The European Commission is to provide €10 million to promote sales of fruit, vegetables, dairy products and other agricultural products from the EU, and to help support the farmers and food producers most affected by the coronavirus crisis (Fruchthandel, 2 July). €5 million is earmarked for sales promotion measures carried out jointly by producer organisations from several EU countries, the other half for national measures, as reported by aiz.info. This is the first time the Commission has used sales promotion as an instrument to respond to a serious market disruption.
The French are returning to organic and local food (Fresh Plaza, 9 July). While the coronavirus crisis continues to bring many problems, some behaviours have been positively changed, particularly with regard to diet. A study by the Nielsen Institute reveals a 63% increase in organic products, whereas conventional products continued to grow by 14 to 20 points maximum in mid-March. These food choices were largely supported by families: “families normally consume more organic products than the rest of the population. Also, in times of confinement, without school canteens, they cook more at home and boost sales”, explains Antoine Lecoq, analytical consultant at Nielsen. When the markets closed on 23 March, merchants organised themselves by setting up platforms to find the closest producers to each household. The National Federation of Organic Agriculture (FNAB) and the Confédération paysanne listed them on a site to help consumers. With containment, many producers have also taken the step of selling online.
Fresh vegetables grew in volume by 10% in June 2020 compared to the same month in the previous year (fruchthandel, 28 July). According to market research institute GfK, there was an overall volume increase of 14% in the first half of 2020 compared to the first half of 2019. In combination with a price increase of 8%, vegetables thus achieved sales growth of 22%. In a monthly comparison between June 2020 and June 2019, cabbage vegetables (+14%), root vegetables (+21%) and onion vegetables (+24%, with falling price levels) show strong volume increases. The volume growth of fresh potatoes picked up again in June (+20%), while the average prices fell significantly (-16%). In contrast, fresh fruit in June 2020 showed a slight decrease in volume of 3% compared to the same month in the previous year. As a result of the significantly higher price level, there is still a dynamic increase in sales (+16%).
Researchers from the University of Cologne have found that online food retailers only benefit temporarily from corona measures (Fruchthandel, 27 July).The research examined the effects of COVID-19 on German online food retailing between 10 March and 15 May, and found that the “stay home” measures during this period represented a window of opportunity for the entire online trade. However, the study results showed only a slight transition from stationary food retailing to online grocery retailing. “The reason why the online food trade could not benefit more is due to the limited capacities of the companies that could not react so suddenly to the increased demand, but also to the existing consumption patterns of consumers,” explains Professor Dr Martina Fuchs. Although companies tried to cope with the increased demand, they rarely expanded their delivery area and continued to deliver mainly in cities. In addition, the unpredictability of the further development of COVID-19 inhibited expansion as the risk for large investments was difficult to predict.
The Belgian organic market grew by 4% year-on-year to €779 million, with the share of organic food also increasing (Fruchthandel, 2 July). According to GfK Belgium, Wallonia (including Brussels) with €474 million is ahead of the Flemish with €305 million. This is mainly because there are more organic farms, areas and businesses in Wallonia. But Flanders is growing strongly, and consumer spending has doubled in the past 10 years. Organic vegetables are at the forefront of purchases, with an annual average of €6.10 being spent on them. With this significant growth in the organic sector, Flanders is fully in line with the European Union’s Farm to Fork strategy. By 2030, 25% of agricultural land in the EU is to be managed organically. VLAM, Flanders’ Agricultural Marketing Board, has recently launched its organic campaign, “Kies eens wat vaker bio” (choose organic more often) and a new online platform, www.allesoverbio.be, with information on the Belgian organic market.
Fruit and vegetable consumption in Spain stabilised in 2019, and in 2020 increased due to COVID-19 (Fruchthandel, 3 July). The consumption of fresh fruit and vegetables in households reached a volume of 7.741 million kg in 2019, an increase of 0.7% compared to 2018. According to a report by the Spanish Ministry of Agriculture, this shows a stabilisation compared to the two previous years. In 2020, however, consumption rose due to the corona pandemic. In the first quarter of 2020, consumption reached 1.960 million kg (+6.6%) and expenditure amounted to 3.257 billion euros (+12%). The increase in March, the first month of the pandemic, is striking, with growth of 13% to 731.2 million kg. Vegetables accounted for 257.5 million kg (+13%), potatoes 104.6 million kg (+36%) and fruit 369 million kg (+8%). Fruit consumption by Spanish households in 2019 accounted for 4.193 million kg (+1%), worth €6.472 billion (+1%). While sales of bananas, apples, mandarins, strawberries, sugar and watermelons have increased, sales of oranges decreased, along with pears and stone fruit. The industry association Fepex has recorded growth (+7%) since February, which has increased further due to the months of the curfew.
The pandemic has highlighted the vulnerability many companies face in their supply chains – for wholesale businesses dealing in fruit and vegetables, the past few months have seen major changes in terms of both demand and supply. An article by Sandander (7 July) describes steps wholesalers are taking to improve their supply chain resilience and diversification, and how South Africa can play an important role, which could become even more vital after the UK’s Brexit transition period comes to a close at the end of this year. The UK has agreed that the current trade deal between the South African Customs Union (SACU) and the EU should be rolled over once Brexit is complete. This will result in the creation of a free-trade area covering 90% of bilateral trade between the two nations.