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A Puzzling Phenomenon

Declining Fruit and Vegetable Consumption Despite


Increasing Health Consciousness
Rabobank I ndustry Note #384 - May 2013
Page 1/7 | Rabobank Industry Note #384 - May 2013
Rabobank I nternational
Food & Agribusiness
Research and Advisory
Cindy van Rijswick
cindy.van.rijswick@rabobank.com
+31 30 71 23830

www.rabotransact.com
www.rabobank.com/f&a

Contents
Introducing the puzzling
phenomenon 1
Declining fruit and
vegetable consumption 1
A mix of factors determines
fruit and vegetable
consumption 2
Closing the gap between
what consumers say and do 5
Conclusion 7

Health is currently a hot topic. Government bodies are encouraging people to
eat more fruit and vegetables as part of a healthy diet. At the same time,
figures show that western European and US per capita consumption levels of
fruits and vegetables have been declining lately. The decline in consumption
is due to a complex combination of factors, including changes in income and
perceived costs, the increasing competitiveness of processed foods and
consumers cravings for convenience. A combination of strategies, focused on
consumers, products and the company itself, will be most beneficial to turn
the tide.
Introducing the puzzling phenomenon
Although health is generally considered one of the major trends in food consumption,
consumers growing health-consciousness has not yet resulted in increased consumption of
fruits and vegetables
1
. In more than half of the European countries as well as in the United
States (US), intake of fruit and vegetables is still below the World Health Organisations
recommended minimum level. Fruit and vegetables are important elements in a healthy diet
as they are sources of several essential nutrients, such as vitamins A and C, potassium and
folic acid. Diets rich in fruits and vegetables are associated with decreased risk of various
diseases. Furthermore, eating fruit and vegetables can play a role in helping people reach
and/or maintain a healthy weight. All of these potential benefits are being promoted to the
general public as well as specific target groups (e.g. children and low-income groups) by
governments, health bodies and industry associations. Examples of national campaigns
include 5 am Tag in Germany, 5 a day in the UK and the US, 5 al dia in Spain and 2+2
in the Netherlands. At the same time, the availability of fruit and vegetables has been
improving, with a growing diversity of fruit and vegetables becoming available year-round
via international trade and improvements in breeding, growing, storing and packaging.
Furthermore, more options to improve the convenience of eating and preparing fruit and
vegetables have been introduced, such as washed and bagged salads, fresh-cut stir-fry
mixes and snack vegetables.
However, in many countries the combination of health promotion, trade expansion and
marketing innovation has not resulted in the expected increase in consumption. In fact, the
average per capita fruit and vegetable consumption has actually decreased in the US,
western Europe and Japan. The vast amount of literature available on factors influencing
consumers fruit and vegetable consumption shows different possible explanations, which
indicates the complexity of this phenomenon. While the diversity of determining factors may
make it complicated to turn the tide of stagnating or even declining consumption, there are
opportunities that players in the fruits and vegetables industry should make use of.
Declining fruit and vegetable consumption
From 2006 to 2011, total per capita consumption of fruit and vegetables stagnated in most
advanced economies (see Figure 1). In the preceding five-year period, there was still a
slight growth. While there are huge differences in both the volumes and types of fruits and
vegetables consumed among the various countries, the overall trend has not been positive
for fresh or processed fruit and vegetables. Countries with decreasing consumption levels
include large consumer markets within and outside of western Europe, such as Germany,
France, the UK, the US and Japan.

1
In this note, fruits and vegetables
include fresh, processed and fresh-cut
fruit and vegetables, but exclude
potato (products).


Page 2/7 | Rabobank Industry Note #384 - May 2013
A Puzzling Phenomenon
Figure 1: Declining per capita fruit and vegetable consumption,
2001-2006 vs. 2006-2011
CAGR (percent)

Note: Fruits and vegetables include fresh, processed and fresh-cut fruit and
vegetables.
Source: Euromonitor, Rabobank, 2013
A mix of factors determines fruit and vegetable consumption
Identifying factors that explain changes in fruit and vegetable consumption can be
extremely complicated as consumption is actually mainly affected by the interaction of
multiple factors. A vast amount of research (and meta-studies) has been conducted on the
factors that influence consumers fruit and vegetable consumption. Four categories of key
influencing factors can be identified from a review of the literature, namely, individual
(biological and psychological), socio-demographic, economic and environmental (see Figure
2).
Figure 2: Factors influencing fruit and vegetable intake

Source: Rabobank, 2013
A literature review shows that a large number of factors apply to fruit and vegetable
consumption, but only few can explain a trend over time.
2
After all, certain factors, like
gender, have either not changed or hardly changed over time. Therefore, we have selected
the most pertinent factors to explain our observed phenomenon: the economic factor
(income and perceived price changes), and a combination of the individual and the
environmental factors (increasing competition from processed foods and the craving for
convenience).
Impact of declining incomes and perceived increased costs
An obvious explanation for declining fruit and vegetable consumption in recent years could
be consumers declining disposable incomes. This is partly the case: in certain countries,
falling disposable incomes, sometimes accompanied by increasing prices, are related to
decreasing consumption volumes. On a household level, there is a clear relationship
between income and fruit and vegetable intake. Many research papers and government

2
See for example Pollard, C. (2008),
Determinants of fruit and vegetables
consumption among adults in
Perth, Western Australia, Thesis
Curtin University of Technology;
EUFIC (2005) The Determinants of
Food Choice, reference paper of The
European Food Information Council;
Guthrie, J. (2004), Understanding
Fruit and Vegetable Choices:
Economic and Behavioral Influences
Economic Research Service, USDA.
-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
2001-06 2006-11
Age
Gender
Family composition
Ethnicity
Culture
Social class
Marital status
Social support
Encouragement to eat F&V
Parenting style

Socio- demographic factors
Hunger
Appetite, taste
Knowledge
Self-efficacy
Mood, stress, guilt
Palatability experienced
(in)convenience experienced
Attitudes and beliefs about food
Food preparation skills

I ndividual: biological
and psychological
Environmental
Conflicting information on health
Competing products
characteristics
Out-of-home food consumption
Application, use (snack, meal)
Promotion and marketing
Weather circumstances
TV watching
Availability
Quality
Economic
Income
Costs of fruits and vegetables
Costs of substitute products
Time available

Page 3/7 | Rabobank Industry Note #384 - May 2013
A Puzzling Phenomenon nutritional studies have shown that low-income groups usually consume fewer fruits and
vegetables than high-income groups (see Figure 3). In its annual report of household
purchases of food and drink, UK Department for Environment, Food and Rural Affairs
(DEFRA) claims that falling disposable incomes and rising food prices have been affecting
consumption since 2007, strongly reducing food affordability, particularly for the lowest
income households in the UK.
Figure 3: Fruit and vegetable intake linked to income level
100=average consumption level

Note: Data are volume-based; UK data is from 2010 and US data is from 1999-
2002.
Source: DEFRA, 2012; Rabobank, 2013; USDA, 2009.
Correlation coefficients can give further insights as to whether there is a relationship
between annual real household disposable income changes and changes in fruit and
vegetable consumption. Using OECD figures for the last ten years, we found positive
correlations for the UK (r=0.28) and Australia (r=0.25). For France, the US, Spain and
Japan, higher (r ranging from 0.3 to 0.7) correlation coefficients were found between
income change and fruit and vegetable consumption. For Germany, we found no correlation.
This means that part of the changes we observed in fruit and vegetable consumption can be
explained by income changes. In times of income pressure, consumers become more
susceptible to price fluctuations, although consumers perception may deviate from factual
information. This could have been detrimental to fruit and vegetable consumption as a
common misperception among consumers is that unhealthy food is cheaper to eat than
healthy food.
3
In the UK, consumers have cut back on fruit and vegetable purchases since
the outbreak of the economic crisis, even though prices of fruits and vegetables have not
outpaced food prices in general. Between 2006 and 2011, in both the EU and US, average
consumer prices for fruits and vegetables in fact increased less than prices of the total food
category (see Figure 4). This also holds for Germany, France and the UK. Literature on the
price elasticity of demand shows that demand for fruit and vegetables is rather inelastic at
about -0.5 percent.
4
Higher but still inelastic values are found for categories including out-
of-home consumption, beverages and meat. Price increases in other categories can
influence the fruits and vegetables category. DEFRA for example, found that price increases
in alcoholic drinks and dairy have resulted in lower demand for fruit and vegetables in the
UK.
5

Figure 4: Fruit and vegetable prices increased less than food prices
Index (2005=100)

Source: Eurostat, 2013; USDA, 2013
0
20
40
60
80
100
120
140
Low Middle High
US income
1st 2nd 3rd 4th 5th

3
Carlson, Andrea, and Frazo,
Elizabeth. (May 2012). Are Healthy
Foods Really More Expensive? It
Depends on How You Measure the
Price. EIB-96, USDA, Economic
Research Service.
4
Andreyeva et al. (2010) The Impact
of Food Prices on Consumption: A
Systematic Review of Research on the
Price Elasticity of Demand for Food.
American Journal of Public Health
100.2; Dong, D. and Lin, B. (2009).
Fruit and Vegetable Consumption by
Low-income Americans: Would a Price
Reduction Make a Difference?
USDA/ERS.
5
DEFRA (2013) Family Food 2011.
UK income quintile
90
95
100
105
110
115
120
125
2006 2007 2008 2009 2010 2011
Food
F&V
Trend line food
Trend line F&V
US
90
95
100
105
110
115
120
125
130
Food
Fruit
Vegetables
EU
Trend line food
Trend line fruit
Trend line vegetables

Page 4/7 | Rabobank Industry Note #384 - May 2013
A Puzzling Phenomenon
Increasing competition from processed foods
Features of competing foods play an important role in whether or not consumers choose to
eat fruit and vegetables. Processed foods have become a strong competitor for fruits and
vegetables for different reasons: availability, taste, marketing, health and wellness, product
range and convenience.
For many consumers, it has become more and more difficult to resist processed food
products that have become increasingly available, both physically and in advertisements. It
seems that advertising affects food choices beyond brand loyalty, particularly the promotion
of high-calorie, low-nutrient food and beverages. Several studies have investigated the
impact of marketing conducted by the food and beverage industry on food choice.
6
As the
number and variety of commercial advertising and marketing channels and vehicles has
increased over the years, marketing of competing foods may be a key factor in explaining
decreased fruit and vegetable consumption. Foods with low nutritional value are not only
promoted on TV, billboards, radio, the internet and magazines but are also visible in schools
(vending machines), shopping malls, train stations, theatres, sporting events, airports and
many other public places. For the fresh produce industry, it is extremely difficult to match
the sophisticated marketing efforts of the processed food industry as many products are
sold unpackaged and unbranded. For example, when consumers are looking for a snack on
the go, packaged processed food is often the only option available. Furthermore, the
industry is rather fragmented, localised and operates with low margins.
If consumers do opt for a healthy choice, they may be tempted by processed foods in the
so-called health and wellness category, which claim to improve health with expressions such
as 0% fat, diet or containing vitamins. These products have considerably outpaced
market growth of fruits and vegetables (see Figure 5). Products that suggest they contain
real fruit or vegetables by showing fruit images or terms on the packaging or in
advertisements, make up another category of processed food and beverages luring
consumers away from the fresh category. In both Europe and the US, research has been
done to find out how much fruit was actually contained in some food and beverages using
fruit images or references to fruit on the packaging.
7
The US study found that two-thirds of
the products examined contained no fruit or only a minimal amount. In the European study,
this was half of the products tested.
Figure 5: Relative strong growth in health and wellness food
category, 2006-2011
CAGR (percent)

Note: Packaged food figures based on value
Source: Euromonitor, Rabobank, 2013
Importance of (in)convenience
Convenience definitely works as a marketing tool and has become an increasingly important
factor in food choice. As previously discussed, convenience is one of the attractive attributes
of processed foods. The popularity of prepared (i.e. washed, cut, diced, sliced and
packaged) fruits and vegetables, despite higher price levels compared to whole fruits and
vegetables, shows that convenience also works in the fruits and vegetables industry (see
Figure 6). The strong sales growth of so-called snack vegetables is another example. Recent
research from IRI shows that expenditure on snack vegetables (mainly snack tomatoes,
cucumbers and bell peppers) in the Netherlands has increased 337 percent between 2009
and 2012.

6
McGinnis, J. Michael et al., Eds.
(2006). Food Marketing to Children
and Youth: Threat or Opportunity?
Committee on Food Marketing and the
Diets of Children and Youth.
Washington, D.C.: National Academies
Press.
7
European study: Freshfel (2010)
Where is the fruit? Freshfel Europe,
September. US study: Mikkelsen,
Leslie et al. (2007), Wheres the fruit?
Fruit Content of the Most Highly-
Advertised Childrens Food and
Beverages, Oakland, CA: The
Prevention Institute, April.
-2 0 2 4 6 8 10 12 14
US
Western
Europe
Japan
Australia
Total packaged food and soft drinks category
Packaged health & wellness food & drinks
Fruit and vegetables

Page 5/7 | Rabobank Industry Note #384 - May 2013
A Puzzling Phenomenon However, lack of convenience is often mentioned as a barrier to consuming adequate
servings of fruit and vegetables.
8
There are many factors that contribute to the increased
demand of convenience foods, such as family composition (smaller households), increased
working hours, decreasing food preparation skills and knowledge, consumption of TV
dinners and individual attitudes and values towards meal preparation. Convenience with
respect to food choices includes dimensions of both time and effort savings. This relates to
different stages in the food preparation and eating process: planning, purchasing,
storing/handling, preparing, cooking, eating, waste and clean up. Fruits and vegetables are
often at a disadvantage in many of these respects, compared to processed foods.
Figure 6: Fresh-cut fruit and vegetables winning market share,
2006-2011
CAGR market value (percent)

Source: Euromonitor, Rabobank, 2013
Closing the gap between what consumers say and do
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 towards healthy eating and eating more fruit and
vegetables. But at the same time, income pressure and increasing perceived costs, the high
attractiveness of competing food and beverages and the need for convenience are among
the mix of factors that have caused a decline in actual fruit and vegetable consumption
levels.
Figure 7: Seizing the opportunity to increase fruit and vegetable
consumption

Source: Rabobank, 2013
Rabobank has identified three clusters of tactics to increase fruit and vegetable consumption
(see Figure 7). The first cluster is consumer-centric. These tactics are directed at influencing
the individual consumer. The second cluster is product-centric. These measures are most

8
Wales, M.E. (2009), Understanding
the role of convenience in consumer
food choices: A review article. Studies
by undergraduate researchers at
Guelph 2.2: 40-48.
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
USA Western
Europe
Japan Australia
Fresh fruit and vegetables Processed fruit and vegetables
Fresh-cut fruit and salads


Consumer

Story-telling
Bonding with consumers
Sophistication and creativity in
marketing
Company

Dedicated supply chain
Cooperation with stakeholders:
Let them tell the story
Reputation
Products

Product differentiation
Category management
Convenience: packaging, snacks, taste, ready-to-eat

Page 6/7 | Rabobank Industry Note #384 - May 2013
A Puzzling Phenomenon suited to affecting environmental and economic factors that determine fruit and vegetable
consumption. The third cluster focuses on the company, particularly its position within the
value chain and society. These tactics can be used to impact certain socio-demographic
factors.
Creative marketing, storytelling and bonding as consumer-centric tactics
Most consumers are already aware that fruit and vegetables are healthy and governments
may be the best vehicle for reminding the public of the importance of a healthy diet.
Therefore, the fruits and vegetables industry should focus their resources on informing
consumers about the convenience, taste, enjoyment and versatility of fruits and vegetables.
Fruit and vegetables players could even team up with third parties from the food and
beverage or foodservice industries when developing and marketing the attractive
propositions. Food and beverage companies, restaurants and marketers have underutilised
creativity and resources to devote to developing and promoting foods that support a healthy
diet. Furthermore, social media offers an affordable method to make use of mass media.
However, giving away samples and sponsoring events are still useful ways to get consumers
attention. For example, last year, the launch of the new apple brand Joya was geared
towards adventure-seeking adolescents. By sponsoring BMX-riders, skateboarders and
snowboarders, Joyas presence at sporting events and on social media sites geared towards
teenagers, attempted to capture some of the teenage market segment that has often been
neglected by the fruits and vegetables industry. Another example, intended to gain more
insight and more affection from the increasingly puzzling consumer, is Unilevers project
Close2Consumer, where one hundred marketers stayed in various consumers homes for
one day to find out what is driving these consumers decisions.
Product-centric tactics include product differentiation, category management and
convenience
With the wide range of fruits and vegetables currently available at a wide range of prices,
there should be viable options for every type of consumer, regardless of budget. As fresh
fruits and vegetables are among the most wasted foods due to perishability and may peak
in price out-of-season, consumers can save money and reduce waste by adding preserved
and frozen varieties to their shopping baskets. The industry has already implemented many
good initiatives to supply different products for different market segments. Advice and
support to retailers category management may help to increase sales of these products. In
the lettuce category, a strong segmentation has emerged: in addition to conventional
whole-head iceberg lettuce there are a number of fresh-cut options available, from
valuepacks of fresh-cut iceberg lettuce to premium-priced baby-leaf specialty lettuces.
Raising convenience or reducing inconvenience is a major opportunity for the fruits and
vegetables industry. Sometimes relatively simple measures can be very successful. For
example, Belgian chicory growers have introduced packaging that allows the chicory to be
heated directly in the microwave without removing the packaging or undergoing any other
preparation. In the tomato segment, snack tomatoes, such as Tommies, have become very
well-appreciated by consumers for their sweet taste, convenient package and readiness to
eat. Furthermore, Natures Pride, an importer and exporter of exotic fruits and vegetables,
has increased its turnover by nearly 70 percent in four years time, mainly by supplying
ready-to-eat ripened avocadoes and mangos. The berry category in both the UK and the US
has grown strongly by presenting consumers with an attractive proposition and living up to
their expectations. Increasingly, berries are sold as a treat or snack, smartly promoted at
sporting events and packaged differently for different consumer segments (e.g. in portioned
cups). Breeders, growers, distributors and retailers have closely cooperated to offer an
attractive and tasty range of berry products.
Control, cooperation and reputation are key company focused actions
In order to reach a consistent high level of taste and quality, it is of key importance for
value chain partners to work closely together. Very basic features, such as quality and
freshness, can still be improved (e.g. by reducing the time to market or choosing the
tastiest varieties). Keeping inferior quality products off the market is also important as
disappointing experiences can discourage consumers from buying these products again.
Zespri kiwifruit and Chiquita bananas are good examples of products with consistently high
quality levels. This is mainly the result of a short dedicated supply chain in which the brand
owner is in control.


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food and agribusiness. It is one of a series of publications undertaken by the global department
of Food & Agribusiness Research and Advisory.
2013 - All Rights Reserved.


Page 7/7 | Rabobank Industry Note #384 - May 2013
A Puzzling Phenomenon In order to change cultures and traditions with respect to fruit and vegetable consumption
in the long term, a good reputation of both the industry players and their products is
important. For this reason, an increasing number of leading industry players are becoming
involved in corporate social responsibility (CSR) projects. Cool Fresh International is one of
the many companies with a list of CSR projects, mainly in their fruit sourcing countries,
such as South Africa and Namibia.
Conclusion
Although health consciousness continues to rise, the average per capita consumption of fruit
and vegetables has actually decreased in the US, western Europe and Japan. In our attempt
to get to the bottom of this phenomenon, we found that a variety of factors in the socio-
demographic, economic, environmental and individual sphere have contributed to the
consumption decline. The most important factors include income and perceived food price
changes, growing competition from processed foods and consumers increasing craving for
convenience. It is up to public bodies (e.g. governments, schools, health institutions) to
inform consumers about the health benefits of fruit and vegetables. It is up to industry
players to increase the attractiveness of fruit and vegetables in order to bring to an end the
declining consumption. Companies should do whatever they can to improve the overall
reputation of fruit and vegetables and the fruit and vegetable business, especially by
cooperating more closely with value chain partners as well as competitors to guarantee food
safety and quality, and by maintaining sound production and trading practices.
Furthermore, companies can use various product-centric tactics to provide the right range
of products: products of different types (either processed or fresh) for different eating
moments (e.g. breakfast, snack, lunch, dinner) at different price points. Taste, convenience,
enjoyment and versatility are key in this regard. However, it is just as important to tell and
sell the story of fruit and vegetables to the world. Scale, creativity and higher profit margins
could all help to achieve that goal.