NIELSEN | INNOVATION CREATING NEW OPTIONS FOR SHOPPERS AND DRIVING GROWTH OPPORTUNITIES IN-STORE.
We love our carrots, with 94% of Australian households purchasing this staple every year. While most shoppers purchase standard carrots, some are also purchasing specialty carrots, giving consumers more reasons to buy the category and creating new pockets of growth.
While carrot sales remain relatively flat overall at -0.8%, this year vs year ago, major supermarkets are leading the market, growing at 3.1%. When looking at major supermarkets, we see juicing carrots, organic carrots, Dutch carrots, Woolworths' Odd Bunch carrots, and prepared carrot formats making up 16% share of carrot dollar sales. However, while standard carrots within major supermarkets are fairly flat in growth (+2%), it is these specialty carrots that have added 9.7% to carrot category sales among the majors this year. With nearly a quarter of shoppers having no spontaneous awareness of many different varieties of carrots and only 13% of shoppers having a spontaneous awareness of Dutch carrots, there is a big opportunity for future growth by promoting these speciality options.
Tasmanian grower Jason McNeill of Premium Fresh notes that as carrots are such a well accepted and highly consumed category, it’s not surprising that growth is coming from specialty lines. While he appreciates the need for convenience that prepared carrots to fulfil he has some concerns about the amount of packaging required and hopes to see innovation in the future. He also believes that as technology advances, future growth may come from the extraction and use of some components of carrots such as pulp or beta-carotene across the food, health and other product manufacturing sectors.
While major supermarkets sell just over three-quarters of Australian carrots, non-supermarkets sell 15% of Australian carrots and are declining at -14.1%. Non-supermarkets are under-represented in carrots, versus their share in other vegetables, which ranges from 18% - 35%. The ‘other supermarket’ retailers sell less than 10% of Australian carrots and are also going backwards at a rate of -7.0%. These smaller channels are being affected by shoppers switching their spend to major supermarkets with half of the value decline in non-supermarkets coming from this switch. Jason McNeill believes that, like all trends, this move towards major supermarkets will fluctuate. He believes carrots are often seen as a commodity product and as transport and logistic systems are able to place high quality, fresh carrots in all major centres of the country, shoppers don’t need to be so fussy about where they purchase them.
One new product success story is Woolworths' Odd Bunch carrots which have reached 7.3% share in major supermarkets. Shoppers are enjoying the chance to buy cheaper carrots and help reduce wastage, with dollar sales growth of 4.8%.
Most of the growth we see in Dutch carrots within major supermarkets is coming from shoppers switching from standard carrots for the smaller, more aesthetically appealing Dutch carrot. Juicing carrots are growing by retaining existing buyers and attracting new buyers.
Carrots are generally bought by both families and by non-families, however, Dutch carrots have a skew towards households where the primary shopper is over 55 years of age and is in the medium income bracket ($45 - $90k+). Meanwhile, prepared carrots appeal to a younger demographic. Although organic carrots are in decline they have a surprising skew towards low and medium income households, while juicing carrots also skew towards medium income households.
Carrots have long been a staple in the basket of Australian shoppers. Now, specialty carrots are adding interest to purchasing carrots and are giving shoppers a chance to try something new!
This project has been funded by Hort Innovation, using the vegetable, onion and sweet potato research and development levies, and contributions form the Australian Government. Hort Innovation is the grower-owned, not-for-profit research and development corporation for Australian horticulture.