The United Kingdom is one of the world’s biggest consumers of table grapes and a dynamic and competitive market that can absorb a wide range of varieties and quality tiers. Consumption trends have many nuances that set it apart from European neighbors, but with catastrophic forces at work, from Brexit to Covid-19, it is also a turbulent landscape for grape producers to navigate.
To better understand these consumer trends and what 2022 might have in store for table grape consumption, we spoke with Joseph Shaw Roberts, consumer insight director at Kantar World Panel.
“It’s an interesting period because we are coming off the back of really high demand for groceries in the UK and in the world, for take home grocery shopping and grapes did well,” Shaw Roberts told The Grape Reporter.
Demand in general for groceries is slacking off a bit, but grapes continue to grow, even if at a slightly slower pace than before.
Over the last 12 weeks there has been some frequency loss from consumers but prices are starting to push up slowly. Specifically, grape prices have risen at a rate of 2% over the last 12 weeks, which is below the general inflation rate seen across the UK economy of 6% in the same period.
Last year at this same time, the inflation rate was negative, dropping just over 1% in the 12 week period.
As for what is coming in 2022, it's likely that the market is only starting to see the beginning of the inflation and that this price curve will become more accentuated as time goes on. Up until now, much of the inflationary pressure has been absorbed by producers. Competitive retail offers had pushed grape prices down.But with production costs growing, it will start to move up the supply chain towards the end consumer.
This creates friction though, Shaw Roberts said that the consumer is still looking to keep their costs down due to the high levels of economic uncertainty stemming.
The level of people who say they are struggling is rising. This means people will either: buy less, shop at cheaper stores or choose cheaper products.
Shaw Roberts added that with this uncertainty, shoppers tend to move spend away from standard, middle level grapes in a three tier system, and more UK shoppers will either go with the most economic option or if they are not struggling, opt for higher quality, premium grapes. This latter market has continued to persist despite the economic issues affecting the country as a whole.
Over the last few years, the UK has been hit with both Brexit related economic woes, and then saw the impact of Covid-19 piggy backing on that crisis. This has then accelerated the effects on everyday household and its spending.
Even with the downturn in the number of shoppers choosing grapes, the rise in prices has kept overall sales levels up, and those consumers that do choose grapes are buying more per purchase.
For retailers, Shaw Roberts expects that it will be difficult for the UK’s bigger chains to retain their dominance of purchaings, with a greater share of purchasing going to smaller, neighborhood “top up shops” that can fulfill the consumer demand.
“You have a lot of small grocers offering online top ups, similar to Uber eats”, and Shaw Roberts expects the combination of these channels to eat into the market hold of bigger retailers.
While the Kantar World Panel does not track specific grape varieties, their performance or projections at an individual level, when looking at general categories like white, red or seedless, it is mixed packs of seedless grapes that are performing better with the UK consumer.
When breaking down the UK consumer, a past study indicated that there is a minority sector of the market that is responsible for a far greater share of purchases, and the industry would do well to try to get more consumers into that subset.
According to Kantar’s research, 20% of grape shoppers account for 58% of grape spend. This is a normal pattern in most grocery categories. These ‘heavy’ households spend £75 per year on grapes, compared to ‘medium’ households who spend £25 and ‘light’ households who spend £6 per year. It’s clearly important to win with these consumers, who are more likely to be retired, 2 member households vs the medium and light groups.
Retailers would also do well to get specific demographics, in particular men, to buy more grapes in order to harness continued growth. Men account for 31.8% of grape consumption but 35.7% of fruit consumption, so there is certainly room to grow here.
In general, the executive said that the grape market has behaved much like produce in general where private labels have been denominated by retailers, especially for the higher value tier of premium grapes. Shaw Roberts does not expect that growers or exporters have a clear chance to get their own brands positioned on supermarket shelves.
The success for retailers to keep their grape purchases growing comes back to their tiering strategies, Shaw Roberts added, if consumers are not given clear alternatives, the industry could easily see more fruit buyers downgrade to cheaper fruits and forgo grapes. Options must be available.
“If retailers chains give shoppers some choice to trade up and down that spectrum, it's a great way to manage that inflation” Shaw Roberts added.
In terms of logistical and staff issues, Shaw Roberts said that he did not know of one company that was not facing some sort of manpower shortage. For retailers dealing in grapes and other produce, the products are available, but the question is having the staff to move them.
