Fresh-cut products represent the fastest growing segment of the produce industry today. As little as three years ago, they barely showed up in the statistics and, today, the numbers indicate that about 6% of total produce department sales are fresh-cut. In actuality, I think the number is quite a bit higher because the statistics aren’t good at catching a lot of the cutting going on, particularly of fruits, at the store level.
The most dramatic part of this growth has been the fresh-cut salad mixes. There is already a cornucopia of brands on the market, including long-time industry giants such as Dole and Tanimura & Antle. What’s more, each brand offers numerous varieties of salad mixes, from Caesar, Italian blend, French blend, to gourmet blends and others.
All these products boost sales, attract consumer interest and build a new constituency for the department. They pioneer the expansion of branding in produce and also lead the way in terms of introducing new packaging technology. And tomorrow, we may look back on these early efforts and realize that we lived through a total transformation of the produce department and the produce industry.
The produce department, of course, has always had the advantage of selling certain snack items, particularly fruits that were ready to be eaten with little, if any preparation. Most of the vegetable items, however, suffered from the fact that they were only ingredients, suitable for eating only after being processed into a dish. Few people eat lettuce, for example; they use lettuce as an ingredient in a salad.
Produce department sales have skyrocketed over the past three decades. But this is principally due to the expansion of the product line. More types of produce, and even more important produce items that were previously available for limited seasons are now available year round due both to advanced storage technology and increased imports.
To some extent, however, this explosion in produce sales at retail is a distraction from the real facts of shifting demand. Increasingly people are getting all their food at restaurants, particularly fast-food eateries and at convenience stores.
But if, as an industry, we look hard into the reflection of the shiny bags that hold the fresh-cut lettuce mixes, we may see a future that is not simply an extrapolation of the past. For one thing, fast food may lose the convenience edge as, increasingly, produce and other supermarket foods are packaged in the form of ready-to-eat foods. Restaurants, after all, are not really all that convenient; you have to go to the restaurant, often wait on line, perhaps wait for a table. It is not at all clear that supermarkets couldn’t get big portions of the fast food market if they combine ready-to-eat products with the proper hours and delivery mechanisms.
Supermarkets have been slow in responding to this, but as the products change to become immediate-consumption-oriented, supermarkets will change too. Right now it is still the case that all around the country McDonald’s and other fast food outlets destroy the supermarket salad business. The simple reason is that people drive through the McDonald’s at 7:30 a.m. and pick up a salad for lunch when many supermarkets don’t set up their salad bars until 10:00 a.m.
And drive-throughs seem inevitable. There is not a reason in the world why a consumer couldn’t fax the supermarket her shopping list from the office and then pick up the goods at a drive-through window on her way home.
The transformation signified by the fresh-cut salad mixes is likely to be repeated with dozens of items. Already you can see items such as mashed potatoes being sold, often in dairy or with the eggs where they have proper refrigeration. But it seems very possible that, in the fullness of time, human ingenuity will find ways to offer high-quality selections of all kinds of produce-based foods.
Just as consumers today can look at salad mixes and select from the different varieties to find one they prefer, the department will one day offer the consumer various vegetable medleys. Some of these selections will be designed to be eaten raw, some will be ready to be cooked, and some will have already been cooked and just need to be warmed up.
Though there will always be people looking for the raw natural product that they can cut and prepare themselves, these items may be the mainstream of gourmet or specialty shops of the future. The mainstream of the supermarket produce department may be prepared foods.
In fact, for some years, experts have been warning produce departments to seize fresh-cuts before deli grabbed them and ran produce departments out of business. The truth is that the service deli approach, though booming now as a way to compete with restaurants and to add a distinguishing feature to stores, may not be the long-term solution. Having all those people providing all that service may just turn out to be too expensive, particularly if products of equal quality can be mass-produced and packaged in quality-preserving packaging.
Service delis may wind up merging with produce, meat, and dairy as a kind of seamless wall of fresh foods. Perhaps the important distinction in the supermarket of tomorrow will not be produce, meat, dairy, or deli; it will be READY TO EAT, READY TO HEAT, READY TO COOK.
And if all this really comes to pass, the branding make-up of produce will certainly change. If what’s involved is developing a unique food application, making the food in a factory, packaging it to preserve quality and distributing it efficiently, then the big food companies surely will want to seize some share of that giant fresh foods wall.
The fresh-cut people are really the pioneers in all this. Their actions are not merely important because they change the way we sell produce now. What they are doing matters because it changes the way people think about what’s appropriate to be called fresh produce. We in the industry need to understand that we are transforming consumer understanding of our products, and the idea that fresh produce can come in a bag from a factory is an idea for our time. There is nothing more powerful than an idea whose time has come.