FDBusiness.com

According to ‘Fruit & Vegetables 2013’, a new report by market intelligence company Key Note, the fresh fruit and vegetable industry in the UK is struggling. Still, in 2011, the market grew by 2.8%. This is due to retail price increases rather than a rise in demand for fresh produce.

Due to the economic crisis, cash-strapped consumers are finding it increasingly difficult to afford fresh fruit and vegetables. Although Britons are aware of the importance of eating fruits and vegetables, as part of healthy diet, volume sales of fresh produce have stagnated. In their place, consumers are purchasing frozen variants, which are cheaper. In addition, consumers are opting to eat processed foods that contain at least one portion of fruit or vegetables instead, because they are also convenient. More alarmingly, consumers are simply not eating the recommended 5-a-day because they cannot afford the food. Fruits and vegetables are more expensive than many other products in the food and drink market, making them unpopular during these hard times. In addition, retail prices have increased due to poor harvests, further alienating consumers from the fresh produce aisle.

Fruit and vegetables tend to be expensive in the UK, because many are unsuitable for growth in the climate and must be imported from abroad. This helps to explain why all subsectors have increased in value year-on-year since 2007, in spite of a cut back in demand. Finally, fruit and vegetables are two of the top three most wasted foods in the UK, due to their short shelf- life. By buying frozen fruits and vegetables instead, consumers can reduce waste and further save money. These factors have taken their toll on the market.

Not only are consumers struggling in the fresh produce market, but growers, too, are finding it increasingly difficult to cope with market conditions. Unpredictable harvests that have been poor in recent times; retailers’ dominance in determining the terms and conditions of contracts; competition from cheaper imports; and rising production standards in the UK have created an unprofitable environment for many domestic farmers. Moreover, although consumers in the UK like to support British farmers, their main concern at the moment is price. Thus, they are unwilling and unable to fork out the extra cash to help local growers. This has created an increasingly unbearable situation for farmers and has resulted in market consolidation.

Following an analysis of the market, Key Note predicts that the fruit and vegetables market will continue to grow over the next 5 years. This will primarily be due to retail price increases, instead of a growing demand for fresh produce. Between 2012 and 2016, the value of the market is expected to rise by 11.5%.