No tears for onions - Harvest to Home update

The below article, written by Andrew Wang, FMCG Insight Analyst, provides the latest insights and data into the onion industry, now available via Harvest to Home, an analytics tool, developed by Nielsen and Hort Innovation, leveraging the investment of levy funds for onion growers.

Onions’ multi-layered skin has helped it endure a poorer-performing season in 2017, with stronger sales in the past 52 weeks ending 15 June 2019. The onions category increased in dollar sales growth (3.8%) and recorded relatively flat volume sales (1.7%). This performance was in line with total dollar sales growth for vegetables (3.4%) and relatively flat volume sales (-1.4%). Brown onions continue to be the most popular type, accounting for two-thirds of total onion dollar sales and having the highest dollar sales growth (5.3%) in the last 52 weeks. Onions are a popular and staple ingredient with nine-in-ten households purchasing every year.

Strength in numbers

Pre-packed onions were a key factor driving the increase in onion dollar and volume sales in the last year. Roughly half of all onions sold were pre-packed.  Pre-packed onions showed strong growth in dollar (13.4%) and volume sales (10.3%). Loose onions, on the other hand, saw a decline in both dollar (-3.3%) and volume sales (-5.0%).

Pre-packed onion growth was the result of an increase in the number of pre-packed buying households (up 4%), along with an increase in their average spend (up 8.9%) and average volume purchased (kg) (up 5.9%). In addition to these factors, 92.8% of pre-packed onion dollar sales came from major retailers; who accounted for 73.7% of all onion dollar sales.

Different layers of retailers

With almost three-in-four households purchasing onions from major supermarkets, it continues to be the main channel for onion sales and is the only retailer channel that saw an increase in dollar sales across all varieties of onions.

Other supermarkets, greengrocers and specialty markets declined in dollar sales driven by a fall in average prices by -11.6% and -7.5%, respectively. However, the lower average price per kg helped drive volume sales in these channels by 11.7% and 4.6%, respectively.

While brown onions and red onions were purchased predominantly through major supermarkets, other onions (such as white onions) were undertrading significantly in major supermarkets and overtrading in other supermarkets, greengrocers and specialty markets.

Understanding onion buyers

Over the past year, couples over the age of 35 accounted for almost half of total onion sales and the key driver of growth. Single households aged over 35 years,  under traded the most, with attitudinal data revealing one of the main barriers to purchasing more onions is wastage - suggesting that single-person households may find it difficult to cook a meal for one using onions. Families with children under the age of 11 are also under-represented in onion sales and declined among other families in the last 52 weeks.

Attitudinal data also showed that seven-in-10 households tend to choose variety over pricing; and 80% of households purchase onions to use as part of a recipe. Three-in-10 onion buyers purchased only one variety and accounted for only 17.1% of total onion dollar sales in the past year. This dynamic suggests an opportunity to target existing onion buyers who only purchase one type by introducing a range of recipes that encourage cross-variety purchases. The possibility of introducing a new mixed variety pre-pack may also help target and convert one-type onion buyers and continue the growth of the onion category.   

Opportunity for growth

Although onions are a staple ingredient for many Australian households, there is still an opportunity for growth. Broadening the reach and targeting audiences on social media platforms with recipes, furthermore, having point-of-sale information in major retailers to help educate buyers on how to use smaller, sweeter tasting onions may create further opportunities. With pre-packed onions being one of the key drivers for onion category growth, the addition of a variety pre-pack with two to three different varieties, may also help target onion buyers who currently purchase only one type of onion.

 Notes:

• Major supermarkets are defined here as the sum of Woolworths, Coles and Aldi
• Other supermarkets are defined here as all other full-service supermarkets

Sources:

• Nielsen Homescan 52 weeks to 15/06/2019

Attitudinal reports prepared by Nielsen for Hort Innovation, survey sample minimum n=300, fieldwork from 23/05/2019 to 28/05/2019 for the Australian market. Copyright © 2019 Horticulture Innovation Australia

These data and insights were produced independently by Nielsen and shared through the Harvest to Home platform, supported through the Hort Innovation vegetable, sweetpotato and onion research and development levies. For more insights visit www.harvesttohome.net.au