Rabobank Report: Fruit And Vegetable Consumption Falls In U.S. & Western Europe

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Jul 09, 2013, 11:16 ET

NEW YORK, July 9, 2013 /PRNewswire/ -- Rabobank has published a new report on the decline in consumption of fruits and vegetables in the U.S. and Western Europe, despite government efforts to promote healthy diets that include fruit and vegetable consumption.

In the report, published by the bank's Food & Agribusiness Research and Advisory team, the bank says that despite efforts by governments to promote the benefits of a healthy diet, consumption of fruit and vegetables in Western Europe and the U.S. has declined over the past decade. Rabobank cites lower incomes and perceived price increases, alongside strong competition from processed and convenience foods, as the major factors driving this trend. Producers, processors and retailers must all explore ways to inspire greater consumption of fruit & vegetables if the industry is to flourish.

Cindy van Rijswick, Rabobank analyst, commented, "The challenge for the fruits and vegetables industry is to close the gap between what consumers say they want and what they actually do. Surveys have shown that, in principle, consumers are positive-minded about healthy eating, but in practice they are easily swayed by creative marketing of processed food and beverages and exhibit a strong bias for convenience products."

On a household level, there is a clear relationship between income and fruit and vegetable intake, meaning that in a tough economic climate, consumers become more susceptible to fluctuations in price. This impact can be exacerbated by the common misperception among consumers that unhealthy food is cheaper to eat than healthy food. Between 2006 and 2011, in both the EU and U.S., average consumer prices for fruits and vegetables in fact increased less than prices of the total food category, but consumption levels fell.

Processed foods have become a strong competitor for fruits & vegetables for different reasons: availability, taste, marketing, product range and convenience. Even when consumers do opt for a healthy choice, they will likely select processed foods in the "health and wellness category" over a fresh option (despite the fact that research has found that two-thirds of U.S. and half of all European products referencing fruit on their packaging contained no or only trace amounts of fruit). It is extremely difficult for the fresh produce industry to match the sophisticated marketing efforts of processed health foods as most fresh products are sold unpackaged and unbranded.

Rabobank says there are three ways in which the industry must invest/evolve in order to boost consumption levels:

1. Reducing inconvenience: Convenience is often cited as a barrier to consumption of fruits and vegetables, a claim that is supported by the increasing popularity of prepared (i.e. washed, cut, diced, sliced, and packaged) products. The industry must continue to find innovative ways to boost convenience, e.g., offering chopped vegetables that can be heated directly in the microwave without removing packaging.

2. Marketing based on more than health benefits: Most consumers are already aware that fruit & vegetables are good for them and governments are the best vehicle for promoting the benefits of a healthy diet. Therefore, the industry should focus on informing consumers about the convenience, taste, enjoyment, and versatility of fruits & vegetables

3. Better cooperation along the supply chain: Keeping inferior quality products off the market is crucial to securing consumer buy-in. Short dedicated supply chains in which the brand owner is in control can enable partners to work together more closely to improve basic features, such as quality and freshness (e.g., by reducing the time to market or choosing the tastiest varieties)

Rabobank's report on consumption trends in the fruit and vegetable sector is available to media upon request.

Rabobank Group is a global financial services leader providing wholesale and retail banking, leasing, real estate services, and renewable energy project financing. Founded over a century ago, Rabobank is one of the largest banks in the world, with nearly $1 trillion in assets and operations in more than 40 countries. In North America, Rabobank is a premier bank to the food, beverage and agribusiness industry. Rabobank's Food & Agribusiness Research and Advisory team is comprised of more than 80 analysts around the world who provide expert analysis, insight and counsel to Rabobank clients about trends, issues and developments in all sectors of agriculture. www.rabobank.com/f&a

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SOURCE Rabobank