Exploring the ‘Power of Produce'
Growing in both dollar and unit sales (4.2% and 0.6%, respectively), the produce department is where the action is for retailers, said Anne-Marie Roerink, principal, 210 Analytics L.L.C., San Antonio.
“Produce very much is a planned and researched purchase with most people listing it, but at the same time people readily admit that they very often add unplanned items to their carts,” she said to FMI Connect attendees this past week in Chicago, where the annual meeting of the Food Marketing Institute (F.M.I.) took place alongside a meeting of the United Fresh trade group.
Citing research from the Power of Produce 2015, F.M.I.’s inaugural report on the produce retail industry, retailers may increase produce sales by encouraging impulse buys and targeting young families. Fifty-seven per cent of shoppers estimate they frequently or almost always purchase unplanned items when in-store, making produce a category to help grow the basket. The Power of Produce was conducted by 210 Analytics and sponsored by Yerecic Label, New Kensington, Pa.
Produce has a high household penetration, at 98% for fresh fruit and 99% for fresh vegetables, according to Nielsen data. Individual produce items with some of the highest household penetration are potatoes, bananas, onions, tomatoes, carrots and apples, at 8 in 10 households or more. In a typical year, American households buy fresh produce more than 45 times or just under once per week and they spend an average of $327 per household annually.
Vegetable dollar sales were $28.6 billion in 2014, according to Information Resources, Inc. Fruit was slightly higher at $29.4 billion. Add in sales from freshly squeezed juice ($15 million), salad bars ($446.5 million) and peripherals ($1.5 billion), and total produce added more than $60 billion to the food retailing industry’s bottom line, as measured across multi-outlet channels, including grocery, mass, club, etc.
What is getting shoppers to buy more? While price and promotions attract shoppers to the store, once there, they want clear signage, clearly marked prices, variety, freshness, good organization and product availability. Unlike other supermarket departments where price is paramount for many shoppers, when it comes to produce, the top purchase considerations are freshness/quality followed by price, underscoring the importance of providing value versus low prices.
What prompts consumers to reduce their produce purchases? Out-of-stocks are not only one of the greatest detractors of department satisfaction but also result in lost sales. When encountering empty shelves, more than 4 in 10 forego the produce purchase rather than substituting.
Ms. Roerink emphasized that millennials with children should be a focus for produce departments.
“Age is huge when it comes to produce,” she said. “I think the biggest opportunity — I see it again and again — is that group 29- to 39-years old that has young children, especially children zero to six. That seems to be the point of entry to increase the produce purchase, to start buying organic, to get into snacking and juicing.”
Snacking on fruits and vegetables is huge among today’s consumers. Overall, 38% of households say they are eating more produce for snacking while 27% say they are eating more produce for juicing/smoothies.
To meet the growing demand, Naturipe Farms L.L.C., Salinas, Calif., now offers on-the-go single-serve blueberry snack packs. Washed and ready to eat, the packs were recognized as the 2015 Best New Fruit Product by United Fresh.
They are sold individually and in a three pack. The blueberries come in 3.75-oz packs and have a refrigerated shelf life of 21 days. There are two combination packs: mango/blueberry and grape/blueberry that come in 4.5-oz packages and have a 15-day refrigerated shelf life.
While fruit is most popular as a snack and for breakfast, dinner remains the biggest opportunity for vegetables. Salad kits, as well as single-serve, grab-and-go salads continue to be popular lunch and dinner items.
They also are becoming increasingly sophisticated. For example, Apio Inc., Guadalupe, Calif., is introducing a line of salad kits as part of a Plant-Powered Protein line under its Eat Smart label. Each has at least 13 grams of protein per serving and 40% or more of daily recommended fiber. The protein content equals that of salads containing meat, according to the company, but the new kits are vegetarian. Single-serve, ready-to-eat salads kit sales have jumped 22% from a year ago, according to the company.
The three varieties and their ingredients are:
• BBQ Ranch, which features julienned cauliflower, red and savoy cabbage, kale and carrots with chia seeds, roasted soy nuts, slivered almonds and freeze-dried corn topped with a barbecue ranch dressing;
• Super Caesar that includes collard greens, Italian kale, red chard, broccoli stalk and savoy cabbage with chia and sunflower seeds, dried roasted edamame, Parmesan cheese and a Caesar dressing; and
• Yogurt Curry, which has julienned cauliflower, kale and multicolor kale, carrots and green cabbage with chia seeds, roasted chickpeas, slivered almonds, golden raisins and a yogurt curry dressing.
“Dietitians and chefs are leading the trend toward additive nutrition, the practice of powering up meals with more nutritious choices,” said Anne Byerly, vice-president of marketing. “Eat Smart’s new Plant Powered Protein salad kits are the perfect solution for consumers looking for innovative, convenient, and healthy eating options that are easy to integrate into their busy lives.”
Fresh Express, a subsidiary of Chiquita Brands L.L.C., Charlotte, N.C., the nation’s No. 1 brand of packaged salads, launched a line of Functional Health Salad Kits. The kits are redefining salads by focusing on a specific health need and delivering benefits against those needs, according to the company.
The three varieties and their ingredients are:
• Heart Health with spinach, kale, beet tops, shredded broccoli, shredded carrots, dried cranberries and sliced almonds with basil balsamic vinaigrette;
• Antioxidant that features spinach, baby kale, red cabbage, shredded carrots, feta cheese, sunflower kernels, and dried blueberries with pomegranate blueberry vinaigrette; and
• Digestive Health with spinach, baby kale, pak choi, beet tops, shredded carrots, dates, sliced almonds, and flaxseed with a sesame ginger dressing.
The Power of Produce study also showed value-added produce (e.g., chopped, sliced, halved, washed, etc.) grew 13% this past year versus 3% for unprepared produce, with about half of shoppers purchasing value-added produce with some regularity. Companies are responding with increased variety and recipe ideas.
“We’re not much of a resource to shoppers when they’re looking to do something new,” Ms. Roerink said. “I think that might be a great opportunity to reach out to shoppers about, just to give them new suggestions for new items and new ways to prepare.”
That’s what Green Giant Fresh by Growers Express, Salinas, Calif., is doing with its new Green Giant Fresh Cauliflower Crumbles. The refrigerated chopped cauliflower product is manufactured using the company’s patent-pending process to extend shelf life (16 days) and prevent discoloration.
“Cauliflower is on-trend and in demand; chefs and consumers, alike, are finding delicious new ways to use this popular vegetable,” said Jennifer Fancher, director of marketing. “Our uniquely processed, ready-to-use Cauliflower Crumbles take all the prep out of this healthful ingredient. They can be steamed right in their package and are versatile enough to be used in a variety of dishes and applications, including roasting, baking, sautéing and mashing.”
The crumbles also may be used as a healthy ingredient alternative for a variety of dishes, including cauliflower chocolate cake and pizza crust. There are more than 100 recipes on the brand’s web site.
It should be no surprise that “local” is a sought after quality in the produce department. In fact, local wins out in a fruit-purchasing scenario where conventional, local and organic are all equally priced. Additionally, local remains the most popular choice ahead of conventional when a price premium is tacked on for local and organic.
Still, nearly all produce segments show solid dollar growth, from conventional produce holding its own at 3% or more, to double-digit increases for organic produce. In 2014, fruit and vegetables added $2.4 billion in new dollars for the retailing industry. Without a doubt, the produce department is where the action is for retailers and this growth shows few signs of abating.