June 6, 2017 —
Perishable Pundit Overview:
Making Produce Marketing Everything It’s Not: Creative, Innovative, In-your-face, Non-conventional, Digitally Driven, Attitude- And Adventure-oriented…
Nic Jooste Of Cool Fresh Guides The Trade On How To Capture Gen Z And, Next, Gen Alpha!
Cornell Professor Brad Rickard
Returns To London To Unveil New Study:
QUANTITY, VALUE AND DIVERSITY —
The 10-Year Evolution Of Consumer Purchase Preferences For Packaged Produce
Clive Black, Esteemed Stock Analyst, Gives London Produce Show And Conference Attendees Insight Into How Online Shopping, Consumer Price-consciousness And Brexit Will Impact The Industry
Chris Cowan Of Kantar Worldpanel UK Shares His Data-Strong Insights On The Future Of Produce Retailing At The London Produce Show And Conference
Superstar Roberta Cook
Guides London Produce Show Attendees
On NAFTA, The Impact Of Trade
And The Perils That Lie Ahead
Can Children Be Wooed To Eat Bitter Vegetables? Wageningen University’s Gertrude Zeinstra Presents New Research: Is Repetition The Key To Healthy Habits? Insight Shared At The London Produce Show And Conference
Nic Jooste is a marketing magician. He doesn’t have the resources at his disposal to buy massive television campaigns, yet he has managed to create marketing campaigns that have won Cool Fresh, the company he represents, a cult following in certain quarters.He doesn’t do this just by gut, he does research to inform his campaigns. Particularly focused on the young adults in society, his research points to a need to market produce in a way different than it has been marketed before. We asked Mira Slott to find out what he has in store for attendees at The London Produce Show and Conference:
Partner and Director of Marketing,
Cool Fresh International
Ridderkerk, The Netherlands
Q: You’ve wowed attendees with your dynamic, thought-provoking talks, memorably to help launch our seminal Amsterdam Produce Show last November and to enhance our long-running, iconic New York Produce Show and the concurrent Global Trade Symposium:
PRODUCE AND GENERATION Z
Can We Make Our Pitch Effective In Eight Seconds Or Less?
There’s a Dutch Saying...
Amsterdam Produce Show To Bridge Cultures And Channel Innovation
Dutch Marketer Nic Jooste Will Share His Thoughts On Swimming Upstream At The Global Trade Symposium]
Now in London, you’ll be participating in a targeted all-day seminar program on the majestic main stage balcony overlooking the trade show activity. Sponsored by the Dutch Embassy on behalf of the Dutch fresh fruit and vegetable sector, speakers will examine strategies primarily aimed at getting children to eat more produce.
Yet, you’ve channeled an aggressive focus on capturing Generation Z, the cohort following the Millennials, raised in the Internet and social media age. Will you continue your out-of-the-box angling? And if so, why Gen Z?
A: I believe that the bulk of the London attendees would not have heard my Gen Z presentation, so I will familiarize them with the content coupled by some new ideas. The reason is that this consumer group will comprise 40% of the consumer population by 2020. I believe it is of paramount importance that fresh produce companies create strategies to embrace this group, and by focusing my presentation on Gen Z I can add the most value to the LPS.
Q: How fortunate for LPS attendees to be treated to an encore performance! You’ve undertaken fascinating research to glean insights into the discernments of this fast-growing, elusive, and increasingly influential population. And you’ve turned these revelations into clever marketing campaigns to catch their attention and steer them to fresh fruits and vegetables. Could you elaborate on why the produce industry should take notice and follow suit?
A: For the simple reason that Generation Z is everything the fresh produce industry is not --- creative, innovative, in-your-face, non-conventional, digitally driven, attitude- and adventure-oriented, etc. I believe our industry can learn a huge amount from Gen Z, and that by immersing ourselves in their behavior, we can design new marketing solutions to increase the declining consumption of fresh produce.
Q: What can we learn exactly? Are there particular traits or stimuli enveloping Gen Z?
A: Luth Research sums it up as follows:
With so many screens vying for the attention of Generation Z, it’s vital to know where to focus marketing efforts to get through to these individuals. A good place to start is to consider a few things that are important to Generation Z.
First, Visuals: Generation Z typically eschews traditional social networks like Facebook in favor of visual-based platforms such as Snapchat, YouTube, or Instagram. Their television consumption is far less than millennials, indicating that the visual aspect is more about self-expression and community.
Second, Charities: A Maclean’s article says that 60% of Generation Z wants jobs that have a social impact and 26% already volunteer. This generation cares more about brand transparency, and wants to support companies that are actively doing good.
Third, Innovation: Generation Z places a strong emphasis on being innovators – the widespread reach of social media and the increasing popularity and success of crowdsourcing have allowed the inventors in this generation to truly flourish.
International Business Times wraps it up simply: “They’re humble, phone-obsessed and they like video games. They’re worried about the environment, choose visuals over text and prefer incognito social media platforms.”
For brands to engage Generation Z, it’s best to consider an approach that appeals to their desire to change the world. As Generation Z turns further away from traditional ads and marketing, they’ll begin to look more towards brands and companies they can believe in and want to be a part of. This means that a focus on authenticity and transparency will be moved to the front of marketing campaigns, creating a new form of storytelling that can appeal to the activist hearts of Generation Z.
Q: How do you translate all these insights into effective marketing strategies and stay ahead of these lively technology platform twists and turns?
A: The media usage and consumption of Generation Z tells us a lot about where marketing is headed in the not-too-distant future. This group is both more conservative and more driven to make a difference than past generations, and their $44 billion buying power will say a lot about what’s important to them. Marketers ought to be looking at cross-channel approaches that emphasize the authenticity of their product – particularly when it can encourage Generation Z to get involved and make a difference.
Q: Is there a generally accepted definition of the age range encompassing the Generation Z segment?
A: Most demographers and researchers typically use starting birth years that range from the mid-1990s to early 2000s, and as of yet there is little consensus about ending birth years.
Q: Eating behaviors can be challenging to change once they are engrained. It is one argument for trying to catch impressionable, young kids when their taste buds and eating habits are still being formulated… What are your thoughts here?
A: I agree wholeheartedly! Parents play the biggest role in establishing the eating preferences of their children. However, the biggest challenge occurs when children become ‘digital natives’, and are lured away from healthy food by the processed food industry. Budgets in the energy drink and candy segments, for example, are comparable with the annual turnover of a large fresh produce company. I am a firm believer that the fresh produce industry needs to change its marketing tactics and style completely if we are to have any hope of securing young consumers as loyal buyers.
Q: Can you tell us more about your own Gen Z research? Did you have a hypothesis going into it, and did the results mirror that hypothesis? Is this ongoing research? Have you learned more insights following your initial findings?
A: Our hypothesis was that we already had all the answers; we just did not know the questions which Generation Z wanted to have answered! The results indeed showed that Cool Fresh is perfectly positioned to play a leading role in developing Gen Z-style marketing. The research is ongoing, but now more from the perspective of testing our ideas with the target group.
Q: So, what were the biggest discoveries? Did you come up with the questions Gen Z wanted answered?
A: We found a number of crucial aspects, which we are now using in our marketing:
· 87% of the participants in our focus groups stated that companies (such as Cool Fresh) have a big role to play in making the world a better place.
· 67% said that companies should focus on the well-being and “upliftment” of people.
· 25% said that the environment should be cared for by companies. Also, the story or ethics behind a brand is very important.
In terms of advertising, Gen Z gave us five crucial instructions:
1) ‘Don’t be scared, we want to consume your advertising.’
2) ‘Be relevant to our lifestyle.’
3) ‘Don’t treat us like fools – we understand that you are trying to sell us something.’
4) ‘Don’t bore us – we prefer advertising which makes us laugh.’
5) ‘Don’t think advertising – we want to be entertained!’
Q: You ascribe universal traits to Gen Z. Couldn’t there be significant differences or a range of nuances based on ages within Gen Z, and/or related to cultural variances within countries, etc.?
A: There is no conclusive academic research on this. Our gutfeel and limited research numbers give us the feeling that Gen Z consumers have universal traits. They have an attitude and they crave adventure. ‘We want it all and we want it now’, whether they live in Montenegro or Miami, Alabama or Australia.
Q: How are you capitalizing on your Gen Z research? Could you talk about the marketing strategies that work and ways you are employing these strategies.
A: We are primarily using it to restyle our own advertising and concepts. What we are seeing is that also the ‘grey suits’ (people with conservative attitudes) are tickled by our audacity in discarding convention and opting for an ‘in your face’ advertising approach. An example can be found in the advertisement which we placed in the LPS program guide/catalogue.
Q: That’s quite a departure from traditional produce marketing… What are some of the misconceptions about reaching Gen Z’s? Do you have examples of campaigns that have gone awry?
A: The biggest misconception is that a company can ‘learn the language’ of Generation Z. What we did is to use Generation Z to design the first campaigns, instead of us trying to do it.
The Dutch railways learned the hard way. When they first targeted Gen Z via social media, they had ‘old’ marketers running the conversations. Their people tried their best to ‘be cool’, and Generation Z literally gave the railways a bashing. They then changed over to younger campaign teams, and today Dutch railways are having really cool conversations with their younger consumers.
Q: Produce industry executives often argue that making meaningful changes in produce consumption involves multi-faceted, long-term strategies. For instance, a cartoon character on a package of fruit might capture a child’s attention at the point of sale, but could be short-lived, especially since that package of fruit is competing with a plethora of eye-appealing junk food. Could you discuss this issue?
A: This is exactly where the fresh produce industry needs to change. No more drawn-out, multi-faceted, long-term strategies. Generation Z and Generation Alpha require short, fast, quirky, adventurous campaigns.
Q: So, Generation Alpha is the catch phrase for those younger than Generation Z…
A: I also believe that while a child may be drawn to a cartoon character on a package of fruit, in the end the parent decides whether to buy or not (and to keep on buying or not). In Cool Fresh’s perspective, our strategy is now to lock Gen Z into our brands and stories, so that when they become parents the decision to buy fresh produce comes from the parents, and not the children.
Q: Is a truly successful approach to increase produce consumption in children dependent on integrating the messaging across multiple paths; in school curriculums, after school programs, through parents at home, in supermarkets, food service operators, on TV, social media, etc.? And how does this apply to reaching Gen Z?
A: Short answer — for a commercial company like Cool Fresh the only way is to target Generation Z and Generation Alpha through social media. The rest are all budget-slurping and non-effective vehicles.
Q: With that in mind, what advice do you have for suppliers, for produce organizations, for retailers, for food service operators, etc.?
A: The greatest challenge for each of these players is to get out of their individual and collective boxes. Stop focusing on ‘health and nutrition’ and start focusing on ‘attitude and adventure’.
Q: What are the most important takeaways for London attendees when they head back to their offices?
A: I would suggest that each company should go back home, and find and employ a 16 year-old marketing consultant! Better still establish an advisory panel consisting of a couple of youngsters between 12 and 18 years of age to drive the advertising strategies.
Nic Jooste’s talks are always filled with innovative marketing insight. Though we are as focused on marketing as anyone in produce, we wonder if the produce industry isn’t avoiding facing some tough problems in hoping that better marketing will solve its consumption problems. We are drawn to this quote from Nic’s Interview:
“Parents play the biggest role in establishing the eating preferences of their children. However, the biggest challenge occurs when children become ‘digital natives’, and are lured away from healthy food by the processed food industry. Budgets in the energy drink and candy segments, for example, are comparable with the annual turnover of a large fresh produce company. I am a firm believer that the fresh produce industry needs to change its marketing tactics and style completely if we are to have any hope of securing young consumers as loyal buyers.”
Whatever Red Bull or for that matter Coca-Cola or Nestle may spend on marketing, this much is certain, they market a product of consistent quality. The Junior pundit Primo, aka William, was only three years old when we wrote a piece titled Little Taste Bud that detailed his love for blueberries and how frequently he spit them out due to their bitterness. In Pundit headquarters in Boca Raton, Florida we receive twice weekly fruit deliveries, for the last two months these have included peaches and nectarines which were basically inedible. As we travel around the world we often see beautiful breakfast buffets at the world’s finest hotels, yet they feature melon that is often flavorless.
Marketing is a powerful tool, but it is a double edged sword. If the Four Seasons or Ritz-Carlton or Peninsula or Mandarin Oriental hotels sell luxury and glamour and relaxation — the marketing can be very successful at attracting people to the hotels and resorts. And if the lodgings deliver on the promise made by the marketing, the marketing has a multiplying effect, as people tell friends and loved ones and the hotels fill across the globe. But if the product breaks the promise, the rooms are dirty and the service curt, the locale not as represented in the ads, well then the effect of not delivering on the branding promise is multiplied as well.
One reason the various schemes that trade associations and government bodies have put together to promote produce consumption have failed is that not a one of these programs was willing to offend any producers and demand quality and taste standards for participation.
So we can’t wait to hear Nic Jooste’s presentation, we want to know both how to turn on Generation Z with brand promises that matter — and how to retain their allegiance by consistently deliverg on those promises.
Come join us at The London Produce show and conference to work this all oyut. You can register here.
Let us know if you need a hotel room here
And general information about the event si available here.
See you at The London produce show and Conference 2017
Cornell's Brad Rickard is among the brightest young scholars in the world of food and agriculture writing, researching and teaching today, so when we heard he was doing his sabbatical in France, it was an easy decision to try to woo him to The London Produce Show and Conference. After all his research and intellect have bedazzled audiences on both sides of the pond with presentations we memorialized in pieces such as these:
Can Labeling Impact Food Waste?
Is Zero Waste The Optimal Standard?
Cornell’s Brad Rickard To Present New Research At The London Produce Show And Conference
What’s in A Word? Sell By, Use By, Best By And Fresh By.. Can A Word Alter Food Waste Significantly? Cornell’s Brad Rickard Speaks Out
Cornell’s Brad Rickard Returns To The New York Produce Show And Conference: Will 'GMO Free' Be The New Organic?
What’s In A Name? Professor Brad Rickard Of Cornell Produces New Research That Indicates Shakespeare May Have Been In Error… On Apples At Least
Cornell’s Brad Rickard To Unveil Generic Produce Promotion Research Done By Cornell And Arizona State University At New York Produce Show And Conference
To find out what he has in store for us in London we asked Jodean Robbins, Contributing Editor at Pundit sister publication, PRODUCE BUSINESS to find out more:
Associate Professor of
Applied Economics and Management at
Ithaca, New York
currently a visiting scholar at
KEDGE Business School
Q: What will you be presenting at the London Produce Show and why is it compelling for attendees?
A: We have access to, and analysis of, new research examining consumer purchase trends for packaged fruits and vegetables. I will be discussing some of the results from this data and how it reveals the evolution of the packaged fruit and vegetable segment. There is definitely increasing interest in this particular segment of produce — both at retail and supply level. It’s a growing phenomena.
Yet, while we see growing interest in these products, we also see apprehension about how big or sustainable this segment could be. Is it still a growing trend or is it capping out? Not all consumers purchase these products. So our goal was to help identify who the consumers are and what the evolution of the demand is for these products.
Q: How are you actually able to identify this evolution?
A: We have access to a huge database from Nielsen that tracks household survey data as well as retail scanner data. This data is not publically available, but through an agreement Cornell has with the University of Chicago we now have access to both of these data segments from 2005 through 2015.
Many people are familiar with Nielsen’s retail scanner data, tracking what is sold through the store, but a unique component of this project is the household survey data that tracks what households are actually purchasing. It's a lot of very interesting and powerful data. It allows us to explore pertinent questions about the packaged produce segment.
Q: What does the household survey actually cover?
A: The defining factor is that the produce item has a UPC code. The survey includes approximately 60,000 to 80,000 U.S. households. Some of these households have been in the survey the whole time, so we can track the same household for the entire 10 years to see how they change. But, we also have some matching procedures to be able to match similar households that have been in the survey during different timeframes. The bottom line is it gives us unprecedented access to this type of information about what households are buying over a ten-year period.
Q: What does all this data translate into from an industry perspective?
A: We’re trying to offer answers to top-of-mind questions people are asking today as well as provoke thinking for the future — both for companies who are already doing packaged fruits and vegetables and for those who are thinking of getting into it. We are looking at who is buying what, where are they located, what type of consumer they are. Our primary interest is in how consumers and purchasing of these products are evolving and what that might indicate for the future of this segment.
Q: What will you specifically be talking about in London?
A: At the show, I’ll be looking at three different angles. First is Quantity — looking at how the quantity of these items is trending over the time period and how that reflects the overall trend in packaged produce. I’ll present data on the types of households and the quantity of packaged produce they’re purchasing including total quantity, quantity as a share of total grocery spending, and as a share of fresh food products.
We will look at this from different perspectives, including how it changes over time and how it changes among households of different geographic locations or socio-economic groups. The data provides a lot of other information about these participating households, including income, education, how many TVs they have, and age of children, so we can run different data sets to look for specific trends and demographics.
The data can be broken down into categories as well, for example, citrus, stone fruits, or leafy greens, so we can also look at commodity-specific trends — as long as it was sold via a UPC.
Q: Is this quantity-focus the bulk of your presentation?
A: No, we will also be looking at Value and Diversity. We will explore the value of this segment over different geographic locations and other demographic factors. The data sometimes tells a different story of how value changes that isn’t always captured when looking at quantity. The third focus, Diversity, may be the most interesting and useful part of this entire exercise.
Q: What do you mean by diversity and why do you consider it so useful?
A: By diversity, we mean the variety of products households are buying within this packaged produce category. We look within the consumers’ basket to determine how much diversity or breadth we see them consuming. We want to know how curious consumers are about these products. Are they buying just one bagged salad and sticking with that? Or are they starting with one and then expanding into other products or presentations?
Q: So, it’s about determining if consumers are growing or evolving with these products?
A: Yes, we want to see how this trend changes over time and where the nucleus of the activity is. Which households have the greatest diversity patterns and which have the propensity to increase their diversity over time? Who are the people most likely to broaden their packaged produce basket? Where is it starting and how is it growing? The focus is on the evolution of the customers and their demand for products. We want to determine if someone at the start of their shopping experience is more exploratory — maybe someone who is younger and starting the shopping career versus an older more established consumer. What is the difference in their behaviors?
Q: Will this be academic number-crunching or is it a more real-world presentation?
A: This very compelling data set allows us to say some very interesting things about the trends the data implies. There is some very practical immediate-use information we will share. However, there is also a lot of information that will help companies set up strategies for the future. This presentation will be especially useful for people looking at how they grow strategically in this industry.
Brad Rickard is the Ruth and William Morgan Associate Professor of Applied Economics and Management at Cornell University in Ithaca, New York. He grew up on a 1200-acre family farm in Canada that produced apples and processing vegetables.
His teaching and research focus in on the economic implications of policies, innovation, and industry-led initiatives in food and beverage markets. Results from his research have been highlighted by various media outlets, including Buffalo News, The Economist, Freakonomics.com, National Public Radio, The Wall Street Journal, Washington Post, and Wine Spectator, Professor Rickard is currently a visiting scholar for the 2016-17 academic year at KEDGE Business School in Bordeaux, France.
The issue of packaging and produce is an especially important one for an American speaking in London. At the major chains in the UK, almost all produce is packaged. In America, though packaging is increasing in usage, most produce is still displayed in bulk, farmstand style.
From the opportunity for branding to the sanitary nature of it, the advantages of packaging are clear. Yet the bulk farmstead-style display has its appeal.
What ways can packaging best be used whole the department still avoidslosing its fresh appeal. We know in the short term at least that consumers tend to look for what they are familiar with, sowhen Tesco came to America as Fresh & Easy, its produce packaging was not successful. Consumers objected on environmental grounds and the compulsion to buy minimum quantities — but, mostly, to an American, it just didn't look fresh.
Would British consumers buy more fresh produce long term if it was sold bulk? Would Americans buy more if they got used to packaging? Can brands such as Driscoll's be built on the ubiquity of their clamshells? Come see Professor Rickard at The London Produce Show and Conference and join the spirited discussion on matters such as these and learn from new research that points to new answers.
You can learn more about the show here.
If you want a hotel room then let us know your needs here.
And you can register right now online right here.
Clive Black’s romance with food started in the 1980s when he studied corporate strategy in the Northern Ireland food industry for his Ph.D. at The Queen’s University of Belfast. Black, grew up in Coleraine, Northern Island, where the smell of the countryside remains a poignant memory, and since 2003 has been head of research at London, UK-based Shore Capital Group Limited, likes to tell it this way: “this was a time when the scene was filled with agriculturalists who couldn’t spell food, in a time when the consumer was coming to the fore of the farming industry’s mind.”
Consider that the 1980s was the decade that Bovine Spongiform Encephalopathy (BSE) or ‘mad cow disease’ started its epidemic rise and former British MP Edwina Currie resigned over a misspoken warning over salmonella in British eggs. Both topics made national and international media headlines.
Pundit readers may have first read of Black last year. This is when the researcher, who is one of the UK’s top consumer analysts and rated No. 1 for retail in the 2014 Thomson Extel survey, was quoted in the June 2016 print issue of Produce Business UK Guide, The UK Grocery Retail Market, distributed at last year’s London Produce Show.
In the article, Turn & Face the Change, Black commented on the challenging changes going on in the retail industry driven by today’s consumer shifts in shopping habits. You can read the article here, starting on page 10:
This week, Black, as well as Chris Cowan, consumer insight director at Kantar Worldpanel UK, and Jan England, managing director of England Marketing Limited, will be panelists at the London Produce Show’s Retail Panel Discussion: The Future of the Retail Environment. The panel will be moderated by Claire Powell, former Retail Operations Manager of fresh produce at Sainsbury’s, one of the UK’s leading retailers.
To give Pundit readers a preview, Carol Bareuther, RD, contributing editor of the Pundit’s sister publication, Produce Business, talked with Black about his research over the past year and discussed views on how subjects such as the rise of online retailing, price consciousness in consumers and political climate will affect the UK’s fresh produce industry.
Head of Research
Shore Capital Group Limited
Q. Let’s start with last September, when you were the key speaker at the Appetite for Growth Conference, organized by the Northern Ireland Food and Drink Association. In your presentation, you provided the intriguing statistic that over 1 in 10 shoppers (10 to 12 percent) will shop online for groceries by 2025. What do you think this will mean to brick-and-mortar retailers?
A: Online will continue to gain share in the UK grocery market, but it will perhaps be on a more rational basis for the participants going forward as the last mile is very costly. Online grocery remains the preserve of the wealthier, whilst changing lifestyles often work against mainstream online; eat for today, for example. All eyes will remain on Amazon, which can be expected to nudge ahead, as its one-hour fresh food service perhaps bridges the convenience/online conundrum. For store-based retailers, online remains an opportunity and a constraint. Focus will remain on improving the operating models, so lowering costs, while remembering that the incumbent store players still dominate the market.
Q. More importantly for our audience, what is your advice to suppliers to be ready to best capitalize on the online shopping sector?
A. This is a big question. In short, understand the shopping behaviors of the generations and how to market to those shopping in their late teens and early twenties; that is ultimately the future.
Q. Also in your Appetite for Growth Conference presentation, you mention that price-consciousness has moved up on the customers’ agenda, yet at the same time affordable treats are important. What implications does this have going forward for high volume buyers and sellers of fresh produce?
A. Value is here to stay with the discounters embedded into the UK retail scene. However, price value does not mean the absence of fun, value-added, the virtues of provenance and so forth. High volume sellers of fresh produce will have to keep operating costs, efficiencies and scale benefits to the fore of their minds…
Q. Carrying the price theme forward once more, how is and will deflation and a climate of retail cost-cutting and price-promotions affect food suppliers’ ability to be creative and innovate?
A: We are moving into an inflationary climate from deflation where promotions often rise, not fall. However, over-promotion was a feature of the last economic cycle and so things may be different this time. Accordingly, simplification and base case price with the cost points in tow above are likely to be key.
Q. Is there any room in the budget left for suppliers to educate consumers about their products and collaborate with retailers in selling strategies? What are your thoughts?
A. Margins are likely to remain tight but health and well-being is a key growth trend in food markets that the fresh produce segment should nurture, capture and benefit from.
Q. Changing topics, in a 2016 article you wrote for The Grocer on the 2016 winners and losers of British grocery, you reference the big political changes seen in the UK and elsewhere in 2016. How will the current political environment — Brexit if you will — affect the food chain, especially with reference to cost of goods, ongoing consumer behavior and supply of labor?
A. Uncertainty prevails. One of the days that the London Produce Show takes place is a surprise UK General Election day. Expect more uncertainty to come. No one knows what Brexit will bring… no one. For the trade, it brings opportunities — import substitution, export abilities, and constraints — such as the security of labor supply.
Note that no one is suggesting that the UK will ban migrant workers. Unfortunately, all firms will have to work through the ebbing and flowing scene and make decisions accordingly.
Q. What will this changing political landscape mean for suppliers going forward?
A. Currency will be the key arbiter of the emerging geo-economy. If we bungle Brexit, then the British Pound will fall and labor may be a whole lot more available in the UK.
Q. Moving ahead to research from earlier this year, in the Shore Capital and EFFP Agri-Food Outlook: Spring 2017 you speak about a rebalancing of the UK economy in the wake of Brexit. What are the advantages and challenges of this rebalancing for fresh produce suppliers currently and in the future?
A. Rebalancing will bring greater access to the best young British talent who will not just be absorbed by the City of London, as an example. The food industry, in general, should like all industries and regions, benefit in time from a less financial services and south-east political class.
Q. Lastly, regarding your being a panelist at the London Produce Show, what is a question you would really like to be asked by the audience — and what would the answer be?
A. I’ll leave that one to your imagination.
It was no less spirited a grower and capitalist than John Shropshire who introduced the Pundit to the wisdom of Clive BLack and in his interview he expresses the wisdom communicated by a quote varyingly attributed to Bernard Baruch or J.P. Morgan — when the great depression hit and the stock market collapsed shouting newspaper reporters are said to have asked one of these spirited capitalists "What is going to happen with the stock market?" The response: "It shall fluctuate"
Come join us at The London Produce Show and Conference and learn the form these fluctuation of markets and commerce actually take. You can register here.
If you need a hotel room, end us your specifications here.
We look forward to a robust discussion at the LPS2017!
Chris Cowan admits he doesn’t have a green thumb. However, he does enjoy dining on farm fresh produce and mining data to translate consumer purchase behavior into a competitive advantage for his clients. The latter is a great combination considering that for the past three years, Cowan has held the position of Consumer Insight Director at London-based Kantar Worldpanel UK, which has the UK’s largest consumer panel, comprised of 30,000 households.
The roots to Cowan’s current position started when he left Kantar’s sales division and joined its produce team. It was then, he says, he “met some interesting characters and was instantly hooked on the quirks and fun of working in the produce industry.”
Today, Cowan works with over 60 of the UK’s leading retail suppliers, ranging from multinationals to mid-sized family businesses, and gains a unique view as to how each operates, innovates and the challenges posed to these suppliers by retailers. Interestingly, as Cowan says, while two companies may supply the same specification of product to the same retailer, the questions posed by each to Cowan at Kantar are very different.
When he attended the first London Produce Show, Cowan says his network expanded to an international one and his work became even more fun. This, coupled with the fast pace needed to work with products with a short shelf life, is what Cowan says gets him out of bed each morning, into the office and crunching the numbers.
Pundit readers were first introduced to Cowan in November 2014, in the article, Kantar Worldpanel Execs Present Produce Case Studies Demonstrating Power of Data At the Global Trade Symposium Co-Located with the New York Produce Show and Conference. Here, he discussed decision-making by gut versus by data and provided several examples of why the latter is often best when a market is in flux. Then, the Pundit article,London Produce Show and Conference About to Commence, Brings Together Industry in Dialog, Highlight on Key Trends and Topics, previewed Cowan’s presentation, Working Together to Tackle Deflation. At the same time, the Pundit’s sister publication, Produce Business UK, published an interview piece titled, Kantar Worldpanel UK Warns of Lost Sales Value for UK fresh Produce, which profiles Cowan’s take on why fresh produce businesses should take note of the deflationary climate and ensure they truly understand their product and market.
This week, Cowan, as well as, Clive Black, Ph.D., head of research at London, UK-based Shore Capital Group Limited, and Jan England, managing director of England Marketing Limited, will be panelists at the London Produce Show’s Retail Panel Discussion: The Future of the Retail Environment. The panel will be moderated by Claire Powell, former Retail Operations Manager of fresh produce at Sainsbury’s, one of the UK’s leading retailers.
Consumer Insight Director
Kantar Worldpanel UK
Q. Let’s start out two years ago when you spoke at the London Produce Show about deflation. Could you recap what you’ve seen as the impact of deflation in the UK on the fresh produce sector since then?
A. Price is a big topic within the UK grocery market at the moment, and grocery inflation has hit 2.9 percent in the 12 weeks ending May 21, 2017. This means that the average household has spent an extra £27 on their groceries. However, encouragingly, we’re seeing produce volumes rise by about 2 percent in this time against a year ago.
Q. What has this meant to retailers and suppliers of fresh produce?
A. Being a bit of a data geek, I’ve looked extensively at the impact of changing price per kilo on produce categories, which allows me to also see the impact of changing pack size. In short, most produce categories that have increased their prices through 2016 have actually grown sales. It’s when categories lower their prices that the chances of success fall to about 50:50. Given that so many external factors affect shopper demand in produce — weather, availability in store, promotions on other categories as well as the habitual shopping behavior of many categories — it’s clear that price isn’t always the key consideration.
Q. What was your biggest take-home message from your 2015 London Produce Show and now, two years later, how would you update this message based on more recent research?
A. Back in 2015, there were supply issues helping prices come down, such as a stronger pound and good yields in certain categories as well as retailer-led price reductions. However, the shopper reaction was largely to continue as before which could actually hurt categories. Fast forward to 2017, and we’re in a period of inflation within the produce category but, encouragingly, we’re seeing more volume being purchased. For me, what has changed — and where the big winners will be – is in understanding how habitual and automatic people’s shopping behaviours are in produce. If shoppers are relatively automatic, then playing around with price will have little effect on their purchasing but, if their demand is strongly linked to price, then it’s more of a balancing tightrope act.
Q. Following up on this, in the 2015-published article in Produce Business UK, you’ve mentioned supplier responses to deflation are in three areas: 1) production efficiencies, 2) move into new areas like prepared meals and fresh to frozen, 3) consumer-centric rather than grower-centric strategies or really trying to get to know what customers want. Two years later, what have been the implications of these responses for suppliers, the supply chain and retailers?
A. I can’t comment on the production efficiencies, nor the specifics in which clients have looked. However, we have seen a real shift in demand across both fruit and vegetable suppliers in understanding their shoppers to an unprecedented level. Subtle changes in people’s shopping and consumption habits can lead to multimillion pound opportunities for retailers and suppliers.
Q. Can you offer an example?
A. One case of where this has worked to great effect is the berry category — specifically blueberries, where better year-round supply, combined with a compelling retail offer, effective communication on uses of this fruit and a reason to purchase, has helped make the berry category the largest category within produce at £1.21bn in the latest year — up 27 percent since 2015
Q. In the future, do you see discount formats continuing to lead?
A. We’ve seen that Aldi and Lidl have both made commitments to invest in new store openings, which will help them to continue the strong performance they’ve achieved. Their growth at a total grocery level in the latest quarter was the fastest we’ve seen since 2015. These two retailers now represent 12 percent of the British grocery market. However, we’ve also seen the main estate performing well for the major retailers, up 2 percent this year.
Q. Moving forward, will superstores like Aldi and Lidl continue to grow or will other types of formats emerge and overtake – and what does this mean for suppliers?
A. Going forward, I’d expect the continued evolution of the established retailers, investing in their own brand ranges, varieties available and in store experience. In any case, many suppliers work with numerous retailers, so they will also be aware of one channel winning at the expense of others. It may sound a touch idealistic but, for the continued success of produce, it’s about driving additional demand for categories by appealing to shoppers and consumers as to why the products deserve their spend.
Q. An interesting point you made in the article, Produce Central to Retail Growth, in the 2016 Produce Business UK Guide, published in June for the London Produce Show, is that Potatoes, Berries and Apples are leading categories, and that through a collaborative approach to finding the right price, other categories can become big sellers too. Could you give an example of the type of collaboration it takes to do this? Also, you give avocados as a good example of an item that has turned around.
A. Avocados are a particular favorite of mine, not just because I eat them but because it’s a great tale of the supply and demand sides working so well together. Avocados grew from £55m in 2013 to £164m in 2017 by attracting more shoppers to buy more often. Undoubtedly, the advances in delivering more ripe-and-ready avocados and the positive press they’ve received have helped, but why do I hold the avocado example so highly? Well, the category has managed to utilize social media, especially Instagram, to help drive demand at breakfast. The upshot? Over the past 4 years, avocadoes eaten at breakfast have grown 8-fold and an extra 18m consumer occasions.
Q. What do you feel are the next produce categories poised to make this leap?
A. That’s the million-dollar question. For me, it’s got to have a broad shopper base already (ideally 10 percent of the UK population buying into it over the year) and also a relatively low frequency. In terms of supply, it could be a seasonal market but, with expected demand growing quickly, sourcing will be key to help maintain interest in the category as it transitions from infrequent to nearly habitual/regular. Finally, and this is key, we need a reason to love it, and not because it’s cheap! For me, this sweet spot is where the next avocado/blueberry can lie.
Q. Lastly, if you could wave a wand like Harry Potter and change the direction of the force of factors affecting the fresh produce industry in the UK today – what would it be?
A. I’d want to see people working to engage shoppers more with produce. Not on every shopping trip, but take a step back next time you’re in any retailer’s produce fixture. Look around. It’s such a wealth of exciting, emotive reasons to buy that as soon as you head to one of the packaged groceries aisles, it’s lost. We know health is a rising driver of purchasing, and there’s a wealth of opportunity for produce to capitalize on, rather than simply making the categories cheap.
There are three issues Chris raises that are, indeed, food for thought:
First, he reminds us reducing prices often does not lead to increased sales:
“In short, most produce categories that have increased their prices through 2016 have actually grown sales. It’s when categories lower their prices that the chances of success fall to about 50:50.”
If you cut prices by 50% you have to increase volume by 100% just to be equal in monetary sales.
Second, he points out that in order for sales of an item to increase, you need people to eat it more frequently:
“Avocados are a particular favorite of mine, not just because I eat them but because it’s a great tale of the supply and demand sides working so well together. Avocados grew from £55m in 2013 to £164m in 2017 by attracting more shoppers to buy more often. Undoubtedly, the advances in delivering more ripe-and-ready avocados and the positive press they’ve received have helped, but why do I hold the avocado example so highly? Well, the category has managed to utilize social media, especially Instagram, to help drive demand at breakfast. The upshot? Over the past 4 years, avocadoes eaten at breakfast have grown 8-fold and an extra 18m consumer occasions.”
Note though that this boom for a particular item does NOT imply greater overall consumption of fresh produce. If the boom is caused by people abandoning the traditional English breakfast to eat Avocado Toast, then the win for avocados is at the cost of tomatoes and mushrooms.
Third, he identifies the prerequisites for a category to boom:
“…it’s got to have a broad shopper base already (ideally 10 percent of the UK population buying into it over the year) and also a relatively low frequency. In terms of supply, it could be a seasonal market but, with expected demand growing quickly, sourcing will be key to help maintain interest in the category as it transitions from infrequent to nearly habitual/regular. Finally, and this is key, we need a reason to love it, and not because it’s cheap! For me, this sweet spot is where the next avocado/blueberry can lie.”
This suggests that the search is not so much for completely new items but for something, such as a health report or effective marketing, that can make demand for a known item jump. Though, again, this speaks to growth in an individual category — not in overall consumption.
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Dr. Roberta Cook, on the slate for the London Produce Show, is among the foremost authorities on produce trends around the globe. She remains a coveted catch for any conference. Previous presentations at the New York Produce Show and the London Produce Show have stimulated thought and discussion on a wide range of topics including:
Will Amazon Outgrow Tesco And Carrefour? Dr. Roberta Cook Will Present Comprehensive Data And Analyze Worldwide Retail And Produce Trends All At The London Produce Show And Conference
The Intersection Of Technology And Trade: At Global Trade Symposium Roberta Cook Of UC Davis Talks About Mexico’s Broadening Role In A Diversified Global Market
Dr. Roberta Cook Will Talk About Increasing Produce Consumption At Global Trade Symposium
Riding The Roller Coaster: Roberta Cook Of UC Davis Explains How Economic Fluctuations Create Marketing Opportunities.
We spent some time with her to find out what’s been happening since her last interview and to get a sneak preview of what she’ll share in London.
Roberta Cook, PhD
Founder, Fresh Produce Marketing Consulting, in Dixon, CA
and retired Cooperative Extension Marketing Economist
Department of Agricultural and
University of California, Davis
Q: The last time the Pundit spoke with you, you were preparing for your talk at the 2015 New York Produce Show Global Trade Symposium about the impending Trans-Pacific Partnership (TPP). What has happened since in that arena, especially with the U.S. presidential election?
A: When I spoke the last time in New York, everyone anticipated the TPP would be approved by the U.S. Of course, now we know that is not the case. One of my points in that presentation was how the U.S. lags behind other countries in terms of free trade agreements. In 1994, when NAFTA began, there were about 40 preferential agreements in the world yet the U.S. only had one with Israel. By the end of 2015, there were about 260 in the world and the U.S. was party to 20.
We really haven’t progressed as rapidly as other countries since then in terms of obtaining new trade agreements. With specific respect to the TPP, it’s unfortunate that, though some countries still approved it, others have decided to pursue bilateral agreements with China.
One of the major attractions of the TPP for many countries was the leadership role of the U.S. in the agreement, which obviously now it doesn’t have. We’ve missed this opportunity and now China is pursuing that role of leadership in the Pacific region. We’ve left a vacuum there, and other countries are re-evaluating their trading relationships in light of this.
Q: There seems to be a political trend of protectionism starting in many areas. Does Britain’s exit from the E.U. and other political issues in Europe signal a move against free trade for that region as well?
A: I don’t think so. Angela Merkel is extremely pro-trade and has stated though trade has been controversial at times within the European political landscape, it is still an important asset to their economies. It seems they’ve been able to help their populations understand the benefits of free trade. Also, the recent election in France, where the extreme nationalist candidate was defeated, seems to point to a Europe still actively engaged in free trade.
Another crucial aspect beyond looking at Europe or the U.S. is how interwoven these trade agreements and relationships are. It’s not just about bilateral benefits. For example, there’s a lot of talk about how a major concern with NAFTA is the whole labor/social responsibility area, and the environment. However, if the U.S. president had signed the TPP, those concerns would have been addressed. That agreement contains significant provisions in the labor and environmental arenas, and would have addressed any concerns with Mexico because Mexico is part of the TPP. In fact, if you talk to people in Mexico, they have been very concerned and involved in making sure their practices are in line with what the TPP would require.
Q: Let’s switch gears for a minute and talk about you. You are now retired from academic life. So, what have you been up to?
A: Yes, I retired officially from the University of California on July 1, 2016. However, I’ve kept busy with consulting work and speaking. Two quite important things I remain active in are service on the Village Farms Board of Directors and Ocean Mist Farms Board of Directors. I’ve been on those boards for some time, and I am very involved. I continue to give presentations to industry groups and spend a lot of time researching and preparing for these.
I’m constantly developing new topics. One of the things I'm involved in now is the hothouse vegetable industry and how it’s changing the panorama of the open field industry – especially as led by tomatoes. Tomatoes represent one of the biggest fresh produce crops we grow in the U.S., as well as in all three North American countries (Canada, Mexico and the U.S.). There are many changes and trends happening in this sector, driven primarily by the protected agriculture industry. I’m extremely interested in analyzing their interplay.
I also continue to look at broad fresh produce trends and what’s happening in terms of retail consoldiation. I spoke about this topic the last time I spoke in London. Our industry is so dynamic and there are so many things changing and impacting fresh produce demand and supply — whether it is product development, technology or trade. You really need to be working every day to stay current on this myriad of issues.
Q: Speaking of retail consolidation, can you give us some insight on what’s happening in that area? It seems more and more European retailers are claiming a greater stake in the U.S. market.
A: We’ve seen aggressive moves by European chains. Aldi has been and will continue to make significant inroads in the U.S. market. And most people believe Lidl’s entry will be even more dramatic. We see more retail chains, including Kroger, investing in price to be competitive with retailers such as Aldi. Walmart already has stores in test markets to compete with Aldi and also in anticipation of Lidl entering their market. Most retailers expect a significant impact — that means lower prices for all.
One of my messages to growers is that it’s going to get worse as far as pricing pressure goes. In 2008, when we entered the recession, we saw significant margin pressure shifted downstream to growers and that trend has continued. Even though we came out of the recession some time ago, the trend is still with us due to ongoing retail consolidation and the market entrance of these value-driven chains.
Aldi already has 1,600 stores in the U.S., and its internal studies show its prices are 21 percent lower than its lowest price rival — including Walmart. Aldi expects to expand and remodel 1,300 stores and open 400 new stores by 2018 - mainly in Florida, Texas and on both coasts. This highlights how aggressive these strategies are. In the U.S., 18 retailers have gone bankrupt since 2014. It is a very challenging retail environment.
Q: Last time you spoke at the London Produce Show, you talked about such retail trends. What will your presentation in London this year focus on?
A: This time I want to highlight the changing trade landscape in the U.S. and draw out a particular example of being on the frontline of this — the Hothouse Veg Industry. I’ll be speaking about how The North American Hothouse Vegetable Industry is in the Firing Line for Trade Disputes. We have this new trade context evolving with the NAFTA renegotiation. I want attendees to understand the current trade environment for fresh produce and the key roles Mexico and Canada play, and to think about how the NAFTA renegotiation could affect markets.
I’ve put together a comprehensive set of current trade stats to show the volume of produce moving between the three countries and illustrate each country’s role — particularly in fresh vegetable trade. Currently, the U.S. imports 69% of its fresh vegetable from Mexico, 16% from Canada and only 15% from other countries. Fresh fruit imports are more diverse, with 44% from Mexico, only 2% from Canada and 54% from other countries. As far as U.S. exports go, 74% of U.S. fresh veg exports go to Canada, 4% to Mexico, and 22% goes to other countries; 36% of U.S. fresh fruit exports go to Canada with 11% destined for Mexico, and 53% to other countries.
Trade has grown rapidly between all countries with which the U.S. has Free Trade Agreements, led by Canada and Mexico. The renegotiation of NAFTA could have a major impact on fresh produce trade within the North American region and elsewhere. It could result in growers seeking to send products to other countries and thus affect markets worldwide. It could also impact U.S. trade policies and tariffs with respect to other regions.
Q: So, why focus on vegetable trade as opposed to other commodities that might be affected by a NAFTA renegotiation?
A: Clearly, as demonstrated by the above statistics, most fresh veg trade is intra-NAFTA, hence, renegotiation has significant potential implications for this large sector, accounting for billions of dollars in trade. Secondly, I believe hothouse or protected culture (PC) items may be the most contentious of the products — led by tomatoes, but also including peppers and cucumbers. All three of these products have high import shares in the U.S. market.
Tomatoes have long represented Mexico’s Number One fresh produce export, regardless of how they have been grown. Tomatoes also have a long history of trade disputes between the U.S. and Mexico. Currently, tomato trade operates under a suspension agreement, which suspends a dumping suit submitted by U.S. growers against Mexico. The parties came to a negotiated agreement to “suspend” the suit based on agreed-upon terms establishing minimum pricing for imports into the U.S. This has relieved price pressure on U.S. growers.
Mexico’s competitiveness in tomatoes and other hothouse crops is a result of its application of technology, i.e., the protected culture/ag sector. The Mexican industry has evolved over the years from open field to production in shade houses and greenhouses. The field cucumber, tomato and pepper industries in Mexico have made great strides in moving to protected ag, which has improved their quality and competitiveness compared to the U.S.
In contrast, the Florida tomato industry (the industry that has always led the disputes with Mexico) continues to produce in the open field and harvest mostly mature green tomatoes. The mature green tomato industry (in Florida, California and elsewhere) has lost most of its market share in the U.S. retail market, and now sells mostly to foodservice. The retail share lost by the mature green industry has been replaced primarily by hothouse tomatoes grown in Mexico, followed by the U.S. and Canada. Consumers have voted with their dollars and demonstrated a preference for hothouse tomatoes, despite their typically higher prices.
In contrast, there are other commodities with high import shares but where trade is not contentious, and we wouldn’t expect to see U.S. producers seek protection during the renegotiation of NAFTA — for example, blueberries. Blueberries have a very high import share, but the blueberry industry is highly vertically integrated in terms of the shippers sourcing from growers in various states around the U.S. and other countries, in order to provide year-round supply.
Also, Mexico is only recently emerging as a new producer of blueberries; rather it is Canada and the U.S. that are the main NAFTA players in blueberries. While there could be some contention between Canada and the U.S., the interdependent industry structure should make this less likely. In contrast, open field tomatoes, peppers and cucumbers are mainly produced in Florida in the winter, and the Florida industry has always fought for protection from Mexico. As Mexico has become more competitive in those crops, some say that imports are impacting springtime markets in the Southeast outside of Florida, such as Georgia. This may make imports more contentious.
Q: How does all this shake out from a consumer and overall economic standpoint?
A: Consumers in both countries benefit from having high quality, affordable products. And, economies are most efficient when less competitive industries are not artificially protected. Protectionism only leads to tit-for-tat retaliation impeding overall trade, and both countries lose. This is the danger that hopefully can be avoided as NAFTA is renegotiated.
Mexico also has crops in which it is less competitive. For example, the U.S. exports sizeable volumes of apples, pears and potatoes to Mexico, so during renegotiation, Mexico could seek protectionist measures for those crops. Each country always has some industries that are less competitive, and protecting inefficient industries only leads to consumers having fewer and less affordable products available. To have a successful economy, you want efficient industries, and that's how you generate good wages and employment. Protecting a small number of growers is not beneficial to consumers or the economy as a whole.
Other factors also affect this competitive environment. Growth in consumer demand for fresh produce grown in Mexico is the major contributor to export growth. Exchange rates also play an important role in trade. The Trump anti-NAFTA agenda since last year has caused the Mexican peso to devalue relative to the U.S dollar, making Mexican exports cheaper and more competitive.
Q: I assume, as always, you have a good amount of data to back up what you’re presenting? How will this data help attendees understand the real world?
A: Yes, the data is what drives the presentation. I always analyze a lot of data in order to be able to tell a story of what is actually happening in the marketplace. Without data, it is only opinion. I begin by setting the stage with the volume of imports and exports of fresh produce as a whole as well as the import share for these main products. The data shows imports from Mexico and Canada from before 1993, which was the year before NAFTA was implemented. If you look at total fresh imports and exports, you see how linked we are within the North American region in terms of fresh produce trade.
NAFTA has been positive for all three countries; it has had a very positive effect on consumers and has helped integrate our supply chains to make us more competitive as a region relative to the rest of the world. Any ag economist who looks at NAFTA agrees it has been positive overall — you always have winners and losers, but the gains have far outweighed the losses.
I also have a good deal of data on the North American protected culture (PC) industry. I’ll be providing an overview of the hothouse veg market and looking at trends in demand for the different types of tomatoes as well as cucumbers and peppers. Retail scanner data shows that in 2016, hothouse tomatoes represented 44% of tomatoes sold in quantity and 56% of dollar sales. In contrast, for both cucumbers and bell peppers, the hothouse shares of dollar sales are about 37%.
The retail tomato market is relatively saturated, and there is more upside potential for growth for hothouse bell peppers and cucumbers. They will continue to replace open-field-grown peppers and cucumbers in retail channels. In both instances, the bulk of U.S. consumption of these items originates in Mexico, which has aggressively adopted protected culture.
As far as real-world application, the data documents the picture I paint. If I’m referencing imports increasing in the U.S., we can look at the data to demonstrate how they are increasing. When I show the share of veg exports by country of destination, it will be clear most of the veg trade is with Canada and Mexico. I’m using the graphs and charts to show the changes taking place over time. Anyone who is making decisions relative to what’s happening in the North American market needs this data for a complete picture.
Q: What relevance will this presentation have for attendees in London who hail from Europe or other parts of the world? Why would it be of interest to them since it’s so heavily North American market-oriented?
A: I hope it will be of interest to a broad audience. I get a lot of questions from Europeans about the hothouse sector in North America. For example, I have received calls from big traders in Europe interested in investing in the North American hothouse industry. There is a lot of interest now and a lot of money being invested, in some cases from venture capital - it’s a sexy sector. These potential investors are always seeking more information, and many don’t fully comprehend the complexities of the hothouse sector and the challenges it faces.
Europeans might also be interested in NAFTA trade issues because Mexico and the U.S. are important players in the international trade scenario. If things change within the North American region, it will have implications for other countries whether they’re competitors or potential markets.
Q: You’re covering a lot of information. What do you most want our readers to know about your upcoming London presentation?
A: I want to be clear this isn’t a prediction of what’s going to happen. My objective is to set the stage with the current trade picture and highlight the importance of intra-NAFTA trade in fresh vegetables, in particular. I want attendees to understand Mexico’s major role in the North American fresh produce supply chain, and highlight what’s going on in the hothouse sector. When the negotiators sit down, you never know what will result. Fresh produce will be caught up in the rest of the ag discussions, and we’re just a small part of this larger ag sector. Then you also have ag versus the rest of the sectors of the economy, all competing and jockeying for influence within the overall trade negotiations.
Key to the presentation is how Mexico is legitimately competitive in these products. They’re not gaining because of some unfair advantage. They’ve done a nice job on the technology side and they are producing good quality, affordable products. In many crops, Mexico has permanent climatic advantages relative to the U.S. (due to geography) that are unrelated to trade policy. Likewise, the U.S. has climatic advantages in several crops with large exports to Mexico, such as apples, pears and potatoes, and the U.S. has major climatic advantages relative to Canada across most fresh produce crops.
North American trade is a complex and intertwined issue. It’s not as simple as just accusing one country or another of having an unfair advantage. Even in the case of labor availability and costs, an advantage for Mexico, labor is becoming more challenging there. Mexico is experiencing problems with availability of farm labor now and as a result is starting to bring in workers from Guatemala. Other researchers (Edward Taylor and Diane Charlton from UC Davis) have looked at the rural labor supply in the U.S. and Mexico combined. Basically, the study determines that the supply of rural farm labor is declining in Mexico, and since Mexico has been the primary source of farm labor for the U.S. fresh produce industry, that means both Mexico and the U.S. will have less farm labor available in future.
Wages are rising in Mexico, just as in the U.S. This will be a significant topic for discussion in the near future, and the fresh produce industry must invest much more in labor-saving technologies in order to address this challenge.
Another interesting development in Mexico is the creation of AHIFORES, a group made up of Mexican grower organizations, produce companies and government entities, designed to elevate worker welfare and social responsibility practices.
The group was formed after the scathing L.A. Times article with the intention of ensuring no bad actors tarnish the industry’s reputation. Industry and government came together to collaborate on developing metrics and ensuring laws are adhered to and that workers are treated fairly.
Mexico was already on this path because of TPP. This has a lot of support from both the private sector and the government and is a great example of how an industry can be proactive.
Additionally, we can’t forget that a major factor making this industry so competitive is retail consolidation. Independent of foreign competition, retail consolidation is leading to lower margins for all players, wherever they are located, and regardless of how they’re producing, no one is immune.
All firms must invest more in information technology in order to better manage costs, improve operational efficiencies, and survive on thinner margins. Retail consolidation is incentivizing grower and shipper consolidation as scale becomes ever more important in remaining viable suppliers for larger retailers. The hothouse veg industry is a good example of an industry ripe for consolidation.
One of the reasons for bringing speakers from around the world to each of our events, including The London Produce Show and Conference, is because the world of produce is a seamless web. If the US decides to block Mexican tomatoes, and Mexico decides to block American apples, those apples may well wind up flooding the market in Scandinavia, reducing not only opportunities for other apple producers to sell there but, also, because of the inexpensive apples being on heavy promotion, it would likely impact sales of grapes, pears, oranges and other snacking fruit.
Roberta Cook is one of the most thorough researchers in produce today. She further has the kind of globally oriented mind that catches the implications for global trade of seemingly local issues. To have the opportunity to hear Roberta Cook speak is a treat!
Come and join this conversation with Roberta Cook, at The London Produce Show and Conference.
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There is near unanimity on the desirability of children eating more produce. But when one looks at the initiatives actually done, almost all wind up getting children to eat more sweet fruit and calling it a victory.
The problem, of course, is that many of the healthiest elements of produce consumption come about through consuming more vegetables. When we learned of a researcher focused on this area, we dove in and were thrilled when Gertrude Zeinstra of Consumer Science agreed to share her research at The London Produce Show and Conference. We asked Pundit Pundit Investigator and Special Project Editor Mira Slott to find out more:
Wageningen, The Netherlands
Q: Anecdotal evidence can sometimes distort or cloud the reality of a program’s success or failure in increasing children’s produce consumption. This is why we are so pleased you will be presenting your expert, scientifically based research at the London Produce Show to help attendees formulate and validate effective policies and strategies in this challenging arena.
Before we delve into a preview of your enlightening talk, could you share some background about the Consumer Science & Health group at Wageningen Food & Biobased Research, and your role?
A: I work as a consumer scientist and project leader at Wageningen Food & Biobased Research, The Netherlands, one of the research institutes at Wageningen University & Research. Our institute does research for industry, government and other customers.
The mission of our Consumer Science and Health group is to understand consumer’s food choices and eating behavior in order to facilitate healthy and sustainable food choices. I am educated as a nutrition and health researcher with a special interest in food choice and eating behavior of children.
Q: Do you collaborate with other universities and government/industry organizations on different programs. How important are these partnerships in reaching your goals?
A: Yes, we collaborate with various partners to share knowledge and to solve questions from customers in the area of consumer understanding. We are a contract-research organization. Collaboration via public private partnerships is also a requirement for receiving governmental funding.
Q: What kinds of projects will be most applicable to this London Produce Show seminar, Marketing Produce to Children?
A: Various projects involve trying to enhance children’s preferences for, and intake of, fruit and vegetables. For example, my PhD dissertation, Encouraging vegetable intake in children: the role of parental strategies, cognitive development and properties of food; and the EU project,Habeat: determining factors and critical periods in food habit formation and breaking in early childhood, a multidisciplinary approach.
I will highlight points in my dissertation because it’s kind of a starting point for doing much more research on vegetables. When I began this work, there was a lot of research on fruit but not so much on vegetables. My thesis aimed to develop new approaches to increase produce preferences and intake in 4- to 12-year-old children. I also will talk about the European Habeat project and a recent project we did in childcare.
Q: What are the key points you’ll be bringing out at the seminar?
A: What I think is important to point out is that for children, there is often a large difference between fruits and vegetables. Fruit in general is very sweet, and we have an inborn preference for sweet, so usually fruit is quite liked by children, whereas vegetables are often not so well liked. We have an inborn aversion to bitter tastes and sour tastes. Some vegetables are quite bitter, so that’s one of the reasons why children want to abstain from eating them.
We also have an inborn tendency to like foods with a lot of energy, and vegetables do not contain a lot of energy. So, that’s also a reason why we probably don’t like vegetables that much right from the start. One thing I want to make clear… when it comes to vegetables, we really need to learn to eat them and it may take some effort.
Q: How do we go about tackling that challenge?
A: We know for children that taste is a very important determinant for intake. In general, children won’t eat something they don’t like, even if it will have a positive impact, or relieve pain. For instance, if they have an earache and the medication is not-so-nice tasting, they will not take it, even if you explain it will be good for their ear and make the pain go away. It’s difficult. In our research, we looked at known strategies for increasing children’s likings of food, and we studied whether these strategies could be applied to vegetables as well.
First, we conducted a qualitative study with three age groups from primary school representing different cognitive development stages, and a parental survey study.
In this parental questionnaire, we wanted to see what Dutch parents were doing to increase their children’s fruit and vegetable intake. Here we also found a difference between fruits and vegetables. The atmosphere around vegetables was more negative than for fruit, mainly because there was more pressure put on the kids to eat the vegetables. We know from the literature that using pressure to get kids to eat certain food items is often not a very beneficial strategy; it is usually counter-productive. They might eat the food at the moment, but it’s the kind of message that conveys the food is not-so-nice or tasty.
These initial studies indicated that parents who give their children a choice or some kind of autonomy with eating fruits and vegetables have children who eat more fruit and vegetables. Texture is also an important factor for children. We know from literature that raw vegetables are often easier for children, and they don’t like very slippery or mushy vegetables, such as asparagus or mushrooms, but cucumber or raw carrots are usually quite ok for the children. In our study, texture was more vital for 4 to 5-year-old children’s food preferences than for 11 to 12-year-olds.
We then conducted three intervention studies, focusing on vegetables only, since increasing vegetable intake seems more challenging than increasing fruit intake, and not much research had been done on vegetables in particular.
Q: Could you walk us through the methodology, how the studies worked, and what you learned, etc.?
A: We wanted to explore the effects of different preparation methods on children’s vegetable liking. We had carrots and French beans prepared using six different methods — mashed, boiled, steamed, grilled, stir-fried and deep-fried, to see which the children preferred most and least, in a ranked order. An adult panel scored the six preparations on their appearance, taste and texture characteristics.
We found that steamed and boiled were most appreciated by the kids, and boiled is also the most familiar method in the Netherlands. Familiarity is also important for children’s food choice; they are often reluctant to try unfamiliar foods. We found when the appearance of the vegetable was uniform, it positively influenced their liking. This was also the case for a crunchy texture. Whereas, when there was brown coloring on the vegetables due to the preparation, it negatively influenced their liking. When the texture was granular (mashed with pieces inside), that was not really liked by the children either. So, the advice is if a child doesn’t like a certain preparation, try another. It’s important for parents to vary the methods of preparation.
Q: What other factors did you consider?
A: We wanted to test in an experiment whether choice and autonomy would influence child’s intake. If you offer children a choice of vegetables, will it increase their consumption? We conducted a study with 300 children. The child was invited with one of his/her parents to have a dinner in a restaurant. For each child, two target vegetables were selected that were similarly liked by the child. 100 children in the control group didn’t have a choice, and just got one vegetable. 100 had a choice between the two vegetables, and the other group had both of these vegetables on the plate, thus having choice and variation. We measured consumption and how much they liked the vegetables.
Q: Did the results meet your hypothesis?
A: Unfortunately, we did not see any difference in their intake, although we expected that this choice situation would influence results and be positive for children’s vegetable consumption. In addition, we found no difference in the liking of the vegetables.
Q: Wasn’t this counter to your initial parental survey study?
A: Yes, but we also asked the parents how reactant their children were beforehand via a questionnaire, so how much they were opposed to rules and so on. For the 100 kids who didn’t have a choice, there was a difference between high reactant children and low reactant children in their vegetable consumption. It seems there is something going on with choice. We believe that going to a restaurant setting may have been overwhelming for these young children (aged 4-6 years) and may have influenced our finding. Sometimes there’s a positive effect of choice on children’s intake and sometimes, not, so more research is needed here.
Q: At one of our past New York Produce Shows, Gabriella Morini, a taste and food sciences professor and researcher at the University of Gastronomic Sciences in Pollenzo, Italy, presented research on the molecular aspects of taste, and argued the need to condition taste receptors, which are naturally opposed to bitter vegetables, starting at an early age, preferably when the child is in the womb. And studies have found that children may require multiple repeated tastings of a vegetable before liking it, due to their developing and changing taste buds. Did this phenomenon play into your research?
A: This repeated tasting is one of the key findings, very consistent in the Habeat project. Most of these repeated exposure studies have been done in very young children when eating their first solid foods. When introducing new vegetable tastes, repeated exposure is very important to make the child familiar with the taste of this initially unfamiliar vegetable taste.
In the Habeat project, repeated exposure has been compared with other conditioning mechanisms. One of those mechanisms is pairing a new taste vegetable with a high energy food such as a sweet fruit, usually resulting in higher liking. It's an important question to ask if this works also for vegetables to use high energy as a bridge to liking. It’s an important question to ask if this works also for vegetables to use high energy as a bridge to liking. The other mechanism is to pair an unfamiliar taste with a liked sweet taste. Various studies have been done with these three mechanisms.
Q: Are these conditioning mechanisms effective when applied to vegetables?
A: What we actually saw in the Habeat project was that repeated exposure was the key. Adding energy or adding sweetness was not really necessary. So, repeated exposure is very effective for unfamiliar/novel vegetable tastes. But what can we do to increase consumption with more familiar vegetables? When children are three or four years old, they’ve already learned, ‘this is a vegetable I like, and this is one I don’t.’
Q: Have you weighed the influence of biological factors with environmental and social factors?
A: Yes, we often look into the whole picture; eating behavior is very complex. For example, role modeling is a very important influence. In many studies, parental intake is a strong predictor of children’s intake. For this Habeat project, we did a role-modeling study with child idols that took place at the schools. We played a movie where a role model was eating vegetables enthusiastically, and we did several exposures to the vegetables and this movie. There was not an immediate effect of higher intake due to the intervention.
What we did find, though, was that the kids who were exposed to these role-model movies had a higher intake compared to the children in the control group over an extended period of time when we later measured intake of the children again. We were quite surprised that this effect was present in the longer term.
The study is challenging because there may be a delayed effect from the intervention. In future research, it is important to take into account direct and delayed effects. Especially with children that develop in steps, it is possible that delayed effects may occur.
Q: Could you elaborate on the complications of studying delayed effects? Aren’t there many variables, which also differ from child to child? How can you adjust for all the impacts that could influence their consumption levels?
A: Definitely, it is impossible to control for all impacts that influence consumption. There is also a technical side. It is costly to do a study where you follow children over time. Also, children vary a lot in their vegetable intake, so if you want to measure accurately, you have to measure at an individual level, what you give them, and the actual amount of what they consume at the different stages of the process. Therefore, longer term studies also require money.
And just as background, in the Netherlands vegetables are practically only eaten during dinner, so the recommended amount is hard to consume in one eating moment. In the Netherlands, we should try to increase the number of eating moments for these vegetables. Also for children, it’s quite a high amount to eat in one single session, and parents are eager for children to eat healthfully, so there will be pressure for them to eat all their vegetables. It would be better to spread out eating moments with snacks in between meals.
Q: Did you undertake a study to test this strategy?
A: We developed a project called Veggie Time in various daycare centers. In the Netherlands, you see that at the daycare centers they commonly have a time in the day set for a fruit snack. In the morning around 10:00 or 11:00, it’s fruit time, but there is no such moment for vegetables. We thought it would be an ideal thing to do. We knew repeated exposure was such a strong mechanism; we thought it would be good to conduct an experiment in a natural setting. Most studies with repeated exposure are researcher-led or with only one vegetable. We wanted to see if the mechanism worked also in the daily practice of a daycare setting with various vegetable tastes. So, we chose three different unfamiliar vegetables for the experiment.
We had a control group and an intervention group, where we pre-measured their intake of these three vegetables. Then the intervention group had an exposure period of five months where they had these three vegetables offered repeatedly, in various product forms, where the control group did not have exposure to these three vegetables. After the five months, we went back and measured intake in the intervention and control group. We saw for two of the three vegetables, the children in the intervention group increased their intake quite nicely compared to the control group.
Q: What were the three vegetables, and why were just two out of three a hit with the children?
A: We used pumpkin, white radish and zucchini. Pumpkin and white radish showed an increase in intake. With the zucchini, we didn’t see the intake increase or decrease; it remained stable. This could be due to the blander taste of zucchini, or to the fact that – we also checked with the parents — zucchini was more often on the menu, so more familiar than expected beforehand.
Q: Earlier in our discussion, you said that familiarity was an appealing trait for children. Yet, you found the increased intake with the less familiar items?
A: Yes, in general, familiarity is a positive trait, but there is a difference between willingness to eat and increasing intake. Familiarity is a positive predictor of children’s intake; when a choice, most children will choose familiar foods. But when products are unfamiliar, repeated exposure is a very effective mechanism to increase liking and intake.
The daycare center also provided a good setting because of the peer involvement. If other children are eating the vegetables, there is more incentive to join them. And also, if parents don’t like vegetables, they won’t serve them at home, so it’s another opportunity.
Q: Is availability and an appealing presentation half the battle?
A: Making the produce available is very important. Usually children like fruit, and if you put it in front of them, they’ll eat it. If you put cookies in front of them, they’ll eat those as well. But additionally, the item should be accessible. If a young child eats his apple without the peel and cut in slices, then a complete apple is not accessible to this child. This is necessary to take into account.
Q: I was going to ask you what advice you have for attendees, so you’re answering this question…
A: Ready-to-eat is great for the children and easy for the parents to provide to the children. That’s indeed very important.
Also, it should not only be about health as a selling argument because young children don’t understand this term, it’s too abstract for them, and several studies show that children may associate healthy with distaste. So, it’s better to focus on fun and pleasant. That’s a key message to provide. And indeed, different preparation is important because children vary in their preferences and desired product textures.
Q: You’ve referenced several instances where you believe there is a need for future research. How difficult is the research you’re undertaking? Do you have interesting projects in the pipeline? What areas of research are you looking to explore next?
A: Especially with this research with children and vegetables, it is quite challenging. I started this research in 2004, and there is no magic bullet. There are a lot of strategies one can do. I’m now involved in a project at a primary school. In the Netherlands, primary schools are between ages 4 and 12 years. There is a morning break, and there are some schools that have fruits and vegetables obliged, but not all. It is usually the case that parents provide the food for the break.
We are trying to determine how fresh fruits and vegetables can become a more common habit; what’s the role of the parent, and what’s the role of the school? If all children have a produce snack, it will be a nice moment, and more encouraging for them to eat it. Also, something I’d like to explore further in the future is the relation between texture variations and children’s liking.
Q: Is your research being tied into the Dutch National Action Plan for increasing fresh fruits and vegetables?
A: I have contact with those involved in the Action Plan, and I participated in an expert round. I know they are also going to focus on families with young children. It is not now directly linked, because the project I’m doing is already underway, and they’re in the phase of setting up these studies. I would be happy to be involved in these kinds of projects.
At our institution, we welcome a lot of applied research in real-life settings. The National Action Plan wants to focus on practical initiatives and on measuring effectiveness of these initiatives, which as scientists we can do very well. Of course, they know about the work we’re doing, and I am confident we will find our way to work together.
Q: There’s one other issue I wanted to get your feedback on… In the United States, there are programs in schools, where children are offered free fresh fruits and vegetables. These programs often receive glowing feedback from teachers and administrators. Children are enthusiastic to take the free produce. A teacher might describe how the students have more energy and are more alert in class and test scores are improved, but the evidence is usually anecdotal, since it is costly and challenging to scientifically measure the results. What are your thoughts as a scientist here?
A: There are also some of these kinds of programs in Europe. You usually see reports that they are very effective in increasing children’s intake. But we also see that as soon as the project stops, the effect is gone. When it’s free and delivered to the school, it is easy for parents. The concept works for the duration of the project. In the Netherlands parents usually provide the foods the kids eat at school, so they don’t have involvement if it’s offered for free at school.
Sometimes you see subscription programs where parents have to pay for it, and often you see that higher educated or higher income parents participate, whereas the lower income parents don’t participate, although their children are the ones who need it most. In general, lower socio-economic families have lower intake of fruits and vegetables. It is important to also find strategies to increase consumption in these lower income families. Offering free produce is nice because kids will eat it and it may diminish socio-economic differences concerning produce intake, but it’s often difficult to sustain. In this regard, it is not a sustainable strategy because of the large funding involved.
I think it is important to make partnerships between the schools, the parents, and the produce sector/industry. Also, it’s important to check with the parents and the schools to understand what they want and what their needs are. Programs should fit to these needs and wants in order to be effective.
I will continue research in this area to help increase produce consumption among children, because developing healthy eating habits early in life will be of benefit for one’s whole life.
This type of work is very important to the future of the produce industry. It has often been pointed out that poor diet impacts governments that pay for health care, private health insurers and others. So, logically, the industry could get important monies from governments, insurers, foundations etc., to help boost consumption, but these efforts have been stymied by a lack of good data showing efficacy.
It is a big job because we need to be able to prove two things:
First, that some effort or program can actually increase consumption of produce over some period of time — a week, a month, a year, a lifetime.
This itself is very difficult to do. For one thing it is not enough to study children in one setting. Imagine a child who comes home every day and whose mother gives him an apple as a snack. But this child never eats fruit in school. Now, imagine we launch a free snack fruit program and give out free apples to children at 1:00 PM. This child takes an apple every day and eats it in school. On the study, he will be a big success because he goes from zero to one on fruit consumption in school, but, after school, the child is bored with apples and his mother is satisfied that he ate an apple and so now allows him a brownie for a snack. The initiative has actually produced no net increase in fruit consumption and an increase in total calorie consumption.
But a cheap and easy study – limited to what happens in school — has just become a difficult and expensive study to accurately track not only total 24-hour fruit consumption but total calorie consumption.
Second, nobody outside the industry cares that much about produce consumption. They care about the health consequences of increased produce consumption.
So we not only have to track that we have increased produce consumption, but also that this has resulted in better wellness: Less disease, longer lifespans etc., and these studies can take decades.
For many trade associations and politicians, this has meant we couldn’t do these efforts but, what it really means is we need to begin well-designed studies now and support them for many years.
This type of research can give us a clue as to what kind of research we might ultimately conduct on a larger scale.
So come and talk about vegetables and the role they play in helping children get on healthy diets. Also talk about how good research can open the doors for broader funding of produce industry initiatives.
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We look forward to seeing you at The London Produce Show and Conference 2017!