FRUIT IN THE USA

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Fruit & Vegetables in the

United States

Industry Profile

Reference Code: 0072-2237

Publication date: July 2006

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EXECUTIVE SUMMARY

EXECUTIVE SUMMARY

Market Value

The United States fruit and vegetables market grew by 4% in 2005, to reach a value of $70.3 billion.

Market Value Forecast

In 2010, the United States fruit and vegetables market is forecast to have a value of $85.4 billion, an increase of 21.6% since 2005.

Market Volume

The United States fruit and vegetables market grew by 1.8% in 2005, to reach a volume of 73.8 million metric tonnes.

Market Volume Forecast

In 2010, the United States fruit and vegetables market is forecast to have a volume of

80.3 million metric tonnes, an increase of 8.8% since 2005.

Market Segmentation I

The sale of fruit accounts for 50.7% of the market value.

Market Segmentation II

The United States generates 17.4% of global fruit and vegetable market revenues.

TABLE OF CONTENTS

EXECUTIVE SUMMARY 3 CHAPTER 1Market Overview 7 1.1Market Definition 7 1.2Research Highlights 7 1.3Market Analysis 8 CHAPTER 2Market Value 9 CHAPTER 3Market Volume 10 CHAPTER 4Market Segmentation I 11 CHAPTER 5Market Segmentation II 12 CHAPTER 6Competitive Landscape 13 CHAPTER 7Leading Companies 14 7.1Kroger Co., The 14 7.2Wal-Mart Stores, Inc. 14 7.3Albertson's, Inc. 14 7.4Safeway Inc. 15 CHAPTER 8Market Forecasts 16 8.1Market Value Forecast 16 8.2Market Volume Forecast 17 CHAPTER 9Macroeconomic Indicators 18

CHAPTER 10Further Reading 19 10.1Sources 19 10.2Related Datamonitor Research 19

LIST OF TABLES

Table 1:United States Fruit & Vegetables Market Value: $ billion, 2001-2005 (9)

Table 2:United States Fruit & Vegetables Market Volume: Metric tonnes million, 2001-2005 (10)

Table 3:United States Fruit & Vegetables Market Segmentation I: % Share, by Value, 2005 (11)

Table 4:United States Fruit & Vegetables Market Segmentation II: % Share, by Value, 2005 (12)

Table 5:United States Fruit & Vegetables Market Value Forecast: $ billion, 2005-201016

Table 6:United States Fruit & Vegetables Market Volume Forecast: Metric tonnes million, 2005-2010 (17)

Table 7:United States Size of Population (million) , 2001-2005 (18)

Table 8:United States GDP (1995=100), 2001-2005 (18)

Table 9:United States Inflation, 2001-2005 (18)

CHAPTER 1 MARKET OVERVIEW

1.1 Market Definition

The fruit & vegetables market reflects the sale of all types of fruit and vegetables, regardless of whether they are sold as fresh, canned or frozen produce. Potatoes have been included within the vegetables sector. Market values have been calculated at retail selling price (RSP) and include all applicable taxes. Any currency conversions used to create this report have been calculated at constant 2005 annual average exchange rates.

Market volumes show domestic demand for fruit and vegetables. While fruit & vegetables used to produce beverages have been included within the market volumes, they have not been considered when calculating market values. The players shown in the leading companies section of this report are all fruit & vegetable retailers.

For the purposes of this report, Europe is deemed to consist of France, Germany, the United Kingdom, Belgium, Italy, the Netherlands and Spain.

Asia-Pacific comprises China, India, Indonesia, Japan, Malaysia, South Korea, and Thailand.

The Americas are comprised of the United States and Canada.

The global market consists of Europe, Asia-Pacific and the Americas.

1.2 Research Highlights

The market generated total revenues of $70.3 billion in 2005, representing a compound annual growth rate (CAGR) of 4.8% for the five-year period spanning 2001-2005.

The US slightly increased its global market share from 17.3% in 2004 to 17.4% in 2005.

Market consumption volumes increased with a CAGR of 2.1% for the five-year period spanning 2001-2005, to reach a total of 73.8 million metric tonnes.

Government health guidelines recommending the per capita consumption of 5-9 portions of fruit and vegetables daily, which is tending to increase demand.

1.3 Market Analysis

The United States fruit and vegetable market has shown strong performance over the five-year review period. This is predicted to persist going forward, although at slightly slower pace.

The market generated total revenues of $70.3 billion in 2005, representing a compound annual growth rate (CAGR) of 4.8% for the five-year period spanning 2001-2005. For comparison, the fruit and vegetable market in Canada grew at a CAGR of 6.4%, realizing $9.2 billion in 2005. The United States’ share of the fruit and vegetable market in the Americas region fell from 89% in 2001 to 88.4% in 2005.

However, the United States has slightly increased its global market share from 17.3% to 17.4% during this period. The most lucrative regional market is that of Asia-Pacific, which generated $202.9 billion in 2005.

Market consumption volumes increased with a CAGR of 2.1% for the five-year period spanning 2001-2005, to reach a total of 73.8 million metric tonnes. Growth in the United States market has been slightly slower than that of Canada, where consumption volume grew at a CAGR of 2.9% between 2001-2005.

Fruit sales form the most lucrative segment in the United States fruit and vegetable market, generating total revenues of $35.6 billion in 2005, equivalent to 50.7% of the market’s overall value. The sale of vegetables generated similar revenues of $34.6 billion in 2005, equating to the remaining 49.3% of the market’s aggregate revenues.

Looking forward, the market’s performance is forecast to decelerate, with an anticipated CAGR of 4% for the five-year period 2005-2010 expected to drive the market to a value of $85.4 billion by the end of 2010. The United States is set to lose its global market share from its current 17.4% to 16.5% by 2010, due in part to strong growth in the large Asia-Pacific market. In the United States, consumption volume is predicted to grow with a CAGR of 1.7% during the 2005-2010 period, to reach 80.3 million metric tonnes in 2010.

CHAPTER 2 MARKET VALUE

The United States fruit and vegetables market grew by 4% in 2005, to reach a value

of $70.3 billion.

The compound annual growth rate of the market in the period 2001-2005 was 4.8%.

Table 1: United States Fruit & Vegetables Market Value: $ billion, 2001-

2005

billion%

Growth

Year $

2001 58.2

2002 62.47.30%

2003 64.9 4.00%

2004 67.5 4.10%

2005 70.3 4.00%

CAGR, 2001-2005: 4.8%

Source: Datamonitor D A T A M O N I T O R

CHAPTER 3 MARKET VOLUME

The United States fruit and vegetables market grew by 1.8% in 2005, to reach a volume of 73.8 million metric tonnes.

The compound annual growth rate of the market volume in the period 2001-2005 was

2.1%.

Table 2: United States Fruit & Vegetables Market Volume: Metric tonnes

million, 2001-2005

Year

Metric

tonnes

million %

Growth

2001 68.0

2002 69.8 2.70% 2003 71.3 2.00% 2004 72.5 1.70% 2005 73.8 1.80% CAGR, 2001-2005: 2.1%

Source: Datamonitor D A T A M O N I T O R

CHAPTER 4 MARKET SEGMENTATION I

The sale of fruit accounts for 50.7% of the market value.

Vegetable sales generate the remaining 49.3% of total revenues generated in the US

market.

Table 3: United States Fruit & Vegetables Market Segmentation I: %

Share, by Value, 2005

Share

Category % Fruit 50.70%

Vegetable 49.30%

Total 100.0%

Source: Datamonitor D A T A M O N I T O R

CHAPTER 5 MARKET SEGMENTATION II

The United States generates 17.4% of global fruit and vegetable market revenues. Asia-Pacific is the largest regional market for fruit and vegetables, accounting for 50.3% of the global value. Table 4:

United States Fruit & Vegetables Market Segmentation II: % Share, by Value, 2005

Geography % Share

Asia-Pacific 50.30%Europe 30.00%United States 17.40%Rest of the World 2.30%

Total 100.0%

Source: Datamonitor D A T A M O N I T O R

COMPETITIVE LANDSCAPE

CHAPTER 6 COMPETITIVE LANDSCAPE

The sale of fruit and vegetables in the US is dominated by large supermarket chains, such as Wal-Mart, Kroger, Albertson’s, and Safeway. Such large supermarkets have great buyer power in this market. They can minimize the price of fresh produce through bulk purchasing and distribution, passing on the savings as highly competitive retail prices, which has tended to drive smaller, dedicated fruit and vegetable retailers out of business.

With government health guidelines recommending the consumption of 5-9 portions of

fruit and vegetables daily, the overall consumption per capita of fruit and vegetables is gradually increasing. In line with increased consumption, tastes are encompassing

a wider variety of produce and retailers may be wise to extend and diversify their fruit

and vegetable offerings.

Retailers are increasingly selling ready-prepared fruit and vegetable items such as pre-packed salads, chopped vegetables and sliced packaged fruit. Such convenience

items can be sold at a greatly elevated price and are therefore becoming a valuable source of revenue.

In a bid to reduce the potential hazards to health posed by pesticide exposure and minimize the environmental impact of production, a growing proportion of consumers are expressing a preference for organically produced fruit and vegetables. In order to

be defined as organic, produce must have been grown without the use of synthetic pesticides, herbicides or fungicides on land that has been free from such chemicals for at least three years. Specialist stores are responsible for roughly half the sales within the organic sector, although many supermarket chains are looking to increase their share. Wal-Mart announced in May 2006 that it would be increasing the sale of organic fruit and vegetables from its stores, which it hopes will “help modernize its image and broaden its appeal to urban and other upscale consumers”.

.

CHAPTER 7 LEADING COMPANIES

7.1 Kroger Co., The

The Kroger Company (Kroger) operates retail food and drug, multi-department, jewelry and convenience stores. The company operates solely in the US. It is headquartered in Cincinnati, Ohio.

The company recorded revenues of $60,553 million during the fiscal year ended January 2006, an increase of 7.3% over 2004. The net profit was $958 million in fiscal year 2005, compared with a net loss of $104 million in 2004.

7.2 Wal-Mart Stores, Inc.

Wal-Mart, the largest retail company in the world, specializes in the operation of mass merchandising and supermarket stores. The company operates through three segments, namely the Wal-Mart stores, Sam's Club, and the International segments in Asia, Europe, and South America. Wal-Mart is headquartered in Bentonville, Arkansas.

Wal-Mart recorded total revenues of $321.4 billion during the fiscal year ended January 2006, an increase of 9.5% over fiscal 2005. The company recorded a net income of $11.6 billion in fiscal 2006, an increase of 9.4% over 2005.

7.3 Albertson's, Inc.

Albertson's is a large food and drug retail chain in the US. The company operates drugstores under the Osco Drug and Sav-on Drugs brands. It also operates discount warehouse stores under the Super Saver and Max Foods banners, offering discounted meat and produce. Albertson's is headquartered in Boise, Idaho.

For fiscal 2006, Albertsons posted sales of $40.4 billion, an increase of 1.2% on the previous year. Net income was $446 million, approximately 0.5% up on the preceding year.

7.4 Safeway Inc.

Safeway is a food and drug retailer in North America with 1802 stores as of December 2004. The company's US retail operations are located principally in California, Oregon, Washington, Alaska, Colorado, Arizona, Texas, the Chicago metropolitan area and the Mid-Atlantic region. Its Canadian retail operations are located principally in British Columbia, Alberta and Manitoba/Saskatchewan. It is headquartered in Pleasanton, California and employs 191,000 people.

The company recorded revenues of $38,416.0 million during the fiscal year ended December 2005, an increase of 7.2% over 2004. The net profit was $561.1 million during fiscal year 2005, an increase of 0.2% over the previous year.

CHAPTER 8 MARKET FORECASTS

8.1 Market Value Forecast

In 2010, the United States fruit and vegetables market is forecast to have a value of

$85.4 billion, an increase of 21.6% since 2005.

The compound annual growth rate of the market in the period 2005-2010 is predicted

to be 4%.

Table 5: United States Fruit & Vegetables Market Value Forecast: $

billion, 2005-2010

Growth

billion% Year $

2005 70.3 4.00%

2006 73.0 4.00%

2007 76.0 4.10%

2008 79.1 4.00%

2009 82.2 4.00%

2010 85.4 3.90%

CAGR, 2005-2010: 4.0%

Source: Datamonitor D A T A M O N I T O R

8.2 Market Volume Forecast

In 2010, the United States fruit and vegetables market is forecast to have a volume of

80.3 million metric tonnes, an increase of 8.8% since 2005.

The compound annual growth rate of the market volume in the period 2005-2010 is predicted to be 1.7%.

Table 6: United States Fruit & Vegetables Market Volume Forecast:

Metric tonnes million, 2005-2010

Year

Metric

tonnes

million %

Growth

2005 73.8 1.80% 2006 74.9 1.50% 2007 76.3 1.90% 2008 77.6 1.70% 2009 79.0 1.70% 2010 80.3 1.70% CAGR, 2005-2010: 1.7%

Source: Datamonitor D A T A M O N I T O R

MACROECONOMIC INDICATORS

CHAPTER 9 MACROECONOMIC INDICATORS

Table 7: United States Size of Population (million) , 2001-2005

Year Population (million) % Growth

2001 285.02002 287.70.90%2003 290.30.90%2004 293.00.90%2005 295.70.90%

Source: Datamonitor

D A T A M O N I T O R

Table 8: United States GDP (1995=100), 2001-2005

Year 1995=

100% Growth

2001 122.82002 125.5 2.20%

2003 129.5 3.20%

2004 2005

Source: Datamonitor

D A T A M O N I T O R

Table 9: United States Inflation, 2001-2005

Year Inflation Rate (%)% Growth

2001 1.62002 2.453.20%2003 1.9-20.90%2004 2.218.80%2005 2.1-6.00%

Source: Datamonitor

D A T A M O N I T O R

CONTENTS

CHAPTER 10 FURTHER READING

10.1 Sources

This report is based on a combination of primary Datamonitor research, including online, face-to-face and telephone interviews with consumer and industry players, and secondary research using various sources (including trade associations, news providers and others).

Industry Associations

United Fresh Fruit & Vegetable Association

1901 Pennsylvania Ave. NW

Suite 1100

Washington, DC 20006

USA

Tel: 1 202 303 3400

Fax: 1 202 303 3433

https://www.sodocs.net/doc/8a18388604.html,/

The National Retail Federation

325 7th Street, NW

Suite 1100

Washington DC 20004

USA

Tel: 1 202 783 7971

Fax: 1 202 737 2849

https://www.sodocs.net/doc/8a18388604.html,/

10.2 Related Datamonitor Research

Datamonitor Industry Profiles

Fruit & Vegetables in Canada ($200)

Fruit & Vegetables in Europe ($200)

Fruit & Vegetables in Asia-Pacific ($200)

Global Fruit & Vegetables ($200)

Fruit & Vegetables in Japan ($200)

Fruit & Vegetables in China ($200)

Fruit & Vegetables in Germany ($200)

Fruit & Vegetables in the United Kingdom ($200)

Fruit & Vegetables in Italy ($200)