A recent study, “Supermarket of the Future 2020”, carried out by Responsive Acoustics (ReAct), a company specialising in digital market management, showed that one third of supermarkets or discounters have now developed a comprehensive digital strategy (Fruchthandel, 30 June). At this point in 2019, only 14% had done so. As a result of the Covid-19 crisis, 48% of food distribution companies are already implementing individual digital projects to better cope with peaks in demand and better manage the supply chain. Digitisation is increasing in many areas of retail, such as merchandise management, in-store shopping experience/best service, and employee management, three digital areas considered important in the survey of food distribution professionals. “Skepticism has disappeared in retail, and digitisation is now perceived more positively. 86% (up from 72% in 2019) of retailers expect the whole sector to develop positively over the next three years as a result of digitisation,” explained Wilbert Hirsch, founder of ReAct.
The Covid-19 health crisis continues to impact seasonal labour supply in the fresh produce sector in the UK, where each year around 80,000 farm workers pick and pack fresh produce. Fructidor International (18 June) describes the formation of an agri-food consortium to address the labour shortage problem through the use of robotics and automation for fruit and vegetable picking. The objective is to widely disseminate the technologies that will be approved for implementation during the 2021 season. These new robotic systems are expected to be tested on farms producing apples, strawberries, blueberries, broccoli and lettuce this season. The work is being coordinated by the Manufacturing Technology Center, the University of Lincoln, the National Farmers Union (NFU) Mutual Insurance Society, the Knowledge Transfer Network and the Agri-EPI Centre, with the support of more than 100 food producers.
A report by Andersons Centre states that the Covid-19 pandemic has resulted in an increase in labour costs of up to 15% (FPC Fresh Talk Daily, 29 June). The report, funded by NFU, British Apples and Pears, British Summer Fruits and British Growers Association, says that this new increase comes on top of a 34% increase in labour costs already seen over the past five years. These costs in 2020 have increased in five main categories: availability and recruitment of workers, training, housing, transportation, and logistics and operations. The Covid-19 crisis has increased production costs for all fruit and vegetable producers. For many producers, labour is the most important cost (40–70% of total costs). NFU President Ali Capper says that “In addition to significant problems in recruiting seasonal labour, producers are seeing their productivity decrease, costs increase and market returns decline.”
Dutch seed company Rijk Zwaan has conducted a survey among its European partners (UK, Spain, Italy and Germany) on the impact of the crisis on their business and their expectations for the future (Fructidor International, 19 June). The study reveals concerns about social and economic uncertainties (employment, recession, seasonal labour shortages, falling demand) and an accelerated transition to mechanical harvesting. Concerning the sale of fruit and vegetables, the survey reports an average increase of 20–40% during the panic-buying phase (vegetables and long-life products: peppers, tomatoes, iceberg lettuce, frozen spinach). During the crisis, consumers have regained an interest in fresh and healthy products because they have been preparing more food at home, and this is expected to remain a strong trend in the long term. European retailers recorded an increase of 30–50% in online sales, and increased interest in locally grown and organic products. Online sales, home deliveries and local/organic products will need to continue to be sustained after the crisis.
In a recent study, market research organisation GfK reports an increase in the consumption of common food products in weekly markets, for organic products and in specialist shops (Fruchthandel, 29 June). The reason is said to be an increase in the number of young consumers looking for freshness, regionality and sustainability. According to GfK, the sales volume of fresh vegetables in May 2020 was 19% higher than in May 2019. For some products this growth in sales was achieved despite a rise in prices (peppers +19% in volume and +22% in price, asparagus +19% in volume and +17% in price), but for others a fall in prices was observed (onions +34% in volume and –11% in price, potatoes +17% in volume and –10% in price). For fresh fruit, the price level in May 2020 was 16% higher than in May 2019, with volume growth of 7%. This trend was observed for citrus fruit, with stable volumes but price growth (+47%). Volume growth was significant for other products such as strawberries (+37%), and the interaction of volume and price also led to growth in sales of melons (+49%), stone fruits (+37%) and pome fruits (+28%).
The results of a study carried out by the firm Segments on the evolution of purchasing behaviour during and after the health crisis are reported in Végétable (23 June). Many buyers have discovered skills, particularly in cooking raw products, that they would like to continue, although this may be less easy after deconfinement when time is more limited. Products that are easy to prepare could be a solution. Buyers have been planning their shopping to optimise time spent at the point of sale. The author of the study, Frédéric Dokkan, suggests “offering a virtual tour of the store and the products, indicating opening hours and peak hours to encourage the flow of traffic on the shelves of the food trades.” Another observation is the disappearance of promotional signs while prices were increasing. Mr Dokkan proposes “to promote superior quality products of French origin in order to make them more accessible”. The study also focuses on points of sale that will have to be redesigned to make travel easier, even though driving has been a success. Bulk and the absence of plastic are still important issues, but presentation must be rethought to make products more attractive and limit their handling. Bulk sales of fruit and vegetables have declined during the crisis due to health concerns. “The desired response would be a bulk department served with clearly identifiable brands and origins. Because there is no contradiction between brand and bulk.”
According to an article in Végétable (19 June), the demand for organic fruit and vegetables in Italy and Europe increased during the first half of 2020. According to Canova data, the sales volume of organic fruit and vegetables is up 17.6% compared to 2019. Canova, part of Apofruit Group, is participating in the project “Made in Nature, Discover the Principles of European Organic Farming” funded by the European Union, CSO Italy and six Italian companies (Brio, Canova, Conserve Italia, Veritas Biofrutta, RK Growers and Lagnasco Group). Ernesto Fornari, Executive Director of Canova, says “The results obtained by organic fruit and vegetables have been exceptional, for kiwis, oranges and lemons, as well as for seasonal products such as asparagus, strawberries, Ciliegino (cherry tomatoes on the vine) and Datterino (plum tomatoes), cauliflower and broccoli”. In general, the Italian fruit and vegetable sector recorded an increase in sales of more than 15.8% in mass distribution (according to data from The World after Lockdown – Nomisma and CRIF), +20.4% for fruit and +13.4% for vegetables. Organic products represent 4% of the total. E-commerce played an important role in this increase because, according to Netcomm, it recorded a 103.7% increase in orders for the fruit and vegetable sector, following the increase in fresh products (+114.8%). And, despite the closing of borders, exports increased by 6.9%.
During the health crisis, the risks involved in travelling to public places to shop for groceries have deterred millions of British shoppers, and have led to a major increase in the popularity of direct farm-to-consumer produce (FPC Fresh Talk Daily, 2 July). It appears that this trend will continue to grow as consumers become more aware of the health benefits of eating food directly from farmers, and also of the benefits to local economies. UK farms are increasingly adopting self-service options for agricultural products. Across the country, farms are using 24-hour vending machines for fruit and vegetables, milk, eggs and frozen meat, which allow customers to shop as they wish, and help reduce traffic congestion on the roads and in stores.