Australia’s fresh produce retail market is dominated by a group of larger categories that each generate over $600m in retail sales, such as berries, apples, bananas, tomatoes or potatoes, and which make up more than 30% of the market and rightly get most of the attention. However, these categories are mature and their growth prospects are shaped quite differently to other categories of lower value.
There are 16 fruit and vegetable categories with annual retail sales of $100m-200m, however, which represented more than 20% of total fresh produce retail sales in the 12 months to June 2014. This group includes products such as cauliflower, sweet potatoes, kiwifruit and cherries. Importantly, the growth prospects for these categories are different, as they typically have lower household penetration, less consumption occasions or limited product ranges and at times an approach to promotion that is not generating growth.
To realise these gains a sound understanding of category dynamics is required, and in many respects generating growth in these smaller categories is a simpler, more manageable proposition than the larger categories. While larger categories reflect examples of successful development, frequently lessons can also be learned from other small and medium-sized categories which are already on a growth trajectory.
The numerous sub-$200m fruit & vegetable categories offer a wide range of growth prospects with potential to add significant incremental value to the market.