Growth in the fresh produce market slowed from 5.2% to 4.6% in the past year to just under £8bn [52w/e 23 March]. With 99.8% of UK households buying into the category, growth is highly dependent on increasing basket size - with price therefore playing a key role.
In the year to March 2007, the average price has risen 6.7%, driven by shoppers trading up to more premium fruit types, while this year it only rose 3.3%. Heavier promotions were to blame, with close to 30% of volume sold on deal compared with 23% the year before. Growth was also slower in the number of trips and the size of each trip.
Volume sales rose 1.3% in the year to March 2008, reversing the decline of the previous year. Growth was driven by vegetables, with fruit remaining in decline. Given the continued media focus on 5-a-day, there have been clear and widely publicised potential drivers for volume increases - but volumes fell the year before despite a similar effort to promote 5-a-day. So how are consumers responding to the 5-a-day message?
Consumption has remained flat over the past three years for both females and males. Adult females have the highest average level at 3.4 daily portions while males eat 3.1 portions. Children have been eating more since 2005, and now average 3-a-day. Only 10% of the population eat the recommended amount and 15% eat less than one portion a day on average, with a disparity in consumption by age group and social class. The affluent overindex most heavily on the full quota, while mass-market social classes overindex heavily on less than one daily portion. The over 65s are the most likely to have 5-a-day, while males aged 17-44 are the least.
Organic continues to increase its contribution to the sector, growing at more than twice the market rate - driven by growth of 11% in fresh veg. Organic accounts for 2.8% and 4.3% of spend on fruit and veg respectively - with price premiums of 29% and 71%.
Tom Hogg, TNS Worldpanel