77% of the sales by value of supermarkets and hypermarkets are fruits and vegetables
Approximately 200 professionals attended Ro-Fruits & Vegetables Show, an event dedicated exclusively to the fruit and vegetables industry. Guest speakers provided relevant information on the new specific trends of the industry and examples of best practice, also shaping an overall image of the market. The information provided within the event indicates that fruit and vegetables are in the top five positions when it comes to categories of products sold in the modern retail in Romania.
Fresh fruit and vegetables aisles in large modern retail chains attract more and more Romanian consumers, which is also reflected by the sales figures registered by retailers. With regard to the list of top sales in the fruit category, it includes bananas, apples, oranges, lemons, grapes, avocados, clementines and watermelon, covering 77% of the total sales in hypermarkets and supermarkets and 84% of the volume of sales. When it comes to vegetables, tomatoes, potatoes, peppers, onions, mushrooms and cucumbers are preferred by Romanian consumers. The list of the best sold vegetables represents 77% of the sales by value and 90% of the sales by volume.
According to the data published by RetailZoom within the event RO-Fruits & Vegetables Show, 2019 edition, the consumption of fruit in modern retail increased by 15% in volume and 10% in value in the period November 2018 – October 2019 (data taken from the review of sales for six modern retail chains in Romania). With regard to value (money spent by consumers), the evolution of the fruit category was slower than the evolution of vegetables (+ 8.5% in volume and +30% in value).
“With regard to value, in the past year (November 2018 – October 2019), fruit and vegetables were in top 5 best-selling categories in modern retail (international supermarket and hypermarket chains), in the universe monitored by RetailZoom. Concretely, fruit and vegetables ranked 4th and 5th as sales by value, right below the flagship sales categories: meat, cigarettes, beer. Fruit sold, according to value, 19% more than vegetables, and 34% more by volume”, said Bogdana Gheorghe, Managing Director of RetailZoom.
The activity in the fresh fruit and vegetables category in modern retail is also stimulated by various promotions made by retailers. According to the data of an analysis presented exclusively for RO Fruits & Vegetables Show by Ionuţ Parfente, consultant with IQ Arconsult, in the period of July – October 2019, the total number of items promoted in nine retail networks by means of well-defined weekly promotional activities (with the exception of Auchan, which is only developing in-store promotions), was of 1,347, most of them being registered in hypermarket networks. At the opposite end are proximity networks. The largest average number of items is found in retailers with generous areas of fruit and vegetables departments.
“What we see, as simple consumers – a promotional material (a magazine, most of the time) and a retail price discount, is actually a final stage of the respective promotional cycle. This stage is part of an annual calendar prepared by each separate retailer. Generally, price discounts in the category of fruit and vegetables have weekly availabilities and are strongly influenced by seasonality”, a said Ionuţ Parfente, IQ Arconsult.
Profitability of the industry of Romanian farmers
Turnovers for non-perennial plant farmers (including vegetables) increased marginally compared to 2017, exceeding by 5.4% the level of 2014 (data taken in October 2019). For 2019, specialists estimate an increase of up to 4%, approximately RON 20.8 billion. The industry of non-perennial plant farmers (vegetables and root vegetables) was represented by approximately 10,000 companies in 2018, among which: 4 large companies, 98 medium-sized companies, 975 small companies and 8,700 micro companies. The largest weight in the turnover is generated by micro-companies (41% out of the total). However, more than 20% (1,994) declared in 2018, turnover equal to zero. A review of the industry of Romanian farmers presented by Tudor Malearov – Business Development Manager, KeysFin, brings to the spotlight the industry of perennial plant farmers (including grapes and fruit), an industry represented by approximately 1,900 companies in 2018, among which: one large company, 15 medium-sized companies, 96 small companies and 1,782 micro-companies. The largest weight in the turnover was generated by medium-sized companies (45% out of the total). In this regard, more than 41% (779) of the companies registered turnover for 2018 equal to zero.
Opportunities for the fruit and vegetable sector
Daniel Buda, Member of the European Parliament, Vice-Chair of the Committee on Agriculture and Rural Development and member of the European People’s Party in the European Parliament joined the purchasers, producers, analysts and service providers. He said that the new regulation of the Common Agricultural Policy (CAP) brings larger direct payments per hectare for Romania. Coupled support provided by Pillar I (direct payments) will maintain the current list of products that benefit from coupled support: potatoes, greenhouse vegetables, tomatoes, plums, apples, apricots, and cucumbers. The reviewed scheme for fruit and vegetables in schools establishes new regulations and gives priority to seasonal vegetables and fruits, as well as to regional ones. The European Union provides annually EUR 2 million to Romania for this programme, and these funds are supplemented by EUR 465,000 as national contribution.
Another direction which is recommended to fruit and vegetable farmers is the one related to the development of processing capacities of the raw product. Romania has EUR 6.2 billion provisioned for rural development in the period 2021-2027. A large portion of these funds must be directed towards processing capacities. This will allow both the development of the short supply chain and the large processing capacities. The aim is that, in the end, consumers have access to quality products at reasonable products.
Present for more than 10 years on the Romanian market, the online publication Modern Buyer targets acquisition and sales professionals in retail, FMCG, HoReCa, do-it-yourself, electro-IT and e-commerce industries.