The UK retail market for fresh vegetables and fruit reached £7.07bn in 2005, having grown by 21.7% since 2001. This represents higher growth than in a number of food and drink sectors. Vegetables accounted for 52.4% of sales value in 2005 and fruit the remainder. Salads, tropical fruit and berries (e.g. strawberries) are among the highest growth segments. Fresh produce is a staple grocery item, accounting for 14.8% of weekly expenditure on food and drink in 2005.

Overall sales value has been boosted by products offering greater convenience such as pre-packed salads. According to the Department of Health, a third of people who do not eat vegetables say this is because it involves `too much effort'. With this in mind, the industry has focused on convenience. This is shaping developments in a number of fresh product sectors, with Del Monte, for example, launching a new range of fruit snacking products in early 2005. The market has also benefited from a greater availability of a number of fruits and vegetables throughout the year as seen with strawberries. While the UK's reliance on imports for its fruit is a potential disadvantage — especially in terms of price pressures on domestic producers — the rich diversity and year-round availability of most fruits are a definite advantage. Healthy eating continues to be a driver of fresh produce, with more suppliers labelling their products to tie in with the Government's `5 A Day' campaign. Local sourcing — especially for potatoes — has been another way in which the trade has sought to grow sales in what is otherwise a fairly flat market.

Pressure from the major grocery multiples — in terms of price, standards and requirements for added-value products — has led to greater consolidation in supply in a sector that still remains fragmented compared with most other food and drink sectors. Any new entrant to the fresh produce sector faces formidable obstacles due to the high level of vertical integration by the major players. The number of UK wholesale markets for fresh produce has fallen by around a quarter since 1992. Some trade insiders have commented that the catering/foodservice sector provides growth opportunities for wholesalers.

As with other foods, legislative requirements affect the fresh produce sector. Traceability, genetically modified (GM) crops, organic production and pesticide usage levels are issues especially relevant to fresh produce.

Fresh produce will continue to be an area of increased focus by the major retailers, especially as they provide a point of brand differentiation for them. The sector is also expected to benefit from initiatives to meet the demands for convenience, particularly coming from the growing number of single-person households. Increased investment by retailers in convenience stores — which tend to have a higher proportion of their space dedicated to fresh produce — as well as snacking and the lower per capita consumption of fresh fruit and vegetables in the UK, compared with most other leading European countries, are among other factors likely to boost future growth.

The UK retail market for fresh vegetables and fruit reached £7.07bn in 2005, having grown by 21.7% since 2001. This represents higher growth than in a number of food and drink sectors. Vegetables accounted for 52.4% of sales value in 2005 and fruit the remainder. Salads, tropical fruit and berries (e.g. strawberries) are among the highest growth segments. Fresh produce is a staple grocery item, accounting for 14.8% of weekly expenditure on food and drink in 2005.

Overall sales value has been boosted by products offering greater convenience such as pre-packed salads. According to the Department of Health, a third of people who do not eat vegetables say this is because it involves `too much effort'. With this in mind, the industry has focused on convenience. This is shaping developments in a number of fresh product sectors, with Del Monte, for example, launching a new range of fruit snacking products in early 2005. The market has also benefited from a greater availability of a number of fruits and vegetables throughout the year as seen with strawberries. While the UK's reliance on imports for its fruit is a potential disadvantage — especially in terms of price pressures on domestic producers — the rich diversity and year-round availability of most fruits are a definite advantage. Healthy eating continues to be a driver of fresh produce, with more suppliers labelling their products to tie in with the Government's `5 A Day' campaign. Local sourcing — especially for potatoes — has been another way in which the trade has sought to grow sales in what is otherwise a fairly flat market.

Pressure from the major grocery multiples — in terms of price, standards and requirements for added-value products — has led to greater consolidation in supply in a sector that still remains fragmented compared with most other food and drink sectors. Any new entrant to the fresh produce sector faces formidable obstacles due to the high level of vertical integration by the major players. The number of UK wholesale markets for fresh produce has fallen by around a quarter since 1992. Some trade insiders have commented that the catering/foodservice sector provides growth opportunities for wholesalers.

As with other foods, legislative requirements affect the fresh produce sector. Traceability, genetically modified (GM) crops, organic production and pesticide usage levels are issues especially relevant to fresh produce.

Fresh produce will continue to be an area of increased focus by the major retailers, especially as they provide a point of brand differentiation for them. The sector is also expected to benefit from initiatives to meet the demands for convenience, particularly coming from the growing number of single-person households. Increased investment by retailers in convenience stores — which tend to have a higher proportion of their space dedicated to fresh produce — as well as snacking and the lower per capita consumption of fresh fruit and vegetables in the UK, compared with most other leading European countries, are among other factors likely to boost future growth.