Health-Conscious Consumers Drive Up Fresh Produce Prices

Farmer's Weekly|July 03, 2020

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Health-Conscious Consumers Drive Up Fresh Produce Prices
Consumer interest in healthy eating is pushing up sales of fresh produce. But looking at the commodities that experienced the highest growth over the past few years, one thing is clear: information, marketing, packaging and branding hold the key to increasing demand and staying competitive. Lindi Botha spoke to industry experts Jaco Oosthuizen and Kandas Cloete.
Lindi Botha

Market trends can be fleeting, and any business would be remiss were it to change direction and invest in fads without a clear idea about the longevity of the public’s interest. This is especially true of agriculture, where the return on investment is often realized years into the future.

Amongst the changes in economic activity seen over the past few months as a result of the coronavirus disease (COVID-19) lockdown has been a noticeable increase in the consumption of fresh produce. Upon closer inspection, however, it appears that demand for certain fresh produce items has been increasing for quite some time, as consumers re-evaluate their eating habits and make permanent changes (see table and graph).

However, contrary to the laws of supply and demand, which normally see the price of a product going down as supply increases and vice versa, most of the products that have shown the highest price increases have also experienced a surge in production. Another development worth noting, according to Jaco Oosthuizen, CEO of the RSA Group, is that thanks to improvements in farming operations due to new technology farmers are now able to provide certain produce year-round.

“This increases demand significantly because as more products are available, more consumers are including them in their diets on a more regular basis, instead of just from time to time when the product is available. And because the supply has grown, so has the demand, keeping prices stable, and in some instances increasing them.”

THE TOP FIVE

Asked to list the five products that have experienced the greatest price increases on fresh produce markets since 2015, the RSA Group places ginger at the top, followed by red peppers, blueberries cauliflower and lettuce.

The trends driving the demand for these specific commodities can be applied to many other fresh produce items, which could also increase in price in due course.

Oosthuizen explains that the growth in these categories can be attributed to a change in consumer behavior and a greater emphasis on personal well-being.

“This is proved by the probiotic benefits in produce such as ginger, red peppers, and blueberries,” he notes. “There’s also an international move towards ‘superfoods’, one of which is blueberries.”

In addition, the Banting diet trend increased the need for carbohydrate replacements such as cauliflower and broccoli. As these vegetables gained popularity among Banting enthusiasts, people who did not follow the diet also tended to buy them more often.

“As more recipes emerge using cauliflower as a rice or pasta replacement, we find the demand increasing,” explains Oosthuizen.

RED PEPPERS

Availability has also played a role in the increase in demand for red peppers.

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July 03, 2020