Five a day keeps the doctor away
Health-enhancing and new convenience formats keep this category in growth; with even smaller convenience retailers carrying a substantial fruit and veg offering
11 February 2009 | 0
At a glance: fruit and veg
- The fresh fruit and vegetables category in Ireland continues to grow, driven primarily by the trend towards healthier eating
The Irish salad market is valued at €16.6 million
Florette is Ireland’s number one salad brand, commanding a 28.6% share of Irish salad sales
From 1 July, changes in European Commission regulation on size and texture will allow consumers to purchase irregularly shaped fruits and vegetables
This year the EU will roll out a €90 million EU-wide programme supplying fruit and veg to schoolchildren
Fyffes is the oldest fruit brand in the world and celebrates its 80th birthday this year
Whilst the Fyffes brand is most closely associated with the banana, it also produces Fyffes Gold pineapples and Fyffes melons
Fyffes brand awareness is 24% higher than that of its nearest competitor and 72% of consumers endorse Fyffes as the top quality brand
The fresh fruit and vegetables category in Ireland continues to grow, driven primarily by the trend towards healthier eating, according to market analyst Mintel.
The growing range of convenience formats available and increased consumer demand for ethically and locally-sourced produce also lies behind the sector’s continuing growth. In addition, fruit and vegetables which offer specific health benefits, such as anti-oxidants in berries, are also driving the category.
From 1 July 2009, changes in European Commission (EC) regulation on size and texture will allow consumers to purchase fruits and vegetables of irregular shape that previously would not have been fit for sale; a move welcomed by suppliers. Not only will the rule-change help to reduce food waste but it will also make consumers more familiar with the natural form of fruits and vegetables, which in turn may drive interest in fresh categories such as organic.
The EU will also help create a new generation of health-conscious consumers this year, when it rolls out a €90 million EU-wide programme supplying fruit and veg to schoolchildren, in a bid to tackle obesity.
From field to fork
The strength of the Florette brand emanates from a promise to deliver quality at every step, from the choice and location of salad growers, farming processes, through to the selection and blend of the leaves themselves. This ‘field to fork’ integrity translates into a clear benefit for the consumer, i.e. longer lasting freshness and enhanced quality. And this ‘added-value shelf-life’ is what Florette has become famous for with so many Irish consumers.
Sandy Sewell, commercial director Florette, comments: “Call it a case of demanding extra crunch from the crunch, but the current economic climate means that consumers are wanting more than ever from their fresh food options. Getting five a day is one thing, but as shoppers are forced to justify their choices and expenditure, they are turning to those products and brands that give them the reassurance of the finest and freshest quality, as well as offering convenience and value.”
Florette is currently enjoying strong growth levels in Ireland and an excellent level of brand awareness amongst Irish consumers, in excess of 87%. The market as a whole is worth €16.6 million, with the Florette brand performing extremely well within this. Commanding a 28.6% share of Irish salad sales, Florette is Ireland’s number one salad brand listed across all major retailers.
According to Sewell, the brand’s growth is testament to steady marketing and promotional investment. “2009 will see us again roll-out a heavyweight TV and national press advertising campaign, together with in-store and online promotional activity, all designed to increase brand penetration and frequency of purchase.
“Consumers trust the Florette brand because they know that we are committed to quality but also to variety and innovation, another current trend that we’re able to respond to. As consumers ‘stay in to dine’ rather than going out, they still want to enjoy new tastes and flavours. The ability to explore new leaf variants and mixes is what sets the Florette brand apart and something that our NPD launching this summer will clearly showcase.”
Similarly, the newest Florette range, Organic –available in two varieties, Spinach, Watercress and Rocket, and Baby Leaf Salad – provides a specific product for those ingredient-conscious consumers whose preference is for natural food options such as organic, free-range and fair-trade.
Fyffe times better
In an era where we are seeing huge growth in private label, the Fyffes brand continues to demonstrate strong brand equity amongst consumers. Fyffes brand awareness is 24% higher than that of its nearest competitor. Moreover, 72% of consumers endorse Fyffes as the top quality brand, with just 14% endorsing its nearest competitor (Landsdown Market Research (Mar 2008)).
Fyffes, the oldest fruit brand in the world, celebrates its 80th birthday this year. The endurance of the famous Fyffes blue label brand has driven its category so that the banana is now one of the most purchased grocery items in value terms.
The current ‘Guess who didn’t have their Fyffes today?’ campaign demonstrates Fyffes’ ability to ensure the brand remains fresh and relevant in today’s marketplace despite the fact that it is the oldest fruit brand in the world.
In 2008 the brand launched its ‘Fyffes supporting UNICEF’ partnership, which will last for five years. Fyffes has always remained very conscious of its social responsibilities and is very proud to be able to provide funding to support UNICEF’s work to combat malaria in Mozambique.
March 2009 will see the re-launch of the Freddy Fyffes bagged banana product which is specifically targeted at primary school children. To support the re-launch Fyffes will be running a 12-week nationwide on pack promotion in association with the Football Association of Ireland. The Fyffes Fuelling Active Kids promotion will offer consumers the chance to instantly win one of a number of fantastic prizes including Wii Consoles and Wii Fit boards.
Organics From boom to doom?
Organic produce seemed like a great prospect at the beginning of last year but as we face into a very different-looking economy in 2009, will consumers continue to pay the premium for greener groceries? Well possibly, writes GILLIAN HAMILL
A viable question in the midst of the current credit crunch is ‘will consumers still pay a premium for organic produce?’ According to Bord Bia research released in October, 47% of all consumers would “definitely” or “probably” buy if a 10% premium is charged. But at higher premiums, research showed interest dropped off sharply.
In the UK meanwhile, Mintel has found that organic food is slipping down consumers’ ethical agenda. Nearly half of the UK’s organics shoppers (48%) will consider reducing or giving up buying organic food altogether in 2009.
Buying locally sourced food has become the most important ethical consideration (33%), while 20% of consumers look for organic food and 26% look for Fair Trade produce.
On a positive note however, the organics sector in Ireland has experienced phenomenal growth since 2006. The value of organic sales currently stands at more than €100m; a growth of 82% since July 2006. From January to July 2008, this growth dropped back, but still remains significant at 14%.
In October, 45% of all grocery shoppers said they had purchased at least one organic product in the last month, compared to only 20% in 2003. In light of these conflicting indicators, ShelfLife decided to ask various industry insiders; what does the future hold for Irish organics?
Minister for Food and Horticulture
How have recent developments, such as the scheme to allocate additional milk quota to organic producers, strengthened the organics sector?
“This initiative was one of the actions outlined in my Department’s Organic Action Plan 2008-2012, which I launched in April 2008. The additional milk quota available was very much welcomed by existing operators, who have taken up all the additional quota for the present marketing year. It has also created additional interest from conventional dairy producers.
“As less than 10% of conventional producers are winter producers, it will be a big step for the majority of them to switch to winter/autumn calving for organic production.
“Other successful ongoing initiatives include the demonstration farm programme, National Organic Week and the Organic Awards.”
How important is the organics sector to the Irish economy?
“While the sector is small in Ireland in comparison to the conventional sector, it is growing. In 2006 the total organic food market was worth €57.4m. This increased to €104.2m in 2008, a growth of 82% in the last two years. In 2006 the percentage retail spend on organic food was 0.9% and this had increased to 1.4% last year.
“The land area under organic production (44,751 hectares) stands at just over 1% of the total utilisable agriculture area. The programme for Government sets a target of 5% of the land area by 2012.”
Will customers remain loyal to organic produce in the current economic climate?
“There is no reason at this stage to remain other than positive. The sector is still growing, albeit from a small base. The returns for October 2008 showed a drop in the rate of growth for organic produce. However, the reported 14% growth rate was still well ahead of comparable conventional rates of growth. There are anecdotal reports of a fall off in demand for organic produce but it will take a further few months before the picture becomes clear. It was interesting to note that the UK’s Financial Times on 2 January last forecast a 7.5% growth rate for organics in the UK in 2009 despite recession there. I am very hopeful that the sector will continue to grow though at a more modest pace.”
Bord Bia research has found the perception that organic product is more expensive is the most common reason (77%) for not purchasing. Should organic producers be concerned about this trend and how can it be counteracted?
“Despite the economic recession, it is clear that the organic retail sector is still growing. The retail discounters have reported strong growth in their organic sales and have increased market share, which indicates that customers are willing to purchase organic products at somewhat reduced premiums. In the current climate organic producers must be particularly aware of being price competitive. That being said, consumers continue to demand high quality food both for environmental and health reasons. Such customers tend to remain loyal to buying organic produce when the premium is at or below 20%. Provided retailers operate within this price premium range the market should continue to grow.”
Development manager, The Irish Organic Farmers and Growers Association
Will the organics sector suffer in the current economic climate?
“The organics sector has been growing quite rapidly and steadily. From 2006 to 2007, it grew by over 80%. It is a very valid question as to what’s going to happen now however. I believe there will be continued growth, but at a much slower rate. All sectors are in difficulty, but there is growth in green energy and products.”
How can organic suppliers counteract this? Should they focus more on the environmental credentials of organic produce?
“People now are very concerned about their health and residues in food. They want more natural products and food and are concerned about the impact on farming on the environment. These are important drivers for the organics market. People have lower real incomes which is an underlying factor however.
“Environmental concerns are more powerful and dominant nowadays, and there is a greater emphasis placed on the environment by Barack Obama. Price is always going to be an issue, but there are suppliers who are doing well out there. In the organic sector, there are alternative channels of distribution, such as boxed schemes, direct sales, and farmer markets, which are attractive to consumers.”
What is the future of the organics sector; will it expand into different areas?
“We have now introduced a [certification] standard for cosmetic products, and somebody is interested in this already. Consumers nowadays are very concerned about chemicals and their health.
“The organic sector occupies 1% of the land area, so although it’s smaller in Ireland compared to Western European countries it’s [still] growing.
“There is a continuous pattern of growth and the broader environmental debate is focusing people’s minds.
“In the industrial scale agricultural scene, scares such as the recent pork dioxins scare and BSE scare before that, are periodical scares. However, you don’t tend to get that in the organics sector which inherently promotes organics, and reinforces the importance of the provenance of product.”
(The Irish Organic Farmers and Growers Association (IOFGA) is Ireland’s largest organic certification organisation representing approx. 1,000 farmers, growers and processors)
Ireland’s first certified wholly organic retailer
UK commentators have suggested the organics sector will suffer during the recession. Based on your sales, do you agree this is the case?
“Sales show no sign whatsoever of a recession in Ireland. In fact we had a fantastic Christmas with each department up on sales targets. I disagree with views that the organic sector will suffer in a recession, I think it’s quite the opposite.
“For the majority of people in this country, the recession has resulted in them having more disposable income not less. Mortgages, interest rates and petrol prices are dramatically down. People realise the importance of good healthy food and we provide this for customers with competitive prices.
“Indeed we have noticed a increase in family meal items like organic chickens. We sell 2.2kg organic chickens for €16.95 (considerably cheaper than the large chains). This can provide a family with multiple meals and is great value.”
How can organic suppliers counteract this alleged trend?
“Suppliers need to realise what is important to today’s customer. Price is obviously key but factors like Irishness, environmental concerns and fair-trade are also important. The importance of being local and Irish is now a key ‘buy’ factor. Suppliers need to ensure that their packaging is screaming out these factors. As retailers we need to support these products, a sign saying carrots from Marc farm in Wicklow will sell four times as much as a sign saying 10% off carrots from Brazil.”
Has the number of organic products that are available in Ireland grown in recent months since, or are there significant gaps in the market?
“New organic products are being launched on a weekly basis in Ireland. The market is rapidly growing and now worth over €104m. With that much growth and demand, supply will inevitability follow. We constantly update our website with our new products. We have now grown to over 1850 lines of organic produce. Saying that there are still gaps, one clear one that is screaming out for an entrepreneur to step in is ready to go lunch/dinner organic options. We are very eager to partner with a company that can supply daily fresh organic salad bowls and sandwiches to go. Also, organic convenience meals that the customer can take away is clearly underserved.”
Overall, is your outlook for the organic sector positive?
“My outlook for the Irish Organic Sector is very positive. More farms and producers are converting to chemical free organic methods. We still have a huge amount of growth to go. Every time you turn on the TV we are bombarded with information on the growth of obesity and diet related illnesses. This pushes people to question their eating habits and to seek out more natural alternatives.
“Strangely scares in the meat sector such as the recent pork issue drive a lot of people to seek out chemical free organic meat. Our plan is to open the second Organic Supermarket by the end of 2009. There is clear demand there and we are happy to supply this growing market.”
(Darren Grant is owner of The Organic Supermarket, Blackrock, Co. Dublin, the first certified wholly organic supermarket)