According to Nielsen data, 2020 ended with an overall value equal to €814 million, i.e. -7% (value) and -4.5% (volume) compared to 2019, for the fresh-cut segment. These figures reflect the difficulties that characterized quite a unique year which has put the sector to the test.
During the first lockdown, fresh-cut companies made an extraordinary effort to guarantee regular supplies to stores, conscious of the crucial and essential role the agricultural and food chain played as a whole. As for phase II, it enabled a slight recovery in volumes towards the end of the summer, but it also highlighted two considerable problems - the gradual recovery of the H&R channel and the increase in fixed costs connected with all the new safety measures applied. What is more, the segment also had to deal with a change in consumer habits.
"The pandemic undoubtedly changed consumer habits. Some products were particularly affected, such as ready-to-eat bowls or extracts," commented Cristiano Detratti, general manager at Ortoromi, part of Unione Italiana Food's fresh-cut group. The frequency of visits to stores saw a considerable drop during lockdown and has not gone back to the levels prior to the pandemic. What is more, the fact that people continue working from home means ready-to-eat products are still suffering, as they were mostly purchased by 'office' workers.
"Despite the difficulties, all companies adapted to this new reality, which has forced them to adopt new approaches and anticipate the market where possible to meet the needs of current consumers while still selecting the best raw materials and keeping an eye on sustainability."
While the sector recovered slightly in September, the second wave and subsequent Ministerial provisions that lasted until the end of the year led to a new slowdown. Luckily, 2021 started on the right foot: bagged salads, i.e. the leading product with a value of €653 million, registered a -2.2% drop in January, a net recovery from the -4.3% of December.
In order to continue performing well throughout the year despite the evolution of the pandemic, multiple aspects must be kept into consideration, including the satisfaction of final consumers and the transition towards a sustainable, healthy and fair system as indicated by Farm to Fork.
"Sustainability has become a central element in every area and sometimes it can be used improperly. True sustainability is the capability of balancing social, economic and environmental aspects and we believe it is the only way for companies to keep existing," commented Giancarlo Boscolo Sesillo, president of Cultiva, a company part of Unione Italiana Food.
"The fresh-cut segment was created based precisely on these requirements thanks to the specifications and certifications necessary to be able to operate with modern distribution chains. In addition, it can be highly competitive, as recent market analyses* revealed that 2 Italians out of 3 prefer sustainable products and 7 out of 10 are even willing to change stores in favor of those that meet real sustainability requirements. Making this concept part of company strategies will definitely be the key to increase volumes in a category that boasts very high penetration indexes (approx. 80%) yet low average consumption and a purchasing frequency heavily penalized by the new habits introduced by the pandemic," concluded Boscolo Sesillo.
* Source: Osservatorio Packaging del Largo Consumo – by Nomisma in cooperation with SpinLife – 2020