickly to market conditions were able to sidestep the setbacks.
At the same time, promotional activity at the retailers has remained at a similar level to last year and has helped to push category sales, but it could not completely counterbalance the effect of the bad weather at the beginning of this year.
“As a buyer, we have found that as a result of inclement weather in the south of Europe, quality product yields have not been as high as other years,” says an insider. “This has resulted in us having to source product from other countries, therefore resulting in a higher-cost product than usual.
“Product quality has not always been consistent and there is significantly less of it because of the weather experienced across Europe this winter.”
Sales only started to pick up last month and interestingly, the premium sector is performing well, pushed forward by consumer preference for peppery leaves such as rocket and watercress, with a 7.4 per cent growth rate and a 37.6 per cent share of the market.
The sector is confident that the prepared salads industry, in particular, is well placed for continued growth because the products are healthy, convenient and represent value for money.
But one of the toughest sub-categories so far this year has been the tomato job, which has taken a beating from heavy rain in two of the major sources for the UK market - Spain and the Canary Islands.
“The tomatoes have had a lot of water on them and excessive water causes splitting, or the fruit can balloon,” says one grower. “The first thing you do is turn off your drip irrigation for four or five days, but that means that the plants are not getting the nutrients that they would normally get from this system.
“Iceberg lettuce has had problems because of the weather conditions in one of the main production areas, in Murcia.
“Problem weather in the Netherlands and in the UK has put supermarkets two weeks behind on peppers, with a few greens being picked off now and reds set to get going in the second week of April.
“At the same time, Israeli pepper production is in a stop-start situation caused by rain in the desert for the first time in a long time and rough seas, which have delayed seafreight out of the country. Now it has gone to the other extreme, and it seems to be getting hotter there, so supplies should get going again.
“Cucumbers are well underway in the UK, but there is still some Spanish product on the market, mostly for the larger sizes. We have had a week of reasonably good sunlight, but we did have some problems going back two or three weeks because there just wasn’t enough light and it affected sizes.”
But salad players are hopeful that product quality will improve and that the market will stabilise sooner rather than later.
The next three months will be a promising time for the salads category and all eyes will be on the British summer forecast and the length of England’s run in the World Cup.
One of the companies looking to the future is UK prepared salad supplier Hazeldene, which is preparing for its second set of field trials in Spain and the UK.
Simon Ball, the company’s managing director, is looking forward to the next quarter. “Spring and summer are when salads become the headlines,” he tells FPJ. “Not only that, but I am quietly confident that this year is going to be a scorcher - surely it has to be after the winter we have just had and the last few summers.
“And following the success of the Spanish and UK field trials last year, our expert agronomist and technical director Simon Hendry is leading another round of trials in Murcia. They will take place during the second week of April and will focus on the development of lettuce and baby leaf types that fit directly with our customers’ requirements. We want to innovate their businesses by producing leaf that gives them exactly what is needed for their products. We believe it will be impressive.”
It is impossible to predict how the market will work out over the next three months, but expectations are riding high for salalds.
FLORETTE LOOKS AHEAD TO SUMMER
Sandy Sewell, commercial director at UK prepared salad specialist Florette, is forecasting a bumper summer for the sector, which is welcome news after January’s big freeze.
It’s only March, but it is already clear that 2010 has been, and will continue to be, a pivotal year for the salad industry. It was a tough start as we experienced the coldest winter for 30 years, but the overall mood is optimistic as the country starts to recover from recession and the growing World Cup football fever offers a welcome opportunity to increase sales. The industry needs to work hard now to realise the full potential offered by this economic recovery and the summer period.
The bad weather that affected Europe in January created massive challenges for the category as a result of the negative impact it had on product supply and consumer buying behaviour. As a result, the market has remained flat in the last three months.
Florette successfully bucked the trend of the market, with growth levels at 20.5 per cent over the last three months due to our continued brand support through extensive above- and below-the-line activity, promotional support and the strength of our supply chain. Everyday leaves and mixes are the heartland of Florette’s bagged salad offering and are performing strongly, with sales growing by 11.2 per cent. The strength of the Florette brand is really helping to drive the variety’s growth, which accounts for 37.9 per cent of the market and is a great family purchase due to its appeal to all family members through its versatility.
This month, we have seen an upturn in the weather and as the beginning of economic recovery sees consumers loosening their purse strings and trading up from wholehead to bagged salads, the category will start to recover.
And then we have the World Cup to look forward to. Apart from the joy of watching lots of great international football this summer, this also presents an opportunity for increased sales. Every year, the summer barbecue season kicks off in May and June and is traditionally a big sales period.
And we expect this sales growth to be amplified further in 2010 due to the impact of the World Cup, with football fans turning match days into occasions for barbecuing and socialising, providing an opportunity for further category growth.
Florette will have a key role to play in these occasions as consumers turn to quality products they can rely on, choosing the Florette brand due to its strong credentials of freshness, quality and taste.
As ever, we will have to continue to face the challenge that is the British summer weather, but the main concern for the category in the next quarter will be to ensure that we all capitalise on the opportunities presented by the summer and the World Cup.
As part of our continued investment in the brand, Florette is spending £3 million on advertising support during 2010. The initial TV advertising appeared in February and March and a second burst will air in May, reaching 67 per cent of all ABC1 women at the perfect time to make the most of barbecue season and the build-up to the World Cup.
The TV advertising also supports our new hand-cut fruit range that we launched at the end of 2009 and has seen us inject growth into the prepared fruit category. We will continue to build on this growth through further above-the-line support, a heavyweight PR programme, consumer press advertising and in-store promotional activity, all designed to drive awareness and prompt trial of the new range.
So there really is a lot happening this year - here’s to a great 2010, a barbecue summer and a great World Cup!
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