This guest article is an expert opinion from Cindy van Rijswick, Senior Fresh Produce Specialist from RaboResearch Food & Agribusiness
Vegetable consumption has been under pressure for many years in nearly all developed regions worldwide, despite all the media and government’s attention on health. But the tide is turning, and vegetables are gaining ground, slowly but surely. This will not happen just automatically. The vegetable sector is challenged to keep quality and taste high, to produce sustainably and, at the same time, balance its increasing risks and (not-increasing) returns. Without healthy businesses, healthy diets are impossible.
Vegetables are a win-win for people and the planet
There is increasing consensus around the world that a change is needed towards a healthier diet for people and the planet. Various prominent studies, like the Eat-Lancet report, WWF’s Livewell research, the Barilla pyramid, and the Planting up Progress Project, conclude that vegetables play a central role in a win-win diet for people and the planet. Compared to most other food products, vegetables are very efficient in resource use, while the nutritional value is high. The eat-Lancet report suggests that consumption of fruit and vegetables has to double by 2050 to reach the goals of a sustainable food system.
Easy and tasty
But how to promote vegetable consumption? Most parents must have experienced that science and commanding pieces of advice do not work to convince a child to eat (more) vegetables. What does seem to work are vegetables offered attractively, tasty and/or easy to buy, prepare or eat. There are also examples that creating a buzz around products can be successful. In the last decade, the overall consumption growth of fresh and frozen vegetables has been less than 1 percent a year in most mature markets worldwide, including North America, Western Europe, New Zealand, and Japan.
Growth in total consumption volumes of preserved (canned, bottled) vegetables was even close to zero or negative. Simultaneously, freshly prepared vegetables, such as stir fry vegetables and prepared salads, were growing at a high pace, an average 3 percent a year in North America and Western Europe, and almost 10 percent a year in Eastern Europe. Other vegetables that have gained popularity are snack vegetables, like snack tomatoes, versatile easy to prepare vegetables like sweet peppers, and exotic products with a halo of healthfulness like sweet potato. Blueberries and avocadoes have shown astonishing market growth rates, supported by much positive publicity on social media. It is not yet clear whether the increase in vegan, vegetarian, and flexitarian consumer habits has already resulted in higher vegetable sales. But these trends definitely offer opportunities for the vegetable industry. We have seen another trend in several mature markets, the rapidly growing sales via the foodservice channel. Foodservice sales grew for two reasons: growth in total foodservice expenditure and foodservice companies increasing the share of vegetables used.
Convenient home-cooking with more and more vegetables
The trend of growing foodservice sales has abruptly come to an end when COVID-19 spread around the world. The booming sales in on-the-go products, like prepared lunch salads, are heavily affected by the COVID-19-crisis and are not likely to bounce back quickly as tourism and business travel will continue to lag to pre-COVID-19 travel. And as more people will more often work from home, home-cooking will remain popular post-COVID-19.
For example, a big company like Facebook has announced that in the next five to ten years, half of its staff could permanently work remotely. But this is not to say that convenience is not essential anymore. It still is and will be but in a different way. Consumers are looking for services and products that fill the need to cook at home. Covid-19 has triggered the final breakthrough of e-commerce in the food sector. And meal kits, fresh packs, tasty frozen ready-to-prepare ingredients, and other solutions to make home cooking easy are thriving.
Supply chains have to work on logistics, packaging, transparency, and much more
It is challenging for supply chains to adapt to retailers’ many requirements and the quickly growing meal-kit and e-commerce market. The latter often require different logistics and packaging as compared to traditional supermarkets. A supermarket chain may, for example, require a consistent supply of many different package sizes of vine tomatoes. At the same time, a meal kit supplier demands a very high volume of loose tomatoes, each of the same size that is precisely suited for a specific recipe, only for a few days a month. Next to logistical challenges, sustainability requirements will remain very high. Increasingly retailers want to have insights into the sustainability achievements of their suppliers and specific products supplied. Recently large retail chains like Colruyt and Penny have announced plans to provide information on the environmental impact of certain products offered. In the future, it will be standard practice for many businesses in the vegetable supply chain, from grower to processor, to measure and share this information. Transparency will be essential for each company in the supply chain.
Without healthy businesses, healthy diets are impossible
The change towards a healthier diet for people and the planet will never happen without more sustainable incomes for those that grow and process them. There are many opportunities for players in the vegetable industry, but risks, variable costs, and capital expenditure are increasing. This is because there are issues around labor availability, and costs, extreme weather, and sustainability requirements.
Many innovations and technical solutions are available to cope with these challenges, but they all come at a cost. Harvesting robots will reduce labor need in the future, sensors early detect diseases, and in addition to that, reduce pesticide use, and advanced sorting equipment reduces food waste and food safety incidents. Just like consumers, governments, and retailers are more demanding. Businesses should also be demanding, requiring the return they need to grow a sustainable business.