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Survey sheds light on Australia’s online grocery shoppers

A third of consumers who buy their groceries online do so because it’s easier than shopping in a physical store.

Australians are curious about the benefits of buying their groceries online, but the majority don’t feel the need to make a permanent transition as they remain content with the current offerings provided by the bricks and mortar stores, reports customer satisfaction research and ratings business Canstar Blue.

Based on a survey of 6,014 Australians, it said consumers often prefer to physically inspect certain grocery items before purchasing them, particularly when it comes to fresh fruits and vegetables, dairy products and meats.

“However, 42% of the 1,474 adults who have bought groceries online in the last six months said they expect to do the majority of their shopping this way in future. And as online grocery retailers continue to develop their services, it seems a reasonable assumption that more and more consumers will choose to shop this way in the coming years, even if it is only occasionally.”

Of those who had ordered groceries online in the last six months, just one in five choose do all of their shopping this way, Canstar Blue said.

Its research also found:

Who buys their groceries online?

  • women (27%) are more likely than men (21%) to have bought groceries online in the last six months
  • but of those who have done so, men (22%) were more likely than women (18%) to do all of their grocery shopping this way
  • adults aged in their 30s were most likely to have bought groceries online in the last six months (37%), followed by 18-29 year-olds (30%) and consumers in their 40s (29%)

Why people buy groceries online

  • 35% of consumers buy their groceries online because it’s easier than shopping in a physical store
  • 24% struggle to find time to shop in-store
  • 17% believe it’s cheaper buying online
  • 7% don’t like visiting supermarkets
  • the majority of survey respondents (55%) always use the same website when they buy their groceries online, but 36% have tried more than one online grocery store
  • most consumers (64%) are inclined to click onto the website of the supermarket chain they usually buy from in person

What people don’t like about buying groceries online

  • 30% of online shoppers cited delivery costs as the biggest cause of complaint
  • 18% said their greatest issue was receiving replacement items for products that were unavailable
  • 15% found uncertain delivery times their main bugbear

How much people spend when buying groceries online

  • More than half of consumers (58%) said they tend to spend less online than they would if they bought their groceries from a bricks and mortar store.
  • While a previous Canstar Blue survey found consumers spend an average of $138 per week when they buy groceries in-store, the average for respondents in this survey was a $130 spend on their weekly online shop.

“It’s worth remembering, said Canstar Blue, “that buying online arguably makes you less likely to impulse buy other products that perhaps weren’t on your shopping list in the first place. Shopping online could also make you more price-conscious and willing to select a cheaper option if it’s available. You could argue that shopping online allows you to pay closer attention to your spending, when it’s easier to get carried away in store.”

Read the results here:
Online shop image: by Namakkalshowroom (Own work) [CC BY-SA 4.0 (], via Wikimedia Commons

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Spanish supermarkets shift more fruit & veg

The recovery in prices and good weather have been a boon for retail sales of fruit in Spain, which in the first nine months of 2015 were up 10.2% on the same period last year.

The recovery in prices and good weather have been a boon for retail sales of fruit in Spain, which in the first nine months of 2015 were up 10.2% on the same period last year.

According to a post by Nielsen Spain’s retail services account manager Gema del Castillo, vegetables have also increased their presence in shopping baskets, rising 7% compared to Jan-Sept 2014.

Del Castillo singled out the avocado for special attention, noting sales growth of 43.9%, “possibly helped by its status as a ‘superfood’.” Also undergoing strong growth were courgettes and artichokes, which both increased their sales by more than 20%, with broccoli not far behind (+19.9%).

But it’s the classics. such as oranges and potatoes, which are still the most common in Spanish shopping baskets, she said.

Fruit and vegetables are also gaining ground in online sales, with growth of 26.3% in sales of this produce online, compared to 8.7% for sales in physical stores.

Interestingly, it’s not just the sale of heavy produce, such as oranges and potatoes, that were popular in online sales, but also ready-to-serve and seasonal produce items. Del Castillo said sales of the latter were helped by online promotions.

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How Spain’s fruit and vegetables market is evolving

Nielsen’s retail services account manager, Gema del Castillo Tamayo, shared insights into today’s Spanish consumer and where opportunities for growth lie.

Is there scope to increase retail sales of fruit and vegetables in post-recession Spain? At the AECOC Fruit and Vegetable Congress in Valencia in June, Nielsen’s retail services account manager, Gema del Castillo, shared insights into today’s Spanish consumer and where opportunities for growth lie.

Signs of economic recovery

Del Castillo started by looking at whether the market is on the road to recovery. Effectively, European consumer confidence continues to improve, she said, but it is yet to return to pre-crisis levels, namely before the big recession hit Europe (in about 2008). Nielsen data shows that In Spain, consumer confidence has reached levels not seen since 2010. There was 3% growth in the Spanish GDP in the first quarter of 2015, while the CPI fell 0.7%.

Other indicators, such as an increase in employment, car registrations, sales of electrical appliances and electricity consumption also augur well for believing that a recovery has started. The hospitality business, for instance, has stabilised, with beverage sales showing growth since 2013 and for the first time in six years the number of establishments has started to increase again. But Del Castillo warned this is a bit of a wobbly start to recovery that is accompanied by uncertainty.

What’s happening with FMCG sales?

Nielsen’s analysis shows that despite a decline in Spain’s population last year, demand strengthened, though with the downside of a drop in retail prices. Compared to 2013, the value of retail sales last year fell 0.4% and prices 1.1% but the volume was up 0.7%. For fresh produce specifically, sales were 1.2% and prices 1.8% lower as the volume rose 0.6%. But compared to last year, retail sales to this April were up 0.7% in value and 1.1% in volume and prices up 0.4%, with the respective changes for fresh produce being +0.3%, +1.2% and -0.9%. Thus overall the context is one of improved demand and a slowing of the drop in prices.

Key components of the fast-moving consumer goods industry during the first quarter of this year were:

  • Strong pace of new store openings and concentration of the top retail chains
  • Supermarkets and superstores are gaining share from specialist and traditional stores
  • A slowing in relation to the increased market share of private label goods (they have since started to grow again)
  • A stable level of deal proneness

Price-sensitive, bargain-hunting shoppers

On the latter, Del Castillo highlighted that, according to Shoppertrends 2015:

  • 24% of consumers will change stores depending on which one offers the best sales promo
  • 37% rarely change stores but do actively look for the special offers
  • 20% say they know the prices of all the articles they buy regularly
  • 46% say they  know the prices of most of the articles they buy regularly and notice when there is a price change
  • 72% of shoppers believe that food prices have risen in the last year

The last figure shows that while there’s been a deflation of prices, many households have not perceived it, she said.

Trends in fruit and vegetables sales

Last year, fruit and vegetables accounted for 11% of Spanish consumers’ shopping spend, up from 10% in 2011.

Sales in the main categories have grown in volume thanks to lower prices. For fruit, it is oranges that are the winners, representing about 27% of the total fruit volume sold in the 12 months to April this year in Spain. Add mandarin sales (7% of the total), and citrus fruit accounts for one in every three fruits sold. Apples (11%) and bananas (10%) were next hottest in demand.

As for vegetables, potatoes formed 29% of the volume sold over the same period and tomatoes 16% and together they account for nearly one in every 2kg of vegetables bought, but just 31% of the total vegetable spend. Next highest in volume came onions (9%) and peppers (5%).

Nielsen’s household panel data shows fresh produce is accounting for an increasing share of the value among all shopping missions, but particularly in the case of routine ones, which are those involving the biggest spend. It is also increasing across all retail channels, but above all in supermarkets and superstores. The latter are gaining ground, moving from 51% in 2008 to 58% in 2014 in terms of fresh produce sales, compared to 49% to 42% for traditional and specialist grocers.

Opportunities for growth: online and convenience channels

Del Castillo said that as growth opportunities, two areas that have already seen major gains outside Spain are the online and convenience channels.

“The online channel is growing at a much faster rate than offline,” she said, displaying figures showing the value of online fresh produce sales value grew 14.7% for the 12 months to April 2015 while offline sales rose just 2.2%.

Fresh produce accounts for a smaller share of the online shopping basket – for fruit it’s 17% for offline and 9% online –  however there are big opportunities for staples such as potatoes.

The key to increasing online sales is to “earn trust through reliability“, Del Castillo advised, and ways to do this include offering customers a refund if they’re not happy with the produce delivered. In her own experience, Del Castillo said the melon delivered to her by online suppliers is usually much tastier than what she picks herself in person.

“More and more shoppers are buying fresh products online despite retailers being sceptical about the potential of this channel for them. The consumer is definitely ready to do part of their fresh product shopping online, all that is lacking is the retailers’ investment to sell these products online properly,” she said.

The convenience channel, which includes a broad range of outlets including petrol stations, fitness centres and airport and train station shops, is also very promising. Sales of convenience products, such as pre-cut and prepared fruit, salad and vegetables in the UK’s leading supermarkets, are worth €1.7 billion a year, according to Nielsen Scantrack Grocery Multiples data.

Photos of Gema del Castillo by Roger Castellón courtesy of AECOC

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Inside India’s biggest e-grocer – BigBasket

Big Basket is currently India’s biggest online grocery player, clocking an average 12,000 orders a day – 70% of which include fruit and vegetables – and sales growing 10-15% month on month.

BigBasket says fruit exporters have a big chance to grow their brands in India, the world’s 6th largest grocery market e-grocery

Currently India’s biggest online grocery player, BigBasket clocks an average 12,000 orders a day – 70% of which include fruit and vegetables – and sales growing 10-15% month on month.

Even so, that’s just a drop in the ocean of potential grocery e-commerce in India. Against a total F&V market of about US$ 53 billion, modern retail sales of fresh fruit and vegetables contribute around US$ 500 million and online sales around US$ 30 million. So said Vipul Mittal, head of fruit and vegetables for Bangalore-based

Speaking to ED from India, Mittal also stressed that e-retail success is “not as simple as it looks.”

“A lot of back end work has gone into this company over the last 3-4 years to make it very powerful. It’s about being a comprehensive service and delivery package and not just a web site.”

And Indian consumers look for value irrespective of the channel through which they buy. Hence constant benchmarking against all competitors takes place to compare prices and ensure value, he said.

E-grocery potential in India

With an estimated 1.27 billion people — and likely to overtake China by 2028 as the world’s most populous country — India also has lowest rate of meat consumption, highest rate of vegetarianism, and a growing affluent class keen to try new cuisines.

According to the Indian daily Business Standard, last year Randstad India – which pegged India as the world’s 6th biggest grocery market – estimated just 1% of the groceries Indians buy are online. By 2020, it expected that to grow to 2%, making India’s online grocery market worth around €9 billion.

Indian households tend to buy fruit and vegetables 2-3 times a week, and the same trend is seen on Bigbasket.

Mittal said e-commerce facilitates insight into consumer buying patterns and allows the offering to be tailored accordingly, for instance running a promo on apples to all mango customers in the off-season (July).

Expansion into ready-to-cook food

The online retailer sells other grocery items apart from food, such as personal hygiene products, but until now, sales of fruit and vegetables have hovered around 14-16% of its total value sales, Mittal said.

However, having built a solid customer base, it now plans to increase its assortment further with many other food products including an imported and gourmet range.

According to recent reports, BigBasket is also set to offer more organic fruit and vegetables and plans to start selling gourmet salads and ready-to-cook meals – initially Thai, Mexican and Italian dishes – that include freshly cut vegetables and other ingredients, and recipes. This it has launched under the brand ‘Happy chef’ – a la Blue Apron.

Technology aids forecasting

Getting supply right is the key to BigBasket’s success, Mittal said. ”We have used a lot of technology for forecasting demand and use a dynamic model to plan capacity and the availability of vehicles.”

“Historical data has limited scope to assist demand forecasting in perishables, especially when the growth is so rapid and there are multiple variables.”

Big Basket has developed backward linkages with growers and buys directly from growers wherever possible, giving it better control of quality and enabling delivery of fresher produce by reducing time between harvest and consumption.

Direct sourcing preferred

BigBasket is currently located in six cities – Bangalore, Hyderabad, Mumbai, Pune, Chennai and Delhi – and tries to source what it needs in the vicinity of each.

By the end of this financial year, it will have opened 50 more locations, all in clusters with 5-6 cities around six central locations typically with one central warehouse.

BigBasket has no contracts with growers as yet, but is setting up collection centres to source directly from multiple farmers. It plans to establish linkages to bring safe food to the table with complete traceability, having already set up four such centres in southern India.

“We are currently a very small player with respect to total production in an area. So typically when we go into source areas, there are multiple farmers who can supply us. We create an enabling environment for the farmer to bring his produce to us soon after harvest and provide him the transparency of price and weighment. We have also initiated a pilot to provide extension services to the farmers through our field agronomists.”

BigBasket may also draw on wholesale markets to fill any gaps but prefers not to, Mittal said, because the produce is a step further from harvest, therefore less fresh and more expensive. “Quality and freshness are the driving force rather than price and margin.”

Chance for exporters to build brands

In terms of opportunities to export into India, it is a matter of creating differentiation, which so far has been very limited. BigBasket is looking to stand apart by bringing in different products and varieties, such as seedless watermelon, wider variety of pears and apples, exotic fruit, etc. (Few vegetables are imported by India, mainly due to shelf life reasons.)

Mittal stressed he sees a big – and so far largely untapped – potential for foreign suppliers to harness e-commerce to build their brands.

Most imports into India are channelled through traders and conventional retail channel. Growers/shippers don’t have much opportunity to build their brands because they don’t have much control over distribution channels, as well as other marketing elements. BigBasket, in contrast, can package, display and deliver its imported apples under a brand, for instance.

“It’s a big opportunity to build a brand in India, where ecommerce is still in a very infantile stage but set to expand rapidly,” he said, stressing e-commerce’s power to communicate directly to consumers.

(BigBasket is also said to be looking at launching a data analysis business to offer information on customer trends related to brands.)

Also on imports, Mittal said produce should adhere to global food safety and quality standards but trade with India is “not as tricky” as with the EU and US.

No questions asked returns

BigBasket’s customers mostly order by noon for same day delivery or choose a convenient slot among four options the next day. Insulated boxes are used to maintain the cold chain for temperature sensitive products such as mushrooms.

Its recent acquisition of a a hyperlocal food delivery startup in Bangalore will be act as a springboard to compete with rivals offering hyper-rapid delivery.

Mittal said customers can return produce at the time of delivery if for any reason they don’t like it. The return rate for fresh fruit and vegetables is about 0.5% and the most common reason is a problem with quality caused by transit damage.

Analysis of complaints has led to service improvements, such as in the case of customers finding worms in their cauliflower. Now the company has introduced florets, thus solving the worm problem “and adding value.”

Another big source of complaints was fruit being delivered semi-ripe. Thus, in March, BigBasket set up a ‘freshometer’ – for bananas, mangoes and papayas – on its sales page so consumers know when to eat them. Mittal said this is important because BigBasket tends to ship these fruit to consumers at the semi-ripe stage – to reduce transit damage – so consumers need to know what to expect and when to consumer for best results.

Customers expect Big Basket to be ‘greener’

Mittal said customers’ increasingly expect Big Basket to be environmentally friendly, but e-grocery has its pros and cons in this regard.

On the one hand, all its produce must be pre-packed for home deliveries and till recently only plastic was used. But unlike on retail store shelves, having transparent packaging is not a necessity for home deliveries, so Big Basket is now trying to increase its use of more eco-friendly packaging, such as paper and cardboard boxes. “For example, this season all mangoes were shipped in cardboard boxes,” Mittal said.


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What Europe’s new retail landscape means for fresh produce

Planet Retail’s Bianca Casertano on how Europe’s changing retail sector will affect the fresh fruit and vegetables category.

Planet Retail’s Bianca Casertano on how Europe’s changing retail sector will affect the fresh fruit and vegetables category

Yesterday we shared the Frankfurt-based retail analyst’s analysis of the key shifts in grocery retail in Western Europe. Casertano charted the rise of the discounter and convenience stores, the demographic changes behind the decline of big box stores, and the blurring of lines between hypermarkets, discounters and convenience stores. Here, in part two, read Eurofresh Distribution’s interview with Casertano after her presentation on this topic at the  AECOC Fruit and Vegetable Congress in Valencia in June as she discusses the fresh fruit and vegetables category.

What do these changes imply for the fresh produce assortment in stores?

What is really interesting to know is that the shift from big box formats to small box formats, and online, means a change in product ranges. What you had in the past, this huge volume of fruit and vegetables on offer, will decrease both in volume and product diversity.
In city locations with a small sales area, you have to choose which fruit and vegetables you offer. Normally you choose the convenience oriented things, and focus on less variety. You can’t offer all the exotic fruit and vegetables anymore, as in hypermarkets.
For example, in a hypermarket or in a normal supermarket you can find carrots with some greenery on them. In convenience stores, maybe baby carrots is the product you need, because it’s ready to eat and there’s another package size. The shift towards small, inner city locations will have a huge impact on these product groups.

Could you share an example of innovation you’ve seen?

Demand is growing for pre-prepared and pre-washed products, because people don’t want to spend much time on that. There are some convenience store where you can wash your fruit so you can eat it right after you buy it. I think that is a genius idea. It costs almost nothing and it helps you increase the sale of fruit and vegetables. How often do you enter a store and you would like to have an apple or a peach right now? And some ICA stores in Sweden allow you to make your own smoothie onsite from pre-cut fruit and vegetables you buy there. These are small examples of innovative things that can increase sales for this segment.

What should the sector bear in mind amid the changing retail landscape?

That multi channel is on the rise. They are not straight borders anymore, the formats will merge, and this means more complexity. For retailers that means more investments but these high investments will definitely pay off in the end. Because at the moment, if as a hypermarket operator you say, “No, I don’t want to launch ‘click and collect’, e-commerce is another sector and I don’t want to have to do something with it,” then you will fail, because people expect to at least have the possibility of. Although it’s not profitable for the retailer, they have to react to this trendAlso, because of the demographic changes I talked about, retailers need to go more into the inner city locations, not the outskirts anymore.

Is a move to less loose and more pre-packed product inevitable?

I see a trend in Germany towards more of these products, packaged products, or already washed products, because people don’t have time anymore to prepare their food. They want to have it ready to eat, and therefore I think this will increase in the future.

How might the growth of e-commerce affect producer prices?

As far as the online trend is concerned, I think you can’t offer fruit and vegetables online for a higher price just to get the right margin. Grocery e-commerce is very cost intensive and people won’t pay a higher price just because the system is more expensive. I don’t think that prices will go up, because people won’t accept that. What we currently see in Germany is that prices for groceries have really decreased but people don’t have the feeling, because overall they think they have to spend more for everything, but this is not true for groceries.

You have stressed there are risks in over-generalising and that not every market follows the convenience trend. How does your home market of Germany vary?

In Germany you don’t have so many hypermarkets. you have a high density of discounters. Everywhere you have a small shop within the cities, so if you want to buy something you can buy it anywhere. And in Germany margins for grocery food are so low that it’s very difficult to have a profitable online business for grocery. German shoppers are quite conservative, as well.

A last word of advice?

Suppliers often bank on countries in emerging markets and not on cities. This is a huge mistake because there are so many huge cities in emerging markets, cities with more than 5 million inhabitants.

Just as an example, there are 40 countries in the EU which have less population than Moscow. As a retailer, and also as a supplier, you have to focus on these mega cities, not on the country. This is an area in which Planet Retail has invested significant research.


Read part 1

Photo: (top) Bianca Casertano during AECOC conference, by Roger Castellón

See some of our photos from this year’s AECOC Fruit and Vegetable Congress


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A look inside China’s premium fruit e-tailer Fruitday

E-commerce’s exponential growth in China is highlighted by that of its top online fresh fruit retailer – the premium fruit specialist Fruitday – last year doubled its 2013 turnover to 500 million Chinese yen (€74.6 million).

E-commerce’s exponential growth in China is highlighted by that of its top online fresh fruit retailer – the premium fruit specialist Fruitday – which last year doubled its 2013 turnover to 500 million Chinese yen (€74.6 million).

Fruitday began just six years ago in Shanghai and now has 4 million customers and covers more than 300 Chinese cities. It’s enjoying very strong growth but even so sees potential for much more. After all, explained Fruitday co-founder Loren Zhao, its own sales currently account for only about 5% of the total fresh produce market in China.

Speaking from Beijing, Zhao told ED that another interesting facet of Fruitday’s orders is they are increasingly being made via mobile devices. “About 70% of our daily sales revenue now comes from use of our mobile application,” he said. Peak times for orders used to be 9am, when people first went online in the morning, lunchtime, and then 7-8pm, when they came home. But now they are spread over 24 hours with people also ordering from the bus or subway.

Young people are the main customers

In the last decade, China has enjoyed the fastest e-commerce growth rate in the world. Fruitday’s customers are mainly young people who have become used to getting their fruit online “as long as we guarantee consistent and high quality fruit,” Zhao said. It’s not because they’re lazy or don’t have enough time, it’s because e-commerce became reliable and they trust it to deliver lower prices, higher quality, and safe food. Because parents are often buying fruit for their children, food safety is particularly important in China, he said.

Given food imported into China is already subject to a lot of checks and certification, Fruitday does not feel a need to enforce extra ones, but does guarantee that all its imported fresh fruit – which makes up 90% of the fresh fruit it sells – is imported officially, Zhao said.

How direct marketing makes it easy to manage the supply chain

Among the big pluses in e-commerce is businesses can closely tie their inventory planning and pre-sale marketing to end customers, something Zhao said is the case at Fruitday, which imports its fruit itself. “If we want to import 10 containers of oranges we make a marketing plan so that in one month we can sell all of them. We can easily target customers directly because we don’t rely on other distributors, wholesale markets or supermarkets.”

“But we do need to do a lot of market research and data analysis to ensure our plan is accurate,” he said. That’s very important because while Fruitday has invested a lot in hardware such as warehouse facilities, the reality is fruit – apart from produce such as apples and citrus – generally doesn’t stay fresh long, he noted.

Logistics is a challenge in China and something we “still need to improve,” Zhao said. In Shanghai and Beijing Fruitday has  its own logistics platform but in other cities cooperates with third parties.

Most popular fruits

Fruitday is a supplier of premium fruit and unlike the traditional market for fresh fruit and vegetables in China – where the most popular fruits are table grapes, bananas and apples – its biggest-selling fruits are cherries, kiwifruit and oranges, Zhao said. “Our main customers are people aged 30-35 with kids and they like to try new things.”

Cherries are a new product in China and delicious but expensive in most cities, but through our web site people can easily get them at a lower price, which makes them very popular,” Zhao said, adding that it’s estimated that nearly 7% of cherries imported by China last year were sold by Fruitday.

As for kiwifruit, the entrepreneur said it’s popular for Chinese parents to give their children one every day, so sales are frequent. An estimated 11 million trays of Zespri kiwifruit from New Zealand were imported into China last year and Fruitday is believed to have sold about 650,000 of them – about 6% of the total.

Its oranges are sourced from around the world, including the Sunkist brand from California; from European growers such as in Spain, Egypt and Cyprus; and in the Southern Hemisphere from South Africa, Australia and New Zealand.

Future fruit superstars in China: berries

But while cherries, kiwifruit and oranges are the current “superstars” of sales for Fruitday, Zhao said fruits showing potential to join them are berries, including blueberries, blackberries, raspberries and strawberries. “We see the market just beginning, especially for blackberries and raspberries. We’ve had blueberries in China for 5-6 years but just since last year we’ve been importing other berries (blackberries and raspberries) from Mexico and we can see huge demand.”

Also showing strong growth is the durian, a tropical fruit mainly imported from Thailand and Malaysia “and very popular in China now.” And lemon sales are growing, too, helped by the popularity in China of using it in tea.

Exploring new sources for stone fruit and melons

Zhao said Fruitday has been lucky to be on the scene in the last 2-3 years as China expands the list of fruits that may be imported into the country, such as pears from New Zealand, the US and the Netherlands. Customers are now starting to accept the different taste of these pears, which – unlike the Asian pear predominantly grown in China and eaten when still tough and crisp – are eaten when ripe and soft.

On stone fruit, he said China does not allow much to be imported but the most popular is the plum, which so far may only be imported from Chile and from California. Zhao said this year China will also be open to stone fruit from Australia for the first time but he was not sure yet if only plums would be included or also nectarines, peaches or other stone fruit. ”We have a plan to promote that with Australian growers.”

As for watermelon, China already grows a lot but Fruitday is looking to also source from tropical countries such as Malaysia and Vietnam where the season starts sooner.

Main overseas suppliers: the US, New Zealand and Chile

About 90% of the fruit the company sells is imported directly by it, with its main sources being the US, New Zealand and Chile. Zhao sees strong potential for growth in supplies from Mexico, given how fast Chinese demand for avocado, blackberries and raspberries is expanding. He also said the free trade agreement between China and Southeast Asian nations spells opportunities for increased imports from countries such as Thailand, Malaysia, Indonesia, the Philippines, Vietnam and Laos.

Vegetables: only cherry tomatoes for now

Fruitday may expand into vegetables in the future but for now needs to focus on its advantage in the fruit segment, said Zhao, who explained that the logistics for vegetables are different to that for fruit. While some of the fruit it sells can be stored for 1 or even up to 3 weeks, some vegetables can only be stored for 1-2 days. For instance, leafy greens are the most popular vegetables in China and can easily to rot in just a day, he said.

Fruitday does, however, sell clamshells of cherry tomatoes, which are used for both cooking and eating fresh in China.

Customer buying habits

Fruitday has lot of new customers so the average purchase rate overall is not very high but its longer-term customers tend to make an order at least once every 2 months. “Since we are not providing all products, just premium fruit, maybe they still need to go to the market for vegetables and other fruit and so on, Zhao said. But he said Fruitday can see a trend of its clients coming to rely on it: “They get used to high quality and delicious fruit and then don’t go back to traditional stores.”

“It’s very important for them to try us the first time so we have different kinds of promotion methods but the most useful is to get to try the first time at a low price or even free,” he said. “Any time don’t like it they can return it to us in 48 hours. The fruit is sold by unit numbers rather than weight, for instance 12 apples rather than 1-2 kg, but the size and weight of each type of fruit is consistent – the same colour, size and weight – so customers know what to expect. And Fruitday’s end-to-end service ensures customers receive their fruit within one day of ordering.


This is an article from edition 137 of Eurofresh Distribution magazine. Read that issue online here.

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Sainsbury’s to open ‘dark’ store in 2016

Sainsbury’s is shipping around 250,000 online grocery orders a week and expects that figure to keep rising.

Sainsbury’s is on track to open a dark store in London next year, says CEO Mike Coupe.

At the May 6 presentation of the UK retailer’s preliminary results for 2015, Coupe said opening the dark store – a warehouse dedicated to fulfilling online orders – is part of a build-up in online business capacity.

He said that at 7%, Sainsbury’s groceries online growth was slightly behind the market, but it was not going to chase volume for the sake of chasing volume.

“So our groceries’ online business is all about serving our customers on a day-to-day week-to-week basis, and actually it represents about an 11% growth in order numbers,” Coupe said.

About 250,000 online orders dispatched per week

Sainsbury’s is currently shipping around 250,000 orders a week and expects that figure to keep rising, he said.

“And we’re doing lots of things to continually improve the underlying proposition, whether it’s the functionality of the website, whether it’s the number of substitutions, whether it’s the underlying availability, whether it’s the quality and the freshness of the products that we sell.”

Coupe said the chain now has ‘click and collect’ in about 20 locations and will expand it to 100, including in large out-of-town superstores and some convenience sites with car parks.

“We now offer customers a green van option, so where we are coming to your street you can nominate to have a green van option, that gives you a much more environmentally-friendly and cheaper delivery.

“And we’re anticipating that in London particularly, we’ll get to the top end of our capacity over the next 12 months or so. So during the course of 2016 we do anticipate that we’ll open a ‘dark store’ in London particularly. Now we believe that the business model picking from store is the right model and we still believe that outside London we have the capacity to do that out of our large out of town superstores,” he said.


Source: Sainsbury’s transcript of Preliminary Results 2015 address on May 6, 2015

Read more about dark stores: Inside the supermarkets’ dark stores, The Guardian

E-commerce image: by Giralt via Pixabay (Creative Commons)



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Coop Group focused on sustainability and variety – and online sales

“Sustainability, variety, quality and pricing performance continue to be the attributes by which it positions itself,” Coop says.

Switzerland’s Coop Group says sustainability and variety are its leitmotif for 2015

Despite a difficult environment, total sales for the internationally active retailer and wholesaler last year inched up 1.4% on 2013. And this year it aims to repeat the feat.

“The supermarkets will focus mainly on sustainability and variety in 2015, when the Coop Group again aims to achieve above-average growth through the online formats Coop@home, and and the numerous other online shops,” the Basel-based group said in its 2014 annual report, published February 17.

“The Coop Group also aims to more closely combine bricks-and-mortar and online trading through cross-channel solutions.”
“Sustainability, variety, quality and pricing performance continue to be the attributes by which it positions itself,” it said.

The report shows the group – which claims to have the densest network of sales outlets in Switzerland – ran about 1970 retail outlets (supermarkets and specialist retail formats) and 199 in wholesale last year.

Strong growth in online business

Coop described its online business as a strong growth market, one in which its net sales exceeded one billion francs for the first time last year. “Online shops in the retail sector lifted sales 52.4%, while online sales in the wholesale business grew 10.4%,” it said.

Wholesale and production business areas: shift from cash & carry to wholesale supplies

The group’s wholesale operations are conducted through the Transgourmet Group, while the Bell Group and the Coop manufacturing companies comprise its manufacturing operations.

“In the wholesale/production segment, the potential for further growth lies in integrating activities across Europe. Political developments in Russia, including the weakness of the rouble, and the difficult economic trend in Romania pose a challenge.

“In wholesaling, the ongoing shift from cash & carry to wholesale supplies continues. The Transgourmet Group is systematically pursuing its chosen multi-channel strategy, i.e. combining cash & carry and wholesale suppliers, thereby further boosting wholesale supplies. Transgourmet continues to expand its market position by implementing a transnational own brand strategy,” the report said.

Retail: ‘greatest product range diversity in Swiss food retailing’

The group’s retail business spans the Coop Cooperative with its supermarkets and specialist formats, plus subsidiaries.

In 2014, growth In the retail segment was driven especially by the Interdiscount and formats as well as by the 2014 acquirees Marché Restaurants Schweiz AG and RS Vertriebs AG with the und Schubiger sales brands.

Stocking more than 40,000 items, Coop claims to offer “the greatest product range diversity in Swiss food retailing” with “manufacturer brands, affordable own-label brands, sustainable products or articles for people with allergies or for vegetarians.”

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In 2014, Coop expanded its selection of regional and local products – now sold under its new Miini Region quality seal – and numerous sustainability ranges were extended, for instance the own-label sustainability brand Ünique.

Own-label sustainability brands & quality labels include:

Ünique – Comprising high quality carrots, a vegetable mix and now also cucumbers, Ünique has been marketed in Coop supermarkets since 2014 as an own-label sustainability brand, underpinning Coop’s view “that entire harvests should be utilized and not just parts of them.”

Pro Specie Rara – Parsnips were extremely popular among the vegetables in this line sold by Coop last year. Since 1999 it has been working with the Pro Specie Rara Foundation to maintain the biodiversity of Swiss farming.

Swiss no. 1 in organic

Coop says it is the market leader for organic products, with one in two organic products sold in Switzerland purchased at its stores.

Most of its organic food products are marketed under the Naturaplan own label brand, which posted sales of 1.1 billion francs for organic products in 2014, up 2%. For its organic products, Coop uses the Bio Suisse bud emblem.

Hochstamm Suisse: preserving heritage fruit trees

Since 2008, Coop has worked closely with the Hochstamm Suisse association, which is dedicated to maintaining and fostering standard fruit-tree orchards in Switzerland. These comprise a wide range of fruit varieties and provide habitats for endangered animals. Coop currently stocks around 40 products made entirely from Swiss Hochstamm fruit, including apple and pear juices.

Convenience foods

The Betty Bossi brand of fresh convenience foods – which Coop said is Switzerland’s most successful such range – is sold exclusively by it. In 2014, Coop launched around 150 new Betty Bossi products, for the first time including items to consume warm while “on the go”. In autumn, the “let’s cook” line was launched, comprising pre-prepared vegetables, ready-made sauces and pre-cooked side dishes, making “healthy home cooking easy and without any need to chop and peel.” Coop generated sales of 470 million francs with Betty Bossi products in 2014, up 2.2% on 2013.

Primagusto: first-class fruit and vegetables

Fruit and vegetables with particularly intense flavour are chosen for the Coop own brand Primagusto, which now comprises 42 seasonal products. In 2014, it posted sales of 21 million francs and growth of 26.9%.

Exotic fruit ripening

Among Coop’s manufacturing companies is Banana Ripening Plant Services, with activities including the sourcing, ripening and packaging of bananas and exotic fruit.

Last year it stored and order-picked six banana and three pineapple varieties, in addition to mango, avocado and 42 varieties of dried fruit and nuts, delivering a total of 22,870 tons of bananas, 1,569 tons of dried fruit and 4,256 tons of exotic fruit (pineapples, mangoes, avocados).

The share of bananas bearing the Fairtrade Max Havelaar quality label in the overall banana range rose to nearly 90% and the Banana Ripening Plant increased the share of organic items in its total output to nearly 35% in 2014.

source: Coop Group’s 2014 annual report:

Coop Group key figures for 2014

Total sales: 28,174 CHF million (+ 1.4%)
Net sales: 27,163 CHF million
Net sales in Switzerland: 19,821 CHF million
Net sales abroad: 7,341 CHF million (48.7% generated in Germany)
Net sales from online shops: 1,124 CHF million (+24.1%)
Profit: 470 CHF million (1.7% of net sales)
Employees: about 77,000 (46,270 in retail)
Based in: Basel, Switzerland
Parent: Coop Group Cooperative

Number of sales outlets
Retail: 1,971 (+38)
No. of Coop supermarkets: 837
Wholesale/Production: 199

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Read the report here.



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Increased citrus imports and online sales in China

The majority of China’s imported citrus is sold through major retailers, convenience stores, fruit stalls, high-end hotels, restaurants and e-commerce.


Ongoing growth in China’s citrus imports is fuelled by strong thirst for fresh – and thus counter-seasonal – fruit, reports the Global Agricultural Information Network (GAIN). And the main suppliers – South Africa, Australia and the US – are also benefiting from the increasing cost of locally-grown fruit, GAIN said in its 2014 citrus annual for China.

Among its forecasts for the 2014/15 marketing year:

Orange imports: to rise 13% on previous year to 100,000 tons (South Africa then the US the main suppliers);

Mandarin imports: to rise more than 30% to 24,000 tons (South Africa & Australia the main suppliers);

Grapefruit imports: to rise 23% to 32,000 tons (imports from South Africa have grown to meet higher demand as more consumers become aware of grapefruit’s nutritional benefits).

Online fresh produce sales up 41% to more than $930 million

GAIN also said the majority of China’s imported citrus is sold through major retailers, convenience stores, fruit stalls, high-end hotels, restaurants and e-commerce.

It noted e-trade platforms developed fast in 2014 and though the market share is still small, using they are increasingly popular in China, where revenue from online fresh product sales rose nearly 41% in 2013 to more than $930 million.

“Selling fresh fruit online has continued to expand rapidly over the past 4 years. For example, Fruit Day was the first company to develop an online website to sell fresh fruit products in 2009 followed by Guo Ku Wang ( and Tou Tou Gong She ( also provides fresh-cut products online,” GAIN said.

Shanghai the preferred entry port

Guangzhou is China’s biggest fruit import distribution hub but importers increasingly prefer the next biggest, Shanghai, because of domestic transportation costs and other cost concerns.


Read the report

Image by NuclearVacuum via Wikimedia Commons