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Fruit and Vegetables: trends and markets
Dependant on several factors such as the economic situation, bad weather and consumer eating habits, the fruit and vegetables sector has to be reactive and innovative to adapt to these situations and maintain growth.
France is the 3rd largest European producer of fruit and vegetables (excluding potatoes), behind Italy and Spain, with 6 million tons of vegetables and over 3.6 million tons of fruit in 2007. The total cultivated surface represents about 2% of arable land and 87,000 farms, for a turnover of €5.8 billion (9% of the agricultural sector). For several years now we have seen a general downturn in production due to various phenomena, such as a decrease in cultivated areas, competition, bad weather, etc.
Fruit production
For apple production (1.68 million tons in 2007), orchards lost 80,000 hectares between 2002 and 2007, following many clearing operations (including 44,530 hectares in 2007).
Golden remains the leading varietal type cultivated in France (30% of orchards), followed by the Gala group (16% of total surface) and Granny (8% of orchards).
As for pear production (198,000 tons in 2007), all the main varieties have dropped. Williams and Guyot represent more than half the pear orchards. Conference and Comice remain steady. Louise Bonne, Beurré Hardy and Alexandrine have fallen significantly. The Passe – Crassane’s decline continues inexorably. Angélys, a new winter variety designed to replace it, represents 200 hectares (2007). Orchards are continuing to age, with over half composed of 25 year old trees.
Like the pear, peach orchards saw a further decrease in 2007 (39,000 tons). Roughly 25% of orchards have disappeared in the last five years. The reduction in areas is more significant for peaches, more noticeably for the yellow peach (-35 %) than the nectarine (-15%). Among white peaches, the Onyx variety is the most planted (the areas have tripled in five years).
For plums, we note a significant decrease in orchards (5% in five years) primarily affecting Reine-Claude and Président (-15%). However, the surface devoted to Mirabelle and quetsch continue to rise (+17% and +6%). However, there is relative ageing on the orchards, with the proportion of trees under fifteen years old only representing 36% of the total for the species.
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A drop in productivity
Apricot orchards fell by a thousand hectares (7% of surface) but its replacement is continuing at a steady pace (20% of the orchards are under five years old). It is continuing to diversify with the regular spread of new varieties.
Cherry orchards in turn have lost over 2,000 hectares since 2002 (17% of surface). The varietal composition is slowly changing, with the share of the two main varieties (Burlat and Napoleon) continuing to drop off (under 30% of areas). On the other hand, of the more recent varieties some (Summit, Duroni) remain steady, some are growing (Rainier, Sweet Heart), or even tripling (Regina) their surface.
Walnuts have experienced the strongest growth (+7% in five years). With over 20,000 hectares, walnut is the only crop to have increased its surface, taking second place after apples, but ahead of plum and peach orchards. The Franquette variety is still the benchmark (78% of planted areas).
For strawberries, the surfaces continue to drop, whereas off-ground strawberries are increasing and still account for important volumes. Yet this increase does not offset the inexorable drop in volumes (77,000 tons in 1996 against 49,300 in 2006). This decrease benefits the competition from Spain (beginning of campaign) and the Nordic countries (Germany, Belgium, Holland) at the end of spring, summer and autumn.
French melon (about 300,000 tons, 3rd largest EU producer) is based on the Charentais variety above all. France is not self-sufficient and imports 90,000 tons/year from Spain, Morocco and Israel.
Table grapes (61,000 tons in 2006) are also insufficient. The imports are high at 124,147 tons (+7%) in 2006
The kiwi remains stable, with the Hayward variety retaining the monopoly (96% of surfaces).
Vegetable production
By comparison with 1996 figures, the number of vegetable producers has decreased by 40% and cultivated surfaces by 6%. For the last ten years, we note a significant fall in low tunnel surfaces (-33%) whereas high tunnel surfaces are on the rise (+13%). Among these, the off-ground surfaces have expanded by 80% and now cover almost 1,500 hectares gross (or one in five hectares of greenhouses and tunnels). A rising percentage of vegetable surfaces are to be found on increasingly large farms and just over 3,200 producers own over 50% of the surfaces, representing 40 hectares per farm. The entities produce essentially for the food processing industry (string beans, petit pois, sweet corn) but also species (carrot, onion, melon) for the fresh produce market. Then there are the market garden farms grown on specialized plots with successive rotations (20% of farms and 12% of gross surfaces).
While outdoor market garden production is still the majority, there are 1,700 specialist greenhouse gardeners with an average vegetable surface of 1.7 hectares, and a weight that has doubled in ten years. The same is true for those who combine greenhouse and outdoor crops. The vegetable production for industry covers about 45% of total surface area against 35% in 1996. However, production of vegetables for the fresh produce market has dropped by 20% to 40% in ten years depending on the species.
Contrasting volumes
Potato production amounted to 4,730,000 tons in 2007 (+7% compared to 2006) and exports increased by 12.5%.
For tomatoes (615,300 tons in 2007 including 41% vine tomato), greenhouse production represents 93% of total output. While the production remains quite stable, the production surfaces have decreased slightly (-6%) but this was largely offset by off-ground cultivation.
French endives underwent a 3% decrease in surface (12,500 hectares). The production of roots remained stable (377,000 tons) and chicory production (223,000 tons) rose slightly (+1%).
Cauliflower also had a 5% decrease in surface (22,700 hectares), and in production (-3%) to 356,700 tons, despite steady demand.
Carrots increased in surface (+6%) with 9,300 hectares with a rise in production (+7%) to 360,000 tons. Prices remained at the right levels and the market is still looking good.
The total lettuce production remained stable with 500 million heads (lettuce, batavia, oakleaf, endive). Packaged lettuce (4th range) increased slightly, particularly lamb’s lettuce.
Leek production (176,850 tons) has fallen considerably since 2004, for an estimated surface of 6,000 hectares. France is the leading European producer but nonetheless registered high imports (32,000 tons). While the early leek market fell by 10%, winter leeks are expected to increase by 6%.
Import-export and distribution
Exports of fresh fruit and vegetables amounted to €1.64 billion for 2007, with a clear increase on 2006 figures (€1.63 billion). Despite a minor decrease in vegetable volumes (676,000 tons, -0.63%), the turnover came to €654 million.
Sales of cauliflower remain consistent (127,000 tons) and exports of tomatoes continue to grow (111,500 tons, +30%). Lettuce dropped slightly in terms of volumes (-400 tons). For fresh fruit, the situation is deteriorating with export volumes down by 11%. Apples rose in value (+6%) but fell in volume (-12% to 640,000 tons). Table grapes experienced a slight fall in export volumes (-500 tons).
Imports of fresh vegetables (excluding potatoes) totalled 1.6 million tons in 2007 (tomato, cucumber, sweet pepper, courgette, onion, eggplant, melon, asparagus, etc.) and 916,800 tons for temperate fresh fruit (strawberry, plum, red fruit, peach, cherry, apricot, apple, grape, nectarine, etc.). For exotic fruit, citrus fruit totalled 979,000 tons and bananas and other exotic fruit accounted for 748,500 tons.
A segmented market
A segmented market
Large and medium-sized supermarkets account for 59% of fruit and vegetable sales. Traditional markets in turn provide for 17%, hard-discount 12%, greengrocers 8.6%, other channels (direct sale) 3.4%.
The retail trade specialized in fruit and vegetables follows strategic choices to form six specialist categories (hypermarket, specialist discounter, all-round specialist, qualitative specialist, traditional specialist, contracted self-service specialists) depending on the selling method, size of range, services proposed or even the catchment area.
In fruit and vegetable distribution, we find several types of short or long circuits, such as:
- short producer-seller circuits (7% supplies to French consumers and 10% of production),
- long producer-shipper circuits (77% to wholesalers and central purchasing agencies, 23% to export and import),
- the import-re-export circuit (60% arrivals from EU and 40% other countries),
- the wholesale circuit (54% of French shipping and 46% introduction-import, 55% of sales from operators on the market, 34% off-market operators, 11% for non specialized wholesalers).
- e-commerce in foods (constantly growing, it should represent 5% of domestic food trade in 2010 with one third for fruit and vegetables).
Consumption of fruits and vegetables
French household expenditure on fresh fruit and vegetables (excluding potatoes) represents 10.9% of the household’s total food expenditure (source Insee). French consumption of fresh fruit and vegetables (except potatoes) is estimated at roughly 151 kg (2007) per annum, per household. Fruit is responsible for driving the overall market rise. The quantities purchased per buy continue to rise, as does the purchasing frequency. In 2007, the quantities purchased by householders far exceeded the average recorded since 2002. As regards vegetables, consumption recovered in 2007 yet failed to reach the average level of five years ago.
The fruit purchased in greater quantities include strawberries (+13%), oranges (+12%), grapes (+12%), citrus fruit (+11%), apples (+4%). The fruit that lost ground include cherries (-26%), apricots (-11%), pineapple (-10%), peaches and nectarines (-9%) and limes (-2%).
The vegetables purchased in greater quantities include onions (+18%), artichokes (+14 %), sweet peppers (+13%), courgettes (+12%), tomatoes (+7%) and carrots (+6%). Those that fell include watermelon (-10%), pumpkin (-8%), lettuce (-5%), lamb’s lettuce (-3%), leeks (-3%) and melon (-2%).
Consumer's choice
For the majority of consumers, the quality of fruit and vegetables is tied to their freshness (the first choice criterion before price) and respect of seasons. Fruit and vegetables of French origin have an excellent image even though they are sometimes considered more expensive, by reason of higher quality and stricter regulations (France practises the highest number of controls). The 4th range fruit and vegetables (ready to eat) are experiencing an average annual growth of 9% and about 70% of households consume them. Lettuce represents 85% of the segment, representing 1 in 5 lettuces consumed in France.
The volumes sold amount to 74,000 tons in supermarkets and 38,000 tons in the restaurant and catering trade. While fresh fruit and vegetables are still the leaders in terms of penetration and average purchasing budget, there is competition from 4th range and frozen products, as well as ready-made products at the fresh foods counter. The 4th range fruit and vegetables are mostly purchased by the collective catering sector, with commercial catering absorbing 60% of whole fresh vegetable purchases.
Innovation and development
Innovation takes many forms, such as varietal diversity (tastes, shapes, colours) and technological diversity (packaging, appliances). Innovation is necessary to develop the competitiveness of the companies in the sector and to promote consumption of fruit and vegetables (fresh and converted). As consumers increasingly reject the industrial model, innovation helps highlight values tied to the environment, sustainable development, not to mention the practical aspect.
For instance, tomatoes have benefited from varietal innovations allowing its segmentation, generating higher consumption. In addition, varieties that have disappeared or are losing ground have been put back on the market in another form (baby vegetables) with an increase in consumption as a result.
Similarly, new techniques to improve the quality of fruit and vegetables have come to light (controlled atmosphere, gustatory quality control, packaging, atomization and fogging, planting and harvesting equipment, treatments, reasoned and integrated production, transport, etc.).
In this respect, the Fruit Logistica trade show in Berlin (4 to 6 February 2009) has become a key event worldwide for products and services in the fruit and vegetables sector.
Francis Duriez
Source : Ctifl, Agreste, ministère de l’Agriculture, Scees, Douanes, Inra, Interfel/Aprifel, Insee
Crédit photos : Francis Duriez ;Crédoc ; Aprifel ;
Pro reviews
Pierrot Da Costa
(Fruit retailer - Paris)
"The fruit and vegetables market is not very dynamic and clients are harder to find, due to the drop in purchasing power. This represents a 10% decrease in volume and money. Furthermore, off-season fruit and vegetables are selling less. The France origin is more in demand, along with organic produce. In our shops in Montmartre and at Porte d'Auteuil, we sell fruit and vegetables from reasoned agriculture.
At the same time, consumers prefer ready-made produce (4th range) because they don't have the time to prepare meals, such as lettuces, prepared pineapple, fruit salads, etc. We also sell our homemade soups, which do well for that reason. While fruit is slightly less expensive than last year, we notice a purchasing shift to less upmarket produce, even among the more well-off populations. However, this doesn't mean that clients want lower quality produce. We have to learn to sell the right quality at the right price. We observe an attempt to innovate with the arrival of new varieties in many fruit and vegetables."
Frédéric Descrozaille
(Director General of Interfel)
“In 2007, we observed a slight slowdown in the decrease of agricultural land devoted to fruit and vegetables. On the yield side, we also saw a decrease, except for a few products like apples or French endives. Finally, 2007 was also a year of less value, which fell by 6.3%.
It is hard to predict the trend, particularly at the start of 2009. The cancellation of standards, the European directive 414 banning phytosanitary products and the application of the law to modernize the economy and its impact on distribution channels will have some very serious consequences. We have to try and protect the conditions under which production professions work, and give them the means to adjust to these changes. However, this won’t be easy.
We note a slight upturn in the consumption of fruit and vegetables after two years of falling, essentially due to a rise in purchasing frequency. The household penetration rate remains high; these products continue to hold the same attraction for households.
Elsewhere, consumption appears to be moving towards early fruit and vegetables, and the restaurant and catering trade recorded an increase in purchases of fresh fruit and vegetables, primarily due to commercial catering.
The future will depend on supply’s ability to adapt, by meeting the characteristics and changes in demand.
There is no doubt that the PNNS message got through and many French people have accepted the idea that their diet has a significant impact on their health. Nonetheless, this is a Latin country and our relation to food is not utilitarian; we don’t sit down to eat because we have to feed ourselves.
There is certainly high growth potential in terms of consumption. Yet to take advantage of this, the market players will have to invest in sales and marketing by offering produce for pleasure, accompanied by services and advice.
We know that the French are cooking less and less, yet they remain attached to the idea of cooking a ‘home’ meal on the weekend. So the Fruit and Vegetables sector has to encompass two trends: the ‘convenience’ trend, instant meal platters in the week, and the traditional weekend cuisine.
This presupposes investment in snack, fun or practical packaging plus investment in information and consumer markers for better preservation methods and cooking tips.
Fruit Logistica is a key venue for exchanges, because this international trade show brings together all the fruit and vegetable trade professionals from nearly 70 countries. It corresponds perfectly to our challenges and concerns, which are to open up new markets and promote exports of fruit and vegetables grown in France. Interfel’s presence is therefore essential and for the second year the trade association has joined forces with FLD and CNIPT to organize the French fruit, vegetable and potato exporters’ Trophies during this trade show. The purpose of these trophies is to promote and reward the initiatives taken by French companies in the export sector.”
Christian Hutin
(Head of the Products and Markets department of CTIFL)
"There has been a fall in fruit and vegetable production for several years now, particularly on major products (apple), due to the decrease in surfaces, the competition between production companies and their difficult positioning with regard to the competition. In this respect, the production from the South of France suffers from competition from Morocco, Spain and the emergence of Egypt (early fruit and vegetable production). On the other hand, French apricots remain the European leader because the varietal renovation was properly managed. Similarly, walnuts are the only orchards developing in France.
While there is some question as to how low our overall production potential may fall, we can see that some sectors are resisting well or even growing, like strawberries or tomatoes, thanks to the efforts made in terms of better segmentation, varietal improvements, communication, production yields and reorganizing companies.
For thirty years, distribution has witnessed the growth of mass distribution, which has adapted to changes in consumer lifestyle, to the detriment of wholesale and retail channels. Today, this growth is more marginal.
Local retailers are back in fashion, but need to change the way they function through commercial innovations.
Generally speaking, consumption is stable at best according to our figures. It remains steady in terms of value but has decreased slightly in volume. In the face of competition from converted produce, fresh produce has to play the quality and segmentation card for all it's worth.
The fruit and vegetables sector still needs to make efforts in terms of technological and varietal innovation to keep up with the competition and satisfy consumers, with the best value-for-money ratios. As regards the Fruit Logistica trade show, it has become the benchmark in the fruit and vegetables sector and CTIFL will be there."
Jacques Lechat
(Fruit producer – Loire-Atlantique)
“With my brother Jean-Louis, we are the 3rd generation of apple and pear producers on a farm of twelve hectares, covering about thirty traditional and niche varieties, with another fifty or so under trial. We are positioned in the top-of-the-range with one underlying principle, to restore excellence to fruit. On our farm, production control is tied to a rigorous, wide-scale selection of the fruit produced. For instance, on a Golden apple tree with 2,700 flowers, we only pick 24 fruit, which are marketed on an upmarket channel. We sell one third of our production through a Rungis operator positioned in upmarket produce. We have always adjusted our production to sales by drastic selection and by maintaining our prices. At our level, we constantly make efforts to improve the fruit as a whole (taste, shape, resistance), on traceability, the environment, etc.
The economic pressure on the fruit market comes from the supermarkets and a good percentage of the production has its hands tied with the constraints of low prices, hence lower quality production. This pressure is causing the disappearance of small producers and their quality produce. The same problem arises with distributors, who operate under their own brands. All of this ends up standardizing production, which is bad for consumption.
As regards varietal innovation, it is useful if driven by demand. However, it often represents a high cost, which puts a brake on consumption.”
Didier Ioli
(Managing Director of Paris Select - fruit and vegetables sector at Rungis))
“We are seeing a decrease in cultivated surfaces because of a failure to replace varieties and fewer producers because there is a lack of successors and applicants with a vocation for these tough professions. This will make producers group together, which will ultimately result in rather standardized produce, which will in turn cause clients to lose interest in these products without taste or originality.
Consumption mirrors the mistakes made. Production is still too dependent on mass distribution, with increasingly difficult markets. We are now marketing varieties selected for their yield, with no gustatory quality, fruit picked too early and products with the lowest price. Consumption is falling because of this bad quality. It has dropped by about 6% in the last five years.
There is a huge job to be done at the production level to obtain fruit and vegetables that taste better. Fruit and vegetables are fresh, natural, fragile products that need to be preserved to retain their best features. This is true for wholesalers, retailers and even consumers. Yet quality has a real value that has been ignored for a long time. Throughout its lifecycle, the fruit or vegetable generates actual or related costs (production, packaging, sizing, traceability, warehousing, distribution, etc.) and its price has to be set accordingly. As for varietal innovation, it helps develop the market because diversity creates demand. In this respect, the wholesale market is essential and remains the only one to make the link between upstream and downstream because it controls the selection, seasonal nature, origin, distribution and price of products. The Fruit Logistica trade show has become essential to the fruit and vegetable sector.”
Georges-Pierre Malpel
(Manager of Viniflhor)
“From a financial viewpoint, 2008 will be difficult for French fruit and vegetable production. For fruit farms, highly sensitive to bad weather, the campaign has been marked by a low yield for peach and apricot orchards, not offset by the rise in prices. Pear production also fell by over 20%. With the rising price of fertilizers and products to protect crops, revenue for 2008 is expected to fall by 26%.
For vegetable farms, greenhouse productions are less dependent on weather but more exposed to higher energy prices. As demand is still weather-related, the cool weather in the summer of 2008 slowed sales, leading to a drop in prices. Despite a more favourable situation for winter vegetables, there should be a 16% fall in producers’ earnings. The equilibrium in fruit and vegetable markets is often delicate and a slight excess in supplies, through imports, or a momentary shortage can result in sharp adjustments in prices. Fruit and vegetable production is in a slow, but steady decline structurally.
I can see two clear tendencies in its development. The first appears to be the move towards ‘sustainable’ production: renewable energies and savings on greenhouses, steadily reducing input, etc. The other tendency is growing segmentation and marketing: creating varieties and packaging to offer produce that adapts to consumption occasions and is more practical for consumers. All of which occurs in a context of heavy competition on prices, in a very open European market.
This forces producers to adapt in terms of cost controls and technical competence. They are adapting to their clients, to changes in modes of consumption and distribution. They are adapting to the new environmental and regulatory rules. As regards food consumption trends, everyone knows that households are spending less and less time cooking meals. They prefer products that keep them healthy but also provide a service. In this context, fresh fruit and vegetables benefit from a good image because they are widely seen as good for your health. Yet they are handicapped by the raw produce aspect, which means the consumer has to know how to select, preserve and cook them.
In a widespread atmosphere of hyperawareness of prices, price fluctuations are perceived as a sign of expensiveness. So the sector’s challenge is to reconcile fresh produce with service.”
Bernard Piton
(President of UNCGFL)
“Rising pressures in the last few months are causing growing concern among our consumers, which has serious consequences on their behaviour. Higher energy prices, perception of less purchasing power and fears about the future necessarily result in arbitration. However, we have some assets on our side.
The first asset of the food industry is that our clients have to eat every day.
The second asset is that local suppliers may be better positioned in the long term than those requiring frequent trips to the petrol station.
The third asset is that this may give local retailers the opportunity to go back to giving their regular customers good advice on how to buy smarter.
Crises are always presented to us as threatening times. Yet they are also opportunities for those who know how to adapt their offers to trends. This is the role of retailers. Our trend tomorrow is to promote an innovative offer and smart buying. Smart buying is not just about the lowest price; it is about accessible, reassuring products (in a worrying environment), products that attract (price is less important), products where there is a relationship (in a society of false appearances). We should see new product offers at Fruit Logistica; yet beyond that, I think that the service chain will also be bringing consumers lots of novelties.”
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