Dollar bananas down, ACP and EC production up

Fruitrop (20 May) reports that the EU28 market consumed 6.5 million tonnes of bananas in 2019, down 0.7% from 2018. The dollar group saw a distinct downturn, while the ACP origins and EC production registered a good year. But in terms of market share, the vast majority of the supply remained with the dollar banana, with 73.6% (–1.5 points), as opposed to 16.8% (+1 point) for the ACPs and 9.6 % (+0.5 points ) for European production. In terms of consumption per capita, there was a drop for the first time since 2012 to an average of 12.7 kg per year, down by 115 g. But this is a small change compared with the difference between, for example, a consumer from Romania or Bulgaria (5–7 kg/year) and one from UK or Sweden (17–18 kg/year).

European consumer trends

The European Consumer Organisation (Bureau Européen des Unions de Consommateurs, BEUC) has conducted a survey of 11,000 people in 11 European countries, including Austria, Belgium, Germany, Italy, Spain and the Netherlands (Fruchthandel Online, 8 June). Consumers are aware of the impact of food systems on the environment, but often underestimate the impacts of their eating habits. The results show that two-thirds of consumers are willing to change their diet while taking into account environmental aspects: reducing food waste, and eating seasonal fruit and vegetables. Alternatives to meat are traditional vegetarian dishes and plant-based substitutes, but consumers are not yet ready to consume insects and meat from cell cultures. A majority of respondents (57%) are in favour of mandatory information on packaging regarding sustainability, but 75% reject any tax on less sustainable products. Ms Govens, Director General of BEUC, says that “the biggest obstacle to more sustainable eating habits in almost all countries is price. Consumers need to be shown that choosing more sustainable food does not necessarily have to cost more.”

Germany

According to the Federal Agency for Agriculture and Food (Bundesanstalt für Landwirtschaft und Ernährung, BLE), consumers had to pay 11% more for fruit in April 2020 than in April 2019 (Fruchthandel Online, 19 June). The reasons are many, and common to many European countries: limitations on food imports and production due to seasonal labour shortages caused by quarantine measures and restrictions on the movement of goods in Europe. According to BLE, these price fluctuations are not unusual due to uneven yields between products (e.g. carrots ten times higher than asparagus; apples five times higher than cherries), and production being subject to the vagaries of the weather.

United Kingdom

During the pandemic, farm shops have reported an unprecedented increase in the number of new customers (FPC Fresh Talk Daily, 11 June). A survey reveals that 79% of these producer-retailers have implemented a “click-and-collect” service in the form of totally contactless drive-throughs; and 67% have implemented home deliveries. As a result, farm shops have processed more than 1.4 million orders for home delivery or collection since the start of the containment measures. They have also had an impact on employment, as 73% of producer-retailers have either hired additional staff, or laid off fewer employees than expected, as a result of these new services. According to Farm Retailers Association President Rob Copley, “Farm stores have been able to respond flexibly to customer requests because of their size, independence and direct relationships with local farmers. In addition, they were in solidarity with local communities by preparing and delivering ready-made meals to local organizations that support the most vulnerable.”

In the UK, market halls and street markets were allowed to reopen on 15 June, but the consequences of the containment measures forcing their closure are not yet known (FPC Fresh Talk Daily, 15 June). Studies show that during the period of closure only one-third of markets remained even partially open, and that only 50% of traders were able to benefit from government assistance to businesses. About 40% of traders feared during the pandemic that they would not be able to open again. There are 1,173 markets in Great Britain, including traditional and specialised markets. Before the crisis, there were 32,400 market traders and 9,000 event traders employing 24,000 people.

UK supermarket chain Morrisons has confirmed that it will make immediate payments to its smaller suppliers for a further three months to help them through the coronavirus crisis (FPC Fresh Talk Daily, 9 June). The supermarket implemented the faster payment scheme in March to help small foodmakers and farmers with their cashflow. It ran until the end of May and has now been extended to September. The scheme applies to firms that have up to 1 million pounds of turnover with Morrisons. Around 3,000 small suppliers, including 1,750 farmers, will benefit from the extended arrangements.

France

L’Agence Bio commissioned a study by Etude Spirit Insight from 20 to 25 May 2020 on the consumption behaviour of organic products during confinement (Végétable, 15 June). Nearly 7 out of 10 French people have bought organic products during confinement: 8% are new buyers and 61% were already consuming them before. The increase is more pronounced among the lowest socio-professional categories, and young people aged 18–24 years are more likely to estimate having bought more over the period. Hypermarkets were the preferred places to buy organic products (57% of buyers). However, the survey shows an increase in direct sales (22% of buyers): sales on farms, local platforms and/or Amap. In rural areas, direct sales have met with success, with 37% of inhabitants favouring short trips. Local shops (24% of buyers) and specialist shops (26%) were favoured. The sale of organic products in supermarket drives has increased (17% of buyers), and ordering on the internet (excluding supermarket drives) was an alternative for 7% of respondents. Awareness was raised among 50–64 year olds, as 54% of them bought organic products to support French organic producers. The same was true for people living in rural areas (55%). Among these new buyers, 9 out of 10 intend to continue to favour organic products for the following reasons: better for health (59%); better quality (57%); better respect for the environment (56%).

Market shares for 20 April to 17 May show that hypermarkets such as E.Leclerc, and especially Carrefour, are experiencing some difficulties, while supermarkets such as Intermarché and Système U have once again posted spectacular results (Fresh Plaza, 9 June). According to data from the Kantar Institute, the two players that have managed to come out on top are Les Mousquetaires (Intermarché) and Groupe U (Système U). Group E. Leclerc nevertheless remains at the top of the market share ranking in mass distribution (21.3%), while its results are down for the second time in a row (–0.6%), representing a loss of 1.2 million customers. Intermarché gained market share (+1.2%) and consolidated its second place (15.7% market share). This trend can be explained by the change in consumption patterns during the crisis, when people went shopping in the stores closest to where they live. In addition, 2 million more households have been shopping via drives in recent weeks (9.6% of sales in total), which means that Intermarché has logically gained a share.

An interview with Capexo, which imports and markets exotic fruits and vegetables in France, discusses the impact of COVID-19 on the consumption of exotics in France (Fresh Plaza, 10 June). They report that despite higher prices, demand for exotics has remained steady in March, April and throughout May. Now prices are starting to fall, which is normal with the arrival of summer and the success of local seasonal fruits. “We have had to stop very small exotic products, such as combava and carambola, because of containment measures specific to each country.” For others, such as mango, passion fruit or lime, consumption is becoming classic again, with a loss of momentum as the summer season approaches. Except for avocado, which enjoys a strong market in the summer.

Italy

An analysis by Coldiretti on Istat data on inflation in May 2020 shows an average price increase of 2.5% for food in Italy. In contrast to the general trend, which sees the country in deflation (–0.2%), consumers have had to pay more for fruit, sausages, milk and pasta (Fruchthandel, 17 June). Fruit prices rose by 7.9%, and prices for vegetables rose by 5.3%. Due to the closure of restaurants, and in many regions also the local markets, supply in the food retail trade multiplied, and with it fierce competition among suppliers. The choice for consumers increased noticeably, but demand also increased significantly, especially for long-life products such as apples, citrus fruits or kiwis. This has caused prices in the retail trade to rise. At the same time, however, tough competition among suppliers led to a situation that resulted in lower prices and compensation payments for producers. The prices awarded to producers in many sectors no longer even cover costs and endanger the national agricultural and food system.

Consumption increased during the coronavirus, especially of fruit and vegetables with a high vitamin content such as citrus fruits and vegetables in general, but not of tropical products imported from overseas (Fresh Plaza, 18 June). Italfrutta Distribuzioni, a company specialising in exotic products based in Milan’s fruit and vegetable market, found that the coronavirus has made the sales of tropical products more difficult because of advertising campaigns such as “we buy Italian and help our companies to get out of the crisis”. Pineapple sales have slowed down sharply due to the coronavirus lockdown, and household consumption could not make up for the drop in sales.

Growers could reap benefits from predictive AI

Artificial intelligence that can predict a crops shipment window three times earlier than previously possible has been developed by Agrimetrics, one of four Agritech centres backed by the UK Government (FPC Fresh Talk Daily, 19 June). The first proof-of-concept promises to save one leading farming business an estimated £6 million per year, equivalent to 15% increase in gross profit.

Overseas crops are grown to a specified shipment window, providing retailers with a constant supply of fresh produce; if windows are missed, growers are generally responsible for making up the shortfall. Purchasing produce from a third-party supplier or air freight are the most common ways to do this, but both are expensive. Costs for one of the UK’s leading food and farming business run to £120,000 per week – just for sweetcorn. These costs can be reduced substantially if a grower knows in good time that a shipment will be missed. The more time the grower has to source and negotiate alternatives, the lower the cost will be.

Belgium

According to the farmers’ association (Boerenbond), fruit and vegetables have resisted the crisis relatively well (Fruchthandel Online, 22 June). Belgian vegetable producers recorded a loss of sales of 24.4% in April and 14.7% in May. For almost half of vegetable companies, turnover has already returned to pre-crisis levels. In the fruit sector, a sales loss of 11.8% was recorded in April, which was almost entirely offset in May (–0.9%). The consequences of the crisis were cushioned by the development of alternative sales channels and the securing of sufficient seasonal labour to avoid major effects on prices.

United Kingdom

Around 80,000 workers will be needed to ensure the fruit and vegetable harvest is on time this summer in the UK (FPC Fresh Talk Daily, 12 June). The 14-day compulsory containment measure will not apply to foreign workers who have complied with the conditions of entry: to provide an itinerary, the address of the workplace, proof of an employment contract, and to stay 14 days on the same farm.

Germany

In Germany, restrictions have also been eased for seasonal agricultural workers from the EU and Schengen-associated states, who have been allowed to enter since 16 June while complying with strict health rules (Fruchthandel Online, 18 June). Between the beginning of April and 15 June, around 48,000 entries were reported via the internet portal “Seasonal Work 2020” of the German Farmers’ Federation (Deutschen Bauernverbandes, DBV). In fact, 40,318 people entered Germany by air. From 16 June until 31 December 2020, seasonal workers will no longer be obliged to register in advance, subject to new provisions due to the changing pandemic situation.