Bringing consumer insights to industry

The last three months have been busy for Hort Innovation Consumer Insights Manager, George Margin, as he connects with growers and other stakeholders at industry conferences. George was invited to present at Avo Connections and BerryQuest International to talk about the consumer landscape and inform attendees about how current trends are impacting their categories.

With approximately 120 attendees at Avo Connections and 450 at BerryQuest International, George used data from Hort Innovation’s foundational consumer insights investments to build a comprehensive perspective of the consumer drivers influencing attitudes and behaviours for the avocado and berry categories.

Key insights for avocado growers

• Due to the unprecedented market supply of avocados, retail prices have dropped by approximately 40 per cent compared to a year ago, which has significantly impacted growers.
  
  
• Although value is down for industry, consumers have reacted positively to the drop in retail prices by significantly increasing their volume consumption – an increase of 34 per cent compared to a year ago.
  
  
• This growth has primarily come from more households purchasing (an extra 700,000 vs. a year ago) as well as increased frequency (households adding an extra 2.1 per year on average).
  
  
• High prices have historically been a barrier to purchase as there was a strong correlation between lower prices and more households shopping more frequently.
  
  
• Online is becoming an area of focus for the avocado industry as it’s no longer considered a niche channel – online now accounts for 1 in 10 (8 per cent) of avocados sold which has nearly doubled in the past two years. In the past year alone, the volume sold online grew by 69 per cent, twice the rate of physical stores.
  
  
• Avocados (and fruit as a whole) undertrade within the online channel. The national average sold online for all categories within a supermarket was 12 per cent. This indicates that the industry needs to overcome key category challenges to capitalise on growth.

Key insights for berry growers

• Since 2013 berry production value and volume has increased significantly, however in recent years volume has begun to plateau.
  
  
• Over the last year, volume has declined across all demographic groups due to households shopping less frequently.
  
  
• Prices have increased compared to a year ago, and it remains the single largest barrier for consumers to purchase berries.
  
  
• As consumers are price sensitive and growers operate in an environment of higher production costs – how does the industry continue to sell while maintaining a profit?

George posed the following challenges to the BerryQuest audience to consider:

• How will the berry industry deliver value to consumers? ‘Value’ doesn’t always mean lower prices, value can be delivered through higher or superior quality, product innovation, Environmental, Social or Governance (ESG) credentials.
  
  
• Industry need to understand consumer price elasticity (how consumers react to price and what the impact is on volume) to answers questions such as:
  • Do consumers react differently at different points in the year?
  • Do they behave differently across different varieties? i.e. what happens to blueberry volume if strawberries are selling at a discount?
  • Do consumers behave differently between different pack sizes?
  • Do different demographics behave differently?

Hort Innovation’s Consumer Insights Strategy focuses on building a detailed understanding of our consumers and the potential market opportunities for the horticulture sector. The Consumer Insights Strategy is underpinned by a number of multi-industry investments that work together to provide the necessary data and insights needed by our stakeholders, including:

• Consumer demand spaces for horticulture (MT21003)
• Consumer behavioural data program (MT21004)
• Consumer usage and attitude research program (MT21202)

Hort Innovation is continuing to develop its consumer insights capabilities off the back of industry requirements. If there are any questions about George’s presentations, please reach out to us at communications@horticulture.com.au.