Online sale of fresh produce promising and challenging

Dossier New Retail (part 1)
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Online sale of fresh produce promising and challenging

The online market for fresh produce and ornamental plants is growing. However, while the ornamental plant sector is making giant steps forward in this respect, the food market is lagging distinctly behind, particularly with regard to fresh produce. How can this be explained, and what are some of the opportunities and threats facing the online sale of horticulture products? Four parties engaged in this field present their vision on the developments, each based on their own expertise.

The number of consumers preferring to make their purchases online is constantly growing. Not only do they buy their clothes and shoes online; they also buy their food on the internet. The percentage of fresh produce sold online, however, lags far behind that of other product groups.

This can in part be explained partly by the high supermarket density in the Netherlands and partly by a lack of consumer confidence in the quality of fresh fruit and vegetables offered online: they prefer to see - and even touch - these products before buying them. Additionally, they are reluctant to pay additional shipping and delivery costs. On top of that, many suppliers of fresh produce lack a successful business model, particularly due to the logistic complexity associated with online sales. There are still many challenges ahead!

Online groceries

Nevertheless, various people engaged in the online sale of food products believe this to be a highly promising market. A study conducted by LEI Wageningen University Research Centre at the beginning of 2015 showed that approximately 12% of all Dutch consumers order their groceries on the internet from time to time. Another study, conducted by Deloitte in 2015, revealed that 8% of all consumers have, at one time or another, made use of an online ordering service. This service is used once or twice a month and the average amount per online order is approximately 69 euros.

Groceries ordered by respondents (or that they would like to order) online are mainly products with a longer shelf life, dairy products and frozen food. There is, however, also a notable rise in the number of fresh products ordered online. The emergence of meal boxes, of which more and more are being offered by supermarkets and other retailers, plays an important role in this development. This relatively new concept is benefiting from the popularity of regional products, healthy nutrition, organic ingredients and several intensive marketing campaigns launched by leading international players.

Meal box increasing in popularity

The meal box is becoming increasingly popular among Dutch households: A recent survey by Multiscope showed that, as it stands today, 11% have tried out a meal box and one third of them will continue to order them. Two out of ten people in the Netherlands are interested in the concept, but have never ordered a meal box. These are generally households composed on one or two persons. What appeals to them in particular is the convenience, the variety in meals and the inspiration to try new recipes.

HelloFresh is the best-known meal box. Eight out of ten people in the Netherlands has heard of this brand. Users are most satisfied about the originality and good quality of HelloFresh box. However, the price and freedom of choice in the various varieties received a lower score. HelloFresh does not deliver its meal boxes on Monday, which is the preferred delivery date. Allerhande Box, however, delivers on Monday and is second to HelloFresh when it comes to name recognition (49%).

Text: Tuinbouwteksten.nl/Ank van Lier. Photo: Fresh Informationmanagement Center.

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