With price deflation hitting the entire UK fresh produce category, shoppers have proven they are willing to pay a price premium for the convenience of prepared fruit and vegetables, especially potatoes and value added vegetables. But wholehead remains important to consumers, leaving retailers an opportunity to engage shoppers with event-based marketing, particularly in the run up to Christmas. Produce Business UK highlights the analysis provided exclusively by Kantar Worldpanel
View the full presentation here.
Prepared produce has had a phenomenal year on the UK grocery market in the 52 weeks to 13 September 2015, with category value growing 11% to £771.4 million, as shoppers buy more often (see Slide 1).
Value up 11% to £771.4 million
Volume up 13.7% to 195.9m kg
Price (per kg) down 2.3% to £3.94
Within the prepared category both fruit and veg sectors have recorded double-digit growth in value terms, as illustrated in Slide 2. Prepared fruit is up 14.2% (compared with +4.8% for wholehead fruit). But special attention should be given to prepared vegetables, whose value is up 10.1%, while, at the same time, the wholehead vegetable category is in decline, with value falling -4.6%.
“Prepared categories have overperformed their wholehead counterparts, with prepared vegetables a particular highlight experiencing 10% growth,” notes Amir Jalaly, Kantar Worldpanel’s business development director.
Penetration up 2.2% to 84.9%
Frequency up 8.8% to 17.3 trips
Volume per trip up 1.2% to 0.5kg
Prepared vegetables a clear winner
Despite the price premium, prepared veg has therefore stolen £16 million-worth of spend directly from wholehead in the last year.
As first highlighted in a presentation provided by Kantar to Produce Business UK readers in February, consumers are prepared to pay more for prepared vegetables to save time, especially potatoes (Slide 3). But not only that, they are also happy to pay more for a more premium, added value veg.
“Shoppers are buying prepared potatoes and premium vegetables a lot more often than last year, and frequency is the main driver behind both sectors,” explains Jalaly.
“There has been big in-store growth of premium veg that you don’t even need to take out of the packet to cook. For example, microwave-in-the-bag Tenderstem broccoli, butternut squash and asparagus, all of which are flying off the shelves.”
Where does it leave wholehead?
Despite all the positive results for prepared produce, looking at Slide 5 it’s clear the UK produce shopper is still engaged with both wholehead and prepared produce.
“Very few people ONLY buy prepared produce (0.1%), compared with 18.9% of people who ONLY buy wholehead. But 81.1% of people buy across both markets,” says Jalaly.
However, in spite of its apparent appeal, wholehead has lost nearly £300m in market value directly through price cuts. Volume is fairly stable, but Jalaly says it’s only the much cheaper prices that are keeping it at this level.
“There is no sign of a resurgence for wholehead, but obviously we are moving into the Christmas season, and it will be interesting to see if shoppers opt for more traditional produce or go for the prepared options,” notes Jalaly.
“Each year manufacturers are looking at seasonal new product development and more often than not these days it’s of a prepared format.
“It will be key for retailers to look to engage shoppers with event-based marketing – as Tesco did so effectively last year with its ‘Festive Five’ offer – and I’m sure we will see all the retailers taking their produce offerings more seriously.”
View the full presentation by Kantar Worldpanel here.