Fresh - fruit & veg 2023: Perfect storm of challenges hits UK fruit

For an indicator of the crisis in fresh produce, just look at apples. Volumes have fallen by 7.5%, or 22.3 million units.

Meanwhile, average retail prices have risen by 4.4%. But returns to growers remain minimal, says British Apples & Pears. They only increased by 0.8% in 2022, according to its survey – and in 2023, production costs continued to outpace returns, which grew 7%.

Profitability has therefore taken a big hit as growers face erratic weather, labour shortages and soaring input costs.

This perfect storm of market conditions is “putting the future of British apple growing at risk”, warns BAP’s executive chair Ali Capper. “It’s a situation that must change and change quickly.”

Berries are facing a similar crisis. For strawberries, the cost of production has increased by 18.1p per 400g pack since 2021, found research by Andersons, published in November. However, average grower returns have only gone up by 3.6p.

In raspberries, production costs have risen by 21.2p per 200g, but returns to growers have increased by just 11.4p per pack.

Berry blues as production costs rise

It’s inequities such as these that the government’s upcoming fresh produce supply chain review is looking to address. It was due to kick off this year but has yet to begin.

And it may be too late for an industry that is already suffering from falling volumes on top of dwindling returns. Eight of the top 10 fruits have taken a hit to volumes (though it’s worth noting not all of these are UK-grown).

In the case of raspberries, which have suffered a 4.1% dip, BBG says this is down to growers cutting back on planting, resulting in fewer punnets on shelves.

And supplies of apples could soon tighten, too. A third of new tree orders were cancelled at the start of the year, according to British Apples & Pears.

If that trend is to reverse, retailer support will be vital. On top of minimal returns, apple growers have been complaining of the mults dragging out future price negotiations. Indeed, some conversations this year continued into October – when the harvest was already underway.

To make matters worse, retailers are increasingly stocking produce from overseas. Key retailers have decreased their UK apple stocks in the past year, according to sales data from BAP. For example, Tesco accounted for only 9.8% of total British apples sold in October 2023 – down from 21.7% at the same time last year – despite having 27.4% grocery market share.

The rise of imported variants is exemplified by the success of the Pink Lady apple brand. It claims to be the second biggest supermarket apple variety after gala, having overtaken braeburn for the first time this year. Although the first UK-grown Pink Lady apples went on sale in 2022 (see below), the majority are still sourced from Continental Europe.

A shortage of salad leaves

And relying on overseas supply comes with its own challenges. Those were highlighted by the nationwide shortages of salad lines at the start of the year. High temperatures in Europe and Morocco resulted in limited supply of items such as cucumbers and peppers, forcing the mults to implement buying restrictions in spring.

At the time, growers warned overall food security was threatened by the increasing reliance on imports and lower homegrown production levels.

The impact of these shortages is evident in this year’s Top Products data. The average price of cucumbers has shot up by 37.2%, while volumes have fallen 5.6%. Meanwhile, peppers have become 11.2% pricier and volumes have fallen 4%.

For crops predominantly grown in the UK, weather pressures have also stymied production. In the past 12 months, growers have faced a cold, wet spring followed by a mild and wet summer, a delayed autumn, and heavy rainfall and severe flooding in parts of the country.

This has had an impact on all types of vegetable plantings and harvests. But potatoes are particularly in the firing line, says Tim O’Malley, Nationwide Produce group managing director. They’ve already suffered a 2.8% drop in volume this year – a fall that could worsen in the year ahead.

Plantings of the potato crop were delayed by the spring and summer weather, and the impact was compounded by a wet autumn, O’Malley says. This has severely impacted crop performance, he reports, and harvest numbers are lower than normal.

“Plantings on spuds were already down by around 10% after the last dreadful growing season,” says O’Malley. “On top of this we now have around 15% to 20% still in the ground. Some of this [crop], that has sat in water too long, won’t be lifted. The rest that is lifted will be of poorer quality.

“Generally, supply was tight for last season and looks like it will be tight again for this season,” he sums up.

Brassicas and root vegetables have also fallen casualty to the poor weather. The latest bout of heavy rainfall is having a material impact on yield quality and quantity, says O’Malley.

That comes on top of a tough year for cauliflower, which has faced a 4.7% decline in volume, and flat volumes for broccoli.

Weather a real fresh produce challenge

“When you add to this all the other challenges UK growers are facing, it’s no wonder we’re seeing more and more production of veg being driven abroad,” says O’Malley.

The reality is summed up by Matthew Thomas, head of sales and marketing at Welsh packer and supplier Puffin Produce. He says the weather has proven a “real challenge” for the company.

While Puffin is “very active in terms of our environmental agenda to combat and reduce the risk that we do have”, the business is struggling to predict what will happen with the weather. “We just need to be prepared,” Thomas adds.

Amid all this uncertainty, one thing is for sure: growers will need support from retailers more than ever in the year ahead.