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Fresh produce growth is fuelled by higher prices

From:http://www.talkingretail.com/opinions/8255/Fresh-p  Author:Unknown View Times:times  Time:2008-1-23

As we move into the New Year it is time to look back on how the fresh produce category has fared in 2007.

The news is mostly positive – the category is now worth a total of £7.86bn, with growth of 5%.

But this growth has been driven by a 4% rise in average prices, due at least in part to the poor summer and growing season both here and abroad.

However, this has not deterred customers, with penetration levels remaining at virtually 100% of households. Purchase frequency has also increased to an average of 97 times per year, as suppliers and retailers develop different methods of packaging and sell fruit and veg to respond to different consumer needs and changing trends.

Whenever we visit the vegetable aisle we now have to make the choice between organic or conventional, prepared and pre-cut or traditional loose, and even in some cases washed or unwashed.

Tesco has been re-introducing unwashed carrots in certain stores. This idea ties into increasing demands among consumers to know what actually happens to their food before it reaches their plate, and certain consumers are happy to wash their own carrots if it means they are more comfortable with the food they eat.

Of course, healthy eating is becoming more and more important to most people.

According to a TNS usage report, the primary reason for 22% of all meal occasions in the past year was to do with health – compared to 11% a decade ago – and fresh produce is perfectly placed to meet this need.

Campaigns such as 5 a Day have been extremely well received by the public (even if not all of us do manage to eat our five portions every day) and similar campaigns such as Eat In Colour are set to grow in importance this year.

Moreover, while the range of products with an organic version gets wider and wider, produce remains key to its success. Growth in organic produce far outstripped the market at 13%, and we now spend £28m on the sector every year, with growth showing no signs of slowing. Organic bananas, for example, now account for 7% of all banana sales.

New products and ideas may be hitting the market all the time – the past couple of months has seen the introduction of blueberry snack packs and prepared mango products, but inevitably the lion’s share of the produce market is made up of traditional items prepared at home by the consumer.

The produce sector looks set to shrug off the perceived threats from the rise of convenience cooking, alternative products such as fruit smoothies and fresh soups, and even the effect of global warming on growers, and remain a key part of the grocery market, into 2008 and far beyond.

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