Consumers are turning away from fresh foods, Belgian fruit and vegetable processor Greenyard says. Its sales in the fresh department have dropped by 2.5 % (in volume), but price increases and a rise in “long fresh” sales still gave Greenyard a nice sales rise.
Covid and inflation hit
Comparable net sales still rose 7.2 % to 3.38 billion euros in the first nine months of the financial year. In the quarter ending 31 December, sales climbed 6.8 % to 1.11 billion euros. The growth did come mainly from price increases, especially in the fresh produce segment.
Indeed, Greenyard sold 2.5 % less fresh fruit and vegetables (by volume), however price increases of 7.4 % still pushed net sales in the Fresh segment by 5.3 % to 2.75 billion euros (in the past three quarters). Also, volumes were still 6.5 % higher than before inflation, the company reassured.
The company gave two explanations for this: European consumption of fresh produce was expected to fall in 2022 (by 10 % per person), as people are eating at home less and are cooking for themselves not so often any more post-pandemic. High inflation is also a factor, causing Europeans to save and turn to “affordable” canned and frozen foods.
Price hikes pass on costs
In the “long fresh” category (frozen and canned food), volume did indeed increase by 16.3 %. 10.7 % came from price increases, 5.1 % from volume increases. Greenyard thus believes it is in “a favourable position for further growth once the macroeconomic environment normalises”.
Will prices rise further this year? Yes, the “expectation is that, in the medium term, prices will rightfully reflect the complexity and true costs in the chain”, Greenyard expresses cautiously. At the same time, volumes will recover, according to the company.