High-Quality Produce Important In Giving Grocers Competitive Edge

By Cheryl Flink, Chief Strategy Officer For Market Force Information

Competition in the grocery industry has never been tougher. The emergence of more niche players, discount stores, and upscale chains gives traditional grocery retailers a run for their money. As grocers look for growth opportunities, the fruit and vegetable aisles are evolving as areas where brands can differentiate and gain a competitive edge. A recent grocery industry study by Louisville, CO-based Market Force Information found that high-quality produce is one of the top 10 attributes that influence consumers’ choice of grocer — ranking higher than high-quality meat and organic food choices.

The survey was conducted online in March 2014 across the United States and Canada. The pool of 6,247 respondents reflected a broad spectrum of income levels, with nearly 60 percent reporting household incomes of more than $50,000 a year. Respondents’ ages ranged from 18 to over 65. Approximately 73 percent were women and 27 percent were men, and 50 percent have children at home.

Trader Joe’s Repeats As Overall Favorite Grocer

As a whole, which major grocery chains are delivering the highest levels of satisfaction and delighting their customers? According to our study, Trader Joe’s is North America’s favorite grocery chain, based on customer satisfaction and the likelihood that they would recommend the store to others. It topped the rankings for the second consecutive year with a score of 82 percent, followed closely by Publix in second place with 80 percent, ALDI and Costco in a tie for third with 76 percent each, Hy-Vee fourth with 69 percent, and H-E-B rounding out the top five with 67 percent.

Who Wins in Produce?

While price and convenience are important factors for grocery shoppers, being inexpensive or located on every corner is no longer enough to attract and retain customers in the fast-growth grocery sector. To better compete, certain grocery brands are focusing on their produce sections — some to the point of making them the main draw of their stores — and they just may be earning more frequent visitors and brand advocates as a result of this specialized strategy.

In addition to identifying consumers’ overall favorite grocers, our research revealed how the top chains fared in categories such as produce. Publix won on offering the highest-quality produce (58 percent), H-E-B was second (56 percent), Trader Joe’s was third (53 percent), Costco was fourth (48 percent) and Hy-Vee was fifth (43 percent).

Interestingly, the same grocery stores that appear in the Top 5 of the produce rankings are also the leaders on the overall “favorites” list. ALDI, which is notorious for offering low prices, was the only exception. This suggests that high-quality produce may have a strong bearing on overall satisfaction and lead some shoppers to bypass the stores closest to them in favor of a chain that offers better produce.

Buying Local And Farmers Markets Are Trending

Local food sourcing is of increased interest and importance to consumers. More than half of those studied said that local sourcing of produce, meat and dairy products is important or very important, and 65 percent are more likely to buy these products if they are locally sourced.

Shoppers are also heading to farmers markets in droves in search of fresh, local produce. Nearly three-quarters of respondents reported that they buy at least some produce from farmers’ markets in their area during the months that they are open, and 19 percent buy at least half of their produce from these markets.

Organic And Non-GMO Insights

Organic foods continue to gain in traction among health-conscious consumers and are now a regular feature in most supermarkets. Of the organic food options available, produce is by and large the most prevalently purchased. Eighty-two percent of those studied said they buy organic produce, trailed by meat with 50 percent. Dairy, snacks, cereal and personal hygiene products are also popular organic purchases. The main reasons given for purchasing organic food options were better nutritional value, better quality, and absence of genetically modified organisms (GMOs).

What Types of Organic Products Do You Purchase?

Although GMOs have been prominent in the news, leading some consumers toward organic food choices, half of those surveyed have little-to-no familiarity with them — 38 percent indicated they’re unfamiliar with GMOs, compared with 13 percent who said they’re very familiar with them. Of those 13 percent who are very familiar with GMOs, 69 percent expressed a concern about their use.

Key Takeaway

Produce, particularly organic produce, continues to be a key factor in the choice of grocery brand. Shoppers crave fresh and healthy foods for their families. Grocery retailers that showcase produce may be winning more loyal business and standing out from their competition by focusing on a food category that is highly important to their shoppers. However, competition isn’t just coming from other regional and national grocery chains — farmers markets are also emerging as a contender in the produce battle among consumers who want to locally source their produce.