Fruit products demand continues to dip, says report
to decline marginally, despite industry efforts to spice up the
category through ingredient and packaging innovation, according to
a new report by Packaged Facts.
Part of the reason for sagging sales has been the high sugar content of many of these products, which held them back especially during the low-carb craze, reveals Fruit Products in the US.
And the steadily growing trend to consume fresh fruits is also a major reason for the stagnant fruit products market.
Categories included within the scope of the report are packaged fruit, fruit confectionery and fruit juices. Out of these, packaged fruit - including canned, dried and frozen fruits - was the only segment to witness growth from 2004 to 2005. But the 5 percent growth of the segment was not sufficient to stave off sagging sales in other sectors.
During the same period, fruit juices, such as refrigerated, bottled, canned and frozen, declined by nearly one percent. Jams, fruit bars, fruit rolls and other fruit confectioneries declined by three percent.
The total fruit products market was estimated to be worth $21bn in 2005, a negligible growth of 0.1 percent since 2004. The fruit products market declined marginally from2001 to 2004 due to the low-carb trend that peaked in 2003-2004, a period when consumers perceived fruit products to be high in calories and thus avoided their consumption.
The fruit juice category recorded sales of $9.8bn in 2005, down from $9.9bn the previous year. Refrigerated juices and drinks, the largest sub-category holding a 40 percent share of the market, saw sales grow by $97.2m in 2005.
Refrigerated smoothies and bottled cherry juice were among the fastest growing segments in the fruit juice category. Sales of these products were driven by a greater consumer health consciousness, said the report. This was also the driving force behind the "tremendous" growth in the vegetable juice/cocktail segment.
"Items such as fresh fruit smoothies, cherry juice, and other health-infused products, have clearly won favor with consumers and are moving product developers in the right direction. Yet consumers have been slow to respond to even the most exciting promotional and health campaigns, and changing their eating habits to include more fruit products will continue to be an uphill battle," said Don Montuori, publisher of Packaged Facts.
The packaged fruit category, which accounts for around 18 percent of the overall market and which was the only category to register any growth, recorded sales of $2.5bn in 2005, up from $2.3bn in 2004. This growth was attributed to the trend toward consuming easy to carry and healthy fruit products. Dried fruit was the second largest sub-category, and posted a 9 percent sales increase to reach $521m in 2005.
Canned or bottled fruit products - popular due to their portability and ease of consumption - saw sales increase 3 percent to $1.6bn in the period.
The fruit confectionery category recorded sales worth $1.3bn in 2005, dipping 3 percent from 2004 sales of $1.4bn. Part of the reason for this decline was the rising demand for fresh fruit as a snack, which hampered the demand for processed fruit products such as fruit confectionary.
Jams, jellies, and preserves recorded sales of $621.9m, occupying the largest share of the category - 45 percent. Frozen fruit bars showed the highest decline in the category.
Factors affecting the performance of the fruit products market include obesity, particularly childhood obesity, which has become a major driver of an increasing demand for fruit and fruit products. Convenience is also key, with conveniently packaged and easy-to-hold and eat fruit products, such as single-serve fruit juices, fruit rolls/bars/snacks, and dried fruit helping sales in the fruit products market.
Organic and natural products are also increasing in popularity, as well as healthy or fortified fruit products. Exotic flavors, kids' products and products targeting Hispanics also hold potential, said the report.
The current market leaders in the US fruit products market are PepsiCo, with a market share of 13 percent, followed by Coca-Cola with a 12 percent share. Altria Group/Kraft Foods came in third, with a 7 percent market share. Other major players include Cadbury Schweppes, Ocean Spray, Welch Foods and Nestle.
Packaged Facts estimates the overall fruit products market will continue to be stagnant through 2010. The market is projected to decline at a 0.2 percent rate from 2006-2010, standing at $20.6bn by 2010. However, it is projected that the year-on-year sales from 2006-2010 will decline at a lower rate as compared to each previous year.
The report forecasts the fruit juice category will stand at $14.4bn in 2010. The category is projected to continue its decline from 2006-2010. Continuing its growth, the packaged fruit category is estimated to reach $3.9bn in sales by 2010. The fruit confectionary is projected to continue its decline from 2006 to 2010, with sales estimated at $2.3bn in 2010.
