Trends in the UK: Organic Potatoes on the Rise

Greenvale, one of the leading suppliers of fresh potatoes and the UK's largest supplier of organic potatoes, has unveiled that the total organic potato market in the UK is growing, while for the maincrop it remarks a decrease in volume and value.

Greenvale has recently launched its report “Food Trends through the Eyes of the Shopper”.

With the help of over 400 UK shoppers, Greenvale explored the 2018 food trends alongside changes in grocery shopping and eating habits, to find out just what might be next on consumers’ plates in 2019.

“The total organic potato market has increased in volume by 7% to 10,806 tons and up in value by 7.2% to GBP12.4m in the last year. Prices have remained steady with just a small increase by 0.2% to GBP1.15/kg. There has been an increase in Organic shoppers with an uplift of 11.7% in shopper penetration in the last year. Most of the category growth has come from Asda, Aldi and Waitrose. With Waitrose featuring promotions to increase shoppers and purchase frequency. Whereas Asda and Aldi have increased sales from a low base and expanded their ranging whilst attracting new shoppers,” the report shows.

However, the potato category didn’t work so well on all segments, as a maincrop, volume has fallen with less promotions in the market in the 2nd half of the year due to supply. Trip volume has increased adding GBP1.4m to the sub category. The total market value reached GBP493m, meaning a decrease of 4.1% YoY, while total market volume summed 812k tones, going down by 1.3% YoY.

Furthermore, potatoes for baking is driving category volume growth through new shoppers and an increase in trip volume. Total market value decreased 4.1% YoY, to GBP238m, while the total market volume reached 288k tones, meaning a rise of 6% YoY.

Volume has also grown slightly with new shoppers and an increase in trip volume. The hot summer helped drive sub category sales. Total market value was GBP279m (-2.1% YoY), while total market volume recorded 224k tones (+0.6% YoY).

Throughout grocery, private label tiers are growing, with the premium market being up 9% and economy tier being up 5%.

As distribution channels, the discounters continue to win in a climate of inflation, the report says. Shoppers are still visiting multiple retailers on the same day. “19% of the time we visit a Big 4 (Tesco, Sainsbury's, Asda, Morrisons), we will visit a Discounter on the same day. With potatoes, there’s no surprise that discounters increased volume the most in the last year. It may surprise you that discounter deflation was not too far behind the total market. Most of the growth has been from new store openings and an increase in shoppers,” the report states.

Online volume purchases increased too, aided by a growth in purchase frequency. Supermarkets managed to hold their own with no change in overall year-on-year volumes. Most of the volume decline has come from the convenience channel.

Tesco still holds the largest value and volume market share with potatoes. In the last year Aldi, has experienced the highest volume share gains. They have recorded good shopper growth and have also grown purchase frequency.

According to Kantar Worldpanel, quoted by Greenvale, data values the UK fresh potato retail market at GBP1bn. In the last year, this value has decreased by 4% which was due to the level of deflation seen in the market place. The deflation was driven by the number of promotions seen in the first half of the year. Because of cheaper potatoes, volume increased by 0.5%. In volume terms, this added another 5,414 tones to the annual sale. The fresh retail potato market represents a staggering 1.3m tones which is the largest produce volume category. Potato volume growth for the last year was ahead of produce, vegetables and fruit.

Predictions for 2019

Shopper confidence appears to be holding up despite Brexit uncertainty. “Our panel voted confidently by 74% that they haven’t cut back on their household spend in recent months,” the report says. Shoppers do however expect food prices to increase with 64% showing concern over this. There will be an increased focus on price ahead of quality, Greenvale predicts. With less use of promotional tactics there will be a need to create a personalized and differentiated proposition to engage diverse shopper missions – the company forecast.

Due to supply, volume sales will be under pressure so there will be a small reduction in volume which will be from maincrop. With new potatoes, Greenvale is hoping for another warm summer to match sales seen in 2018. With baking potatoes, the company is currently seeing strong volume growth, which will start to ease, but sales will remain in growth by the end of the year. Overall the volume prediction will be for a small reduction in volume, not more than 1% with inflation, so this will drive value up by 1% to 2%.

“With consumers being more mindful of the environment and ethically aware there will be further growth from organics of 5%. Premium sales growth will continue, as it presents a great opportunity to drive incremental sales and trade consumers up. Our prediction is for 3% volume growth for this year. Discounters will continue to increase their market share through new store openings. The convenience and online channels offer a great opportunity to expand ranges to meet the changing needs of time poor shoppers. Supermarkets will continue to fight for volume growth and may experience a slight volume decrease of 0.5%,” the potato supplier forecasts.