Fresh produce and its evolution in an atypical scenario
Alimarket Gracn Consumo
After a year 2020 in which the pandemic and its restrictions triggered the consumption of fresh products, the levels relaxed and returned to a state of greater normality in much of 2021. And now, in the last months of last year and the first months of 2022, this market, like most of the large FMCG sector, is facing new vicissitudes. Adverse weather conditions, difficulties in the supply chain, rising prices of raw materials and energy, mismatches between supply and demand... all intensified by the war in Ukraine, have caused us to face a historic increase in fresh produce prices since the end of 2021.
According to data from the consulting firm IRI, provided exclusively to Alimarket FMCG, the Fresh market represents 30% of the total value of Food. With data up to July 2022 for a period of one year in hypermarkets and supermarkets of more than 100 m2, this global category (including fruit and vegetables, meat, deli meats, cheese, seafood and fish) had a turnover of more than 23,362 M€, with an evolution of 1.8% in value compared to the same period last year, and taking into account that the evolution of the average price per volume stood at 3.8%. As we said, in a context of normalization after the extraordinary conditions of 2020-2021, we see decreases in some categories. The highest corresponds to seafood and fish (-10.9% and -2.5%, respectively), followed by vegetables, which remains stable (0%) and slight growth in the case of meat and charcuterie (1.4% and 1.5%). In this sense, cheese (3.7%) and fruit (7.9%) recorded the best evolution, although the aforementioned price increase is a factor with a relevant role in the market at this time. In fact, in both cases it would have contributed, specifically with an evolution of the average price per volume of 4%, in the first case; and of 6.8%, in the second.
What about the performance of the leaders in their respective categories?
The Top 3 of the product families that make up each major category in the Fresh produce sector maintained their positions in the overall market, although they did not develop in the same way in the period analyzed by Iri. Looking at turnover data, and without forgetting the inflationary context in which we find ourselves, in the rolling year to May 2022, tomato, potato and onion led in Vegetables, although while tomato recorded growth of around 8%, potato and onion declined in single-digit ranges. In Fruits, the main category in terms of value growth, bananas grew by more than 16% compared to the second product in terms of sales, oranges, also ranking as the category with the highest evolution of all those analyzed. Sales of this citrus fruit fell by double digits (-10.5%), while apple sales also rose, in this case by single digits (9.5%).
In Meat, while chicken and pork grew in single digits, beef fell moderately (-2%), while in Delicatessen, the three main segments (cold cuts/cooked ham, cured ham and Fuet/salami/salami) showed a positive evolution, between 1.9% and 2.9%. Cheeses also closed in positive territory, although over 6% in the case of imported specialties and traditional fresh cheese, compared to 2.4% for domestic cheeses.
Finally, in the Fish family, the slight decrease in salmon and the moderate rise in sea bream (more than 2%) contrasted with the decline shown by hake, which fell by just over 6%. Meanwhile, cuttlefish led the seafood category, although with a drop of close to 10%, compared to mussels, third in sales value and with a rise of almost 12%. Among them, squid, which also recorded a double-digit decline.
The influence of price on the cumulative 2022
If we focus on the evolution in these first months of the year (cumulative to July 2022), when the effects of inflation have been more noticeable, we find that the price of Fresh has increased about half a point below the total Food (7.2% compared to 7.8%) and its demand has contracted 2.6 points more (-3.2% compared to -0.6%). Although this price increase is generalized across all households, it is Fruits and Fish that have experienced the greatest increase, 12.2% and 8.3% respectively. In this context, sales in the Fresh Produce sector in the cumulative period up to July were close to 13,550 million euros (+3.9%).
Regarding the sales channel, "if in 2020 the sale of fresh products was boosted in the online channel, once back to normal, purchases of this type of product are moderated and consumers confirm their preference for buying fresh products in person, mainly in supermarkets, where they can see, compare and purchase the product of their convenience," said the consultant.
In short, despite this atypical scenario, it should be noted that Spaniards continue to be among the Europeans who consume fresh produce most frequently, considering it an essential part of their regular shopping basket. This is especially true at a time when the trend towards a natural and healthy diet is becoming a significant driver when it comes to purchasing. And in this, markets such as Fruit and Vegetables are at the forefront.