The international berry trade has grown enormously in recent years, varietal development has made great strides and consumer appetite for berries seems unstoppable. For the berry industry, focusing on quality is of utmost importance to maintain the strong consumer appetite for berries. At the same time, companies need solidity to cope with challenges such as increasing competition, rising costs and workforce issues. The latest edition of the Global Berry Congress (GBC), held since before the berry boom in Europe really took off, brought five main themes, which we discuss below.
Summary
CONSUMERS' UNSTOPPABLE APPETITE FOR BERRIES
A satisfying recurring theme in speeches at various GBC events is the continued steady growth of the (potential) market for berries, particularly blueberries. Per capita consumption levels vary significantly around the world, even within markets such as the EU, which is often designated as mature (Figures 1 and 2). Not to mention Asia, where consumption has barely taken off. There are several factors that will drive further consumption of berries: increased availability, improved quality and consistency, growing health awareness, and a continued preference for convenience and accessibility.
EXPANSION OF BLUEBERRIES AND FLATTENING OF PRICES
The supply of blueberries in the EU market has continued to expand in recent years (see Figure 3). In addition, the US market has absorbed increasing supplies of blueberries. A trend we observe in both North America and Europe is theflattening of price levels for blueberries. In Europe, this occurs mainly during the overseas season (September-March) and in the US mainly in June-August and October-March. Upcoming exporters such as Morocco, Mexico and Peru have pushed supplies out of season.
For the coming years, we expect afurther expansion of global supplies of blueberries, together with a flattening of prices, as investments in plantations at blueberries are not yet finished and recent plantations have not reached their full production capacity. The potential upside of lower price levels is that this will encourage consumption. Increased availability will result in larger packages and lower prices. This has already been seen in the US at the peak of arrivals from Chile, and in Germany during peak supplies (see Figure 4). A positive side effect of this trend is a reduction in the use of plastics.
UNVEILING THE PACKAGING CHALLENGE
The intensive use of plastic packaging is one of the other much discussed, but less happy, topics in the global berry industry. Spain and France recently announced a ban on packaging for fresh (consumer-friendly) produce. Delicate products such as berries are still excluded, but according to GBC buzz, it is only a matter of time that other countries follow in implementing stricter regulations. But this is easier said than done. Delicate and perishable products, such as berries, cannot travel without packaging, and alternatives such as cardboard packaging still have several disadvantages compared to plastic packaging. Potential disadvantages are related to convenience, shelf life, food safety, visibility, durability and cost. However, many companies are working hard to recycle and reduce plastic. Some exporters, for example, ship blueberries in bulk (e.g. a single 3kg box) to be repackaged at destination according to local customer specifications.
AVAILABILITY AND COSTS OF LABOUR, OTHER INPUTS AND LOGISTICS
The problems of rising costs are not just limited to packaging. Various other cost factors in production and distribution, including energy, labour, transport and fertilisers have skyrocketed recently. In the case of labour, the lack of it is even more worrying than the mere rise in costs. Increasingly, the lack of people willing or available to work in the berry sector is a global problem.
Companies use different strategies to manage this problem. Some are switching to more valuable varieties, while others are switching to higher-yielding varieties. Others are increasing the share of mechanically harvested blueberries , thus selling more berries for the frozen processing industry.
Several large operators have invested in or collaborated with developers of harvesting robots . Strawberry growers in Europe are increasingly turning to covered production systems to increase labour productivity. In addition, in North America we are seeing increased investment in strawberry production in controlled environments such as greenhouses. This serves multiple purposes: to increase labour productivity and to enable more local production. Particularly for strawberries, localisation is a trend, but it comes at a cost.
The various cost increases will result in lower margins for growers or higher retail prices for berries. One of the questions raised during the GBC is whether higher prices will have an impact on berry consumption. Opinions on this issue differ. Some in the industry believe that consumers may move away from berries towards more affordable fruits such as apples and bananas. Others believe that flavour, snackability and healthy attributes will continue to drive berry consumption growth, despite potential price increases.
NOTHING BUT QUALITY
The solution to many (but not all) of these challenges is quality. The industry unanimously agrees on the importance of the quality and consistency of the berries supplied. A market survey by Normec Foodcare on consumers' perception of the quality of blueberries shows that only one in three buyers of blueberries in the Netherlands is satisfied with the taste. In Germany, this is one in five.
This brings us back to the subject of the unstoppable appetite for berries. While inconsistent quality has not stopped consumers from eating more and more berries, there is still a world of opportunity, provided that quality and availability are both right. Hopefully, availability will not be stopped by rising costs and a lack of labour.
Source: Rabobank
