The international berry industry recently met at the Global Berry Congress. For the first time since the event was organized, the sentiment among the participants was mixed rather than very optimistic. Inflationary pressures for producers and distributors are not expected to end anytime soon. On top of that, consumer demand is likely to be affected by the inflationary environment. These challenges are prompting the berry industry to make the necessary changes to future-proof the berry sector by focusing on quality rather than quantity in the future.

Growth, growth, growth

In previous years the discussions focused mainly on the expanding berry market. But where in the last decade the question was how supply could keep up with demand, now the question is how to make demand keep up with supply. The supply of fresh berries on the world market grew again in 2022 (see Figures 1 and 2). Blueberry exports in particular show a constant increase that will continue in the coming years, driven by the expansion of production in countries such as Peru, Mexico and Morocco. Global production and exports of raspberries and blackberries are less stable, but still show no signs of stabilizing. The slightly more mature strawberry market has been more stable and is expected to remain so for years to come.

Rising concerns about demand

The general concern that we perceived among the congress participants was the decrease in the demand for fresh berries in the coming year. Consumers around the world have begun to tighten their portfolio strings as disposable income is heavily affected by the inflationary environment, especially in Europe (see Figure 3). Based on both historical experience and recent consumer surveys, we expect consumers to begin trading lower. The first signs that consumers are looking for value are already visible. Discount stores are gaining market share in a number of countries and overall fresh food purchases, including fresh fruit, are down in 2022. But how this will affect berries next year is still difficult to estimate. During the global financial and economic crisis of 2008-2009, berries remained a niche category and their rapid growth began only a few years later. What we do know is that income clearly influences purchases of fresh berries. Therefore, a large part of berry purchases will not be greatly affected because the disposable income of wealthier consumers who tend to buy berries is relatively less affected. What we also know is that berry purchases are quite responsive to price changes.1 . Consequently, other, more inelastic types of fruit might have more of an advantage. In the first half of 2022, strawberries were among the best performing fresh fruit categories in terms of sales volume in both the Netherlands and Germany (see Figure 4). This was mainly due to the relatively low price levels in 2022. At the same time, retail sales of apples fell even despite the lower price levels compared to the previous year. This could indicate that price is not the only deciding factor for shoppers, but that other factors such as convenience, perceived health benefits, and taste are also important. We expect these factors to continue to drive the berry market for the long term, even beyond the current cost of living crisis.

Changes for the best expected in 2023 and beyond

No matter how challenging the current situation is, it can also be seen as a timely wake-up call for the berry sector. The weakening market situation will cause the berry sector to shift from a “focus on more” to a “focus on more with less” and finally to a “focus on producing better with less”. That means a shift from producing higher volumes with correspondingly greater use of inputs, to producing better quality with fewer resources and less environmental impact.

Several participants showed examples of how they are already changing their business for the better. Growers around the world think twice before expanding their acreage and often prefer to replace old varieties with new, higher quality varieties. These new varieties can improve labor productivity or the consumer experience, for example. Additionally, several South American berry players have started production in Europe, closer to consumers, often improving freshness and reducing transportation costs and climate impact. Supermarkets in Europe and the US are introducing premium berry lines with a premium (consistent) taste experience. Larger pack sizes are being introduced to reduce the use of plastic. There are also advances in the development of harvest automation solutions. And each time more,

[1] Sobekova, Kristina, Thomsen, Michael, and Ahrendsen, Bruce. Market trends and consumer demand for fresh berries. Applied Studies in Agribusiness and Commerce 7 (2013): 11-14. 10.19041/Abstract/2013/2-3/1.