Falling European production of vegetables in the wake of unseasonal conditions could present opportunities for the frozen food industry, reports Jonathan Thomas.
Fruit and vegetables represent an important component of the European food industry. These tend to be eaten in either fresh, frozen or canned format – in recent years, the frozen market has made much of the fact that essential nutrients are ‘locked in’ during the freezing process, thereby appealing to consumers’ health considerations. Many authorities across the region, together with organizations such as the World Cancer Research Fund, continue to stress the importance of increased fruit and vegetable intake as part of a healthy diet. Fresh produce has been linked with reduce risks of heart and cardiovascular disease, as well as cancer and stroke.
Consumption of fruit and vegetables varies across Europe. According to Eurostat data, almost two-thirds (65.5%) of people in the EU28 countries ate at least one portion of fruit or vegetables per day in 2014, with over half (51.4%) consuming between 1 and 4 portions. This drops to 14% for people eating more than 5 portions during a typical day.
This data suggests that fresh produce remains a staple of the diet for most people in Western Europe, although a third still eat little or no fruit and vegetables, which is perhaps a little worrying from a health perspective. There have been some tentative proposals made to increase the number of recommended daily portions of fresh produce, possibly to as high as ten a day. Given the data above, this would appear to be somewhat unrealistic for the majority of the population.
At almost 84%, the percentage of the population eating at least one portion per day is highest in Belgium, a figure which decreases to nearly 80% for Portugal and over three-quarters for both the UK and Italy. Belgium also boasts the highest percentage of consumers eating 1-4 portions per day, at 71.2%. Elsewhere, just over a third (33.1%) of UK consumers claim to eat five or more portions of fruit and vegetables per day.
At the other end of the scale, fewer than 55% of people in both Germany and the Netherlands eat at least one portion during an average day. At less than 10%, the percentage of people eating five or more portions of fruit and vegetables is especially low in both Germany and Sweden. Consumption of fresh produce is also on the low side in the Netherlands, where less than 30% of people claim to eat between one and four portions of fruit and vegetables in a typical day. This figure decreases to 25% for five or more portions.
Within the last year, adverse weather conditions – examples of which have included snow, frost and flooding – have adversely impacted upon production of vegetables across parts of Western Europe. This has been particularly acute in leading producer countries, such as France, Spain and Italy. In Spain’s Murcia region, for example, overall production of vegetables is down by 30%, with no recovery expected until April. This has led to price rises for vegetables such as tomatoes, courgettes, cabbages and aubergines, whilst iceberg lettuce is even being rationed in some of the UK’s supermarkets.
It has been suggested that these potential shortages could present opportunities for suppliers of frozen vegetables, which enjoy year-round availability. Across most of Europe, demand is increasing for frozen fruit and vegetables, due to the growing consumer desire for more convenient and easy to prepare foods. The EU is the world’s largest regional market for frozen fresh produce, with imports valued at EUR4.9bn in 2015. Exports of frozen fruit and vegetables during this time were worth EUR4.5bn.
Frozen Vegetables
Frozen vegetables are a widely-eaten meal accompaniment in Western Europe and further afield, as a result of which sales are high in both the retail and foodservice sectors. The market includes both traditional favorites such as peas, carrots, broccoli and green beans, as well as more exotic varieties positioned as convenience and/or added-value products, such as stir-fry mixtures. Total consumption of frozen vegetables in Europe (i.e. including the retail, foodservice and industrial sectors) is between EUR8bn and EUR9bn per annum, with annual growth on the low side since the market is mature.
Western Europe’s largest retail markets for frozen vegetables include Italy and Germany, where sales in each case are worth over EUR600m per year. Expressed as a percentage of the total frozen foods market, the share taken by the frozen vegetables sector is highest in Italy, at more than 20%. This drops to less than 10% in other large markets such as Germany and the UK, and reflects the mature state of the category, as well as high household penetration rates and low innovation levels. In a bid to keep the sector relevant in the eyes of consumers, manufacturers have introduced products packaged in microwaveable formats, as well as experimenting with ethnic varieties such as Asian recipe stir-fry mixtures.
Belgium is Europe’s largest producer and exporter of frozen vegetables, especially for varieties such as cauliflowers and broccoli. Annual domestic output is valued at more than EUR1bn, whilst at almost 3.6 kg, per capita consumption is also relatively high. In 2015, Belgian exports of frozen vegetables were worth EUR1.2bn, equivalent to around 1.38 million tons in volume terms – Germany was the country’s leading export market with a 24% share, ahead of France (21%). Belgium is also a significant importer and re-exporter of frozen vegetables – in 2015, imports rose from 410,000 tons to 447,000 tons, worth EUR385m in value terms.
Another major producer and exporter of frozen vegetables is Spain. In 2016, domestic output rose by 8% to almost 686,500 tons, worth EUR690m by value. Exports grew by 6% within the last year, and now account for 57% of production by Spanish-based firms – major overseas markets for Spanish frozen vegetables include France, Germany and the UK. Spain is one of the region’s largest suppliers of broccoli, in that 81% of domestic production is exported. Other significant vegetable exports include peas and peppers.
Frozen Fruit
The world market for frozen fruit continues to expand, and is currently worth over $1.8bn by value. Red fruits and berries account for over half (53%) of global market value, ahead of citrus and tropical fruits. Frozen fruit tends to be either individually quick frozen (IQF) or freeze-dried, with the former method leading growth at present since it is considered especially suitable for a variety of applications. Although the industrial sector accounts for the bulk of sales, consumers are now showing more interest in frozen fruit at the retail level.
The market has also benefited from increased demand for frozen fruit as an ingredient in other sectors of the food industry. Notable examples have included bakery goods and dairy products, where demand for berry fruits remains as high as ever, whilst food manufacturers are also showing an interest in more exotic varieties such as kiwifruit. In late 2016, the Country Range foodservice brand was extended in the UK with new frozen fruits marketed as ideal for applications such as smoothies, breakfast juices and cakes and desserts. The new varieties were strawberries, raspberries and a summer berry mix.
Major Suppliers
One of Europe’s leading suppliers of frozen vegetables is Nomad Foods, which encompasses the Birds Eye and Iglo brands, as well as the European operations of Findus. In 2016, sales of its frozen vegetables were worth almost EUR407m, whilst the sector represents the company’s second largest in terms of revenue, trailing only fish and seafood. Frozen vegetables primarily appear under the Birds Eye, Iglo and Findus brands, and Nomad accounts for 24% of sales in the markets in which it operates. It occupies the top spot in 11 countries, including the UK, Germany, Italy and Spain. Production of frozen vegetables takes place at several sites across Western Europe, although the Bjuv facility in Sweden has been earmarked for closure during the first half of 2017.
Greenyard Foods Group is also present, and claims leadership of the global market for fresh and prepared fruit and vegetables. It operates four business units, one of which is Pinguin – this supplies frozen vegetables, processing over 400,000 tons per year at 10 production facilities. The company sells its frozen vegetables to customers in the retail, foodservice and industrial sectors, although the retail sector accounts for a sizeable 89% of the parent company’s revenue. Pinguin’s bestselling varieties of frozen vegetables include carrots, green beans and peas, which account for a combined 50% share of its sales.
Another leading European supplier of frozen vegetables is Bonduelle, which accounts for 18% of the frozen vegetables sector in its native France. Its home market accounts for almost a third (31%) of the company’s EUR1.96bn revenue, and the company operates 54 processing facilities. Bonduelle’s vegetables are sold in fresh, canned and frozen format to customers in both the retail and foodservice industries, with the canned sector accounting for almost half (49%) of overall revenue. These figures compare with 30% for frozen vegetables and 21% for fresh varieties. Besides France, the Bonduelle brand also competes in Germany, Italy and the Benelux nations.
Ardo is a global supplier of frozen fruits, vegetables and potato products, and exports to 58 countries worldwide. It produces and sells 805,000 tons of products per annum, and its customers span the retail and foodservice sectors. Its range of frozen vegetables includes the Express brand of pre-cooked vegetables and vegetable mixtures, as well as Bio Organic (a range of organic frozen vegetables) and A Table, prepared products aimed at the convenience market. In addition to vegetables, Ardo’s range also includes frozen fruit, which appears under the Les Fruits label. This encompasses 15 different varieties, examples of which include berry fruits, plums, rhubarb and exotic and tropical fruits. Ardo also supplies frozen herbs (e.g. thyme, oregano, basil and parsley) under its Fines Herbes banner.
Other suppliers worthy of note include Spain’s Virto Group, which sells approximately 250,000 tons of frozen vegetables per annum, and whose range also includes frozen pulses and fruits. Elsewhere, Frosta accounts for almost 10% of the frozen vegetables market in its native Germany, with a range that includes both ethnic-inspired and regional German products. Sales of own-label products are also considerable within many of Western Europe’s frozen vegetable markets.
