Fruit and vegetable industry: trends & facts about the market

Jeroen Lustig
Published on
March 31, 2022

With growing consciousness around health, the fruit and vegetables industry finds itself in a favorable position. Naturally, with a health crisis being the defining feature of 2020, the industry as a whole was not impacted by decreased consumer demand. However, the pandemic did affect the industry in other ways.

Foodservice focused suppliers adapted quickly and established new routes to market making up for part of their sales drop

Foodservice focused suppliers took a big hit in 2020 (net sales: -15%), whereas retail focused suppliers were able to capitalize on growing retail demand (net sales: +5%). Trader mindset and way of working proves essential for effectively coping in volatile markets, as demonstrated by the industry’s fastest growing companies in 2020 – primarily traders.

As the pandemic fueled the fear of shortages, hoarding was a theme both at the consumer side and the supplier side of the industry

At the beginning of the pandemic, the retail market was characterized by the hoarding of shelf-stable products. Preserved and frozen fruit and vegetables got back into fashion, sparked by interest in the premium segment and stockpiling. A clear example was HAK, a Dutch branded preserved vegetable processor, which was able to grow its turnover by 17.1% in 2020.

Hoarding was not only a phenomenon at the end of the value chain: also suppliers benefited from hoarding as other players feared the collapse of the supply chain. This resulted in a sales growth of 9.5% of the supplier segment, making it temporarily the fastest-growing value chain link.

Pre-COVID trends were either enlarged or temporarily broken

Previously, we underscored the increasing complexity and compliance problems in the industry. The pandemic accelerated and enlarged these problems, putting even more pressure on profit margins for all value chain links. In 2020, these were partially mitigated by savings due to a drop in expenses (traveling, sales events etc.) because of the pandemic – which impacted primarily globally active companies in a positive way.

Overall, growth in processed products (both preserved and frozen) has flattened over the past years while fresh achieved higher growth rates. In 2020, however, we saw a temporary acceleration of growth in preserved and frozen due to the pandemic. With growth stagnating, the focus is shifting towards scale and efficiency, as an end-game for the processing segment leading to a few large conglomerates.

Want to explore the strategies of the 2020 fast growing companies? And know all the effects of the pandemic on the different links in the value chain? Download our newest trend report on the fruit and vegetable industry, via the button below.

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