The start of the cauliflower season is shaping up as a warning signal for the rest of the winter vegetable category, as those supplying home-grown lines, from brassicas to carrots, cabbages and Brussels sprouts, fight for better returns in the middle of an all-out supermarket price war. The cauliflower market has already been described as a “total disaster” and insiders are warning that the rest of the winter offer could be facing a bleak future if the situation does not improve.
The latest Kantar Worldpanel figures to the end of October show that vegetables have actually seen value and volume growth, at 3.6 per cent and 0.9 per cent respectively. The full rundown, however, shows that winter lines including cauliflower, carrots, parsnips and turnips are in decline. In fact, a series of retail price promotions across the fixture have skewed the category.
Insiders agree that they are facing a new set of hurdles this year, with record autumn temperatures and sustained mild conditions bringing on a whole range of winter vegetables while at the same time putting the brakes on demand. This has pulled down prices, meaning that many are now operating below cost.
The cauliflower season, in particular, has been hit hard. The market is looking at a “tidal wave” of the vegetable, with some growers in Cornwall reporting that they are already halfway through their harvest and others already cutting early February varieties. A flurry of 50p a head price promotions has helped shift volumes, but growers are getting less than half the returns they need to break even.
The flood means that inevitably, a supply chasm of up to two months could open up in the new year and a question mark hangs over how this will be filled given that growers on the continent are sharing similar experiences.
“It’s a total disaster,” says Greville Richards, managing director of Southern England Farms. “It’s probably been the worst time for cauliflower in 40 years, I’m hearing. We have a tidal wave of cauliflower, we can’t cut everything we have. There are acres and acres going to waste. There are whole fields in Cornwall that are not going to be cut. Prices are on the floor. There has already been a huge decline in the growing business in Cornwall over the years, but this will be the final nail in the coffin. It’s going to be curtains for a lot of acreage and a lot of growers will be considering their options next year.”
Will it be yet another round of suicide selling? “It’s at that point already,” says David Simmons, managing director of Riviera Produce. “I have to say that the retailers are being responsible in their approach so far though. They are realising that even though there is a lot of product around, growers still need better returns, but it’s difficult.”
At a crucial point at the beginning of the winter season, price is the number-one concern, especially against the backdrop of rising production costs including hikes in energy, fertiliser and labour expenses.
And it’s not just cauliflowers that have been affected. Another case in point is carrots, which have seen both value and volume figures slip in the last 12 months. “One of our big issues is production costs,” says Martin Evans, chairman of the British Carrot Growers’ Association and managing director of Freshgro. “They are not in line with consumer expectations on price, and they continue to increase.”
Straw, for example, represents 50 per cent of production costs but growers can expect to pay 30-40 per cent more for it this year, while a host of other input costs also rise. At the same time, recent promotions have seen prices slashed by 30p a kilo - a cut that Evans insists is “unsustainable”.
“It is very worrying,” he says. “If you look at profit figures in the sector, well, there aren’t any. If anything, it’s going the other way. Some carrot lines have been the same price for five years, but at the same time the minimum wage has gone up by 18 per cent and fuel has virtually doubled.
“Investment is very limited, but we have to try to remain consumer-focused and innovative,” he continues. “In some cases, this means investing the family silver into retail. If you look at something like iPhones, there is the investment to keep up with consumer aspirations. But we don’t do that in the fresh produce industry.”
Even lines that are widely touted to be experiencing a revival are not stacking up in the way they should be financially. Brussels sprouts, for example, are winning more consumer interest but insiders fear that this is not being translated into returns.
“Sprouts have had a reinvention,” says Chris Molyneux, director of Molyneux Farms. “But I think that like everything else, Brussels sprouts have been affected by the same marketing issue - dare I say it, the red sticker disease. We have had quite a few promotions, everyone is under pressure and profitability will be tested.”
It seems like a Catch 22, so what are the options? How can the sector come back from this situation, which it finds itself in year after year? “Keeping consumers engaged is a constant challenge for us,” says Evans. “Vegetables are always there in line with what’s available and we need to remind consumers not to take them for granted. Like milk, you can’t just assume that they will always be there.”
Many are already diversifying so they can spread the risk, opting into new lines at different times. Asparagus, for example, is now proving a very interesting prospect for Cornish growers who previously focused on winter vegetables.
Some are looking for varieties outside the mainstream, in a bid to make a premium for something special. Others are focusing on versatility as a selling point, whether it’s showing consumers that cauliflower can be stir fried as well as used in traditional recipes or that carrot sticks can make a handy and healthier alternative to crisps and chocolate when it comes to snacks. It is clear that the category remains a key staple, but the sector will still worry that if better prices can’t be negotiated, the future of winter vegetable production could be put in jeopardy.
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