FreshIncite May 2016

What We’re Seeing

Snack Food Giants challenged by healthy consumer Top

unhealthy_snack_food_giants1.jpg Increasing consumer health concerns about processed drinks and snacks have led to responses from Mars, Dolmio, Coco-cola and Arnott’s. Market pressure has prompted a range of responses from these giants of the drinks and snacks sector and with mixed results.  

Mars and Dolmio are now recommending consumption of their product weekly or occasionally – a big change from ‘a mars a day’. Coca cola have committed to product integrity but moved to lower soft drink prices in response to the increased competition from water and coffee. Arnott’s have taken a different approach and changed the ingredients on “Shapes”, earning a health star rating by removing salt and saturated fat, but sparking a customer backlash.

Market pressure is calling for action and it remains a challenge to respond to potentially aspirational health concerns, while maintaining a strong food business. 

FreshIncite: It will be difficult for the snack food giants to become healthy quickly and maintain their core customers. It does seem like they will be drawn into more complicated offers and brands to cater for what appear to be quite different sets of needs.  

New varieties could take Mandarins above $200m Top

mandarins1.jpg Two new mandarin varieties have been developed by Queensland’s DAFF.  Currently the mandarin retail category value is approaching $200m in annual retail value, and the injection of these new seedless varieties at complementary seasonal supply windows, could lift the mandarin value further.

Mandarins are being seen by consumers as a healthy snack that can be eaten on the run. They have a robust citrus durability and the easy peal nature makes them a favourite for lunch boxes. They are also injecting new products into the limited winter fruit range, which could offer potential for incremental fresh fruit sales.

FreshIncite: Mandarins that expand the current season supply window have clear scope to increase category value.

Households still eating dinner together Top

household_graph_4.png Despite busy schedules and other challenges, having dinner together at home is still commonplace.

Currently, 72% of households eat most or all dinners together, according to Freshlogic’s consumer MealpulseTM results.  It is most common among households with children, whether Established Families or Budgeting Families (84-85%), and least common among High Income Singles and Couples (63%). Low Income Singles and Couples (68%) and Empty Nesters (69%) share similar results.

Eating most or all dinners together has declined from 75% four years ago, while living alone and eating alone has increased slightly from 10% to 12%. Eating alone is more common among Empty Nesters (24%) and Singles and Couples (16-18%). 

FreshIncite: Regardless of whether dinner takes place around the dinner table, in the lounge or in other settings, eating food together remains a significant part of the household routine, and this has implications for retailers and other food providers alike.

The Food Consumer

New mini roasts confirm convenience demand Top

mini_roast1.jpg The introduction of 22 new mini roast products is adding value to the mature beef and lamb retail category in the price sensitive UK market.

These mini roasts offer a convenient alternative to other meat products that require more preparation. This is not a new or ground-breaking proposition, they are simply appealing to consumers who are seeking convenience and are prepared to pay more for convenient products. 

The UK mini roast market has grown 4.1 per cent over the last 52 weeks and although it is only worth £31M, it appears that the new products have had a positive effect.

FreshIncite: Even in mature categories there is scope for growth when convenient attributes are at the centre of the offer.

Berries rise to $700m Top

strawberries_and_blueberries_3.jpg Consumer demand for berries in Australia has elevated interest in the category. The combined berry category is worth over $700m at retail and enjoys a strong consumer acknowledgement of their health attributes, as well as being a highly convenient ready to eat product. Strawberries and Blueberries lead the wider berry category in terms of volume, and they both benefit from regular inclusion in retail “multi-buy” promotional activity that can only help expand home use.   

Globally the patterns are similar, with the retail category value of berries competing with apples in UK for the #1 fruit by value. In the U.S, the Department of Agriculture confirmed consumer demand by announcing that blueberry consumption has increased fourfold from 2000 – 2012.

This local performance has now drawn interest from international suppliers with Korean strawberries poised to be imported. This additional supply is concerning some local growers due to risks of varied quality disrupting what has been a stable growth category.

FreshIncite: Berries align well with today’s consumers needs and no doubt are recognised by retailers for the value growth they can generate.  These optimum conditions have now drawn interest from suppliers outside of Australia. 

Retail

TV advertisement spending lowered by Australian retailers Top

tv_ads1.png Retailer advertising patterns reflect changes in how the major supermarkets are seeking to influence consumers. The most apparent shift is that Aldi has changed its approach to mass media and increased TV exposure, at the time same Woolworths and Coles have reduce their TV expenditure.

These changes are significant as supermarkets are constantly competing on value, it is critical for each supermarket to communicate their price message to the consumer. The major retailers invest in a range of external mass media and last year spent a sum of $198m. However, while this does reflect the reductions in mass media by some, it may well reflect a redisribution of funds toward the loyalty driven customer data bases they own and operate.   

FreshIncite: If these patterns continue,the major retail competitors will pursue quite different pathways to influence consumers. It also has the potential to create some headaches for the mass media providers. 

Markets and bazaars hold 50% market share in Poland Top

poland_market_3.jpg Polish consumers are enjoying strong competition for their food dollars from markets, bazaars and supermarkets as the country is now home to one of the highest retail densities in Europe. This has led to strong competitive price pressure and 50% of Polish consumers still buy their fruit and vegetables at markets or bazaars.

In Australia by comparison 20% of consumers are buying from greengrocers or markets, far lower than Poland still much higher than UK, where the proportion is 4%. The patronage of greengrocers and markets is influenced by hard wired consumer views on quality and range, which often stem from long term cultural influences.  Where the prevailing culture has a history of market patronage it serves a durable defence against modern retail formats.

FreshIncite: Australian consumers have enjoyed influences from Mediterranean, Asian and Middle Eastern cultures, all of which are likely to aspire to shop at fresh markets and strengthen the view that greengrocers lead on quality.  

Technology Frontier

Dubai golf course stays green with food waste Top

dubai_golf_course_3.jpg Dubai Creek Golf & Yacht Club is now using a combination food waste, fertilizer and water to keep their golf course green. The concept involves dehydrating the collected waste into compost and then using it on landscaped areas.

New innovative concepts to utilize food waste have the potential to turn it into a resource and impact its future. The eco-friendly benefits are now combining with uses that are placing an economic value on waste, this has the potential to encourage innovation.

An estimated 20% per cent of fresh fruit & vegetables sold at retail become waste, which amounts to over 580m tonnes of waste in Australia every year. This is now a substantial latent resource especially when there are more innovative ways to use it.

Sydney's flemington markets have begun an initiative to recycle their wasted produce, turning it into biogas. The biogas created from the food waste has the potential to power 247 homes and the new initiative could pave the way for more food waste related developments in Australia.

FreshIncite: All indications are that food waste will evolve to a managed and valued resource.

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Freshincite is a publication prepared by Freshlogic

Freshlogic is a specialised provider of food market insights and analysis, with deep expertise in the dynamics of fresh foods. We deliver a range of services to industry and corporate clients, which aim to interpret market and supply chain conditions, or address challenges faced in food supply chains associated with changes in the preferences of consumers, supply dynamics, and economic settings.

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