By Anne-Marie Roerink, Principal At 210 Analytics And Rick Stein, Vice President Of Fresh Foods At FMI
Produce is big, profitable and growing. In fact, produce sales are growing far ahead of most other departments as well as total edibles and the total store — giving credence to the perimeter outperforming center store. But how do you continue to grow a mature category with a household penetration of 98 percent? One way is finding strategies to move shoppers from lower to higher purchase frequencies by exploring new consumption occasions. These include increased produce snacking, juicing, smoothies and offering convenient solutions through value-added items.
Snacking
For vegetables, the biggest consumption occasion remains dinner, followed by lunch. For fruit, the biggest occasions are snacking and breakfast. But as America is increasingly moving away from three traditional meals to more frequent, smaller meals, produce has an excellent opportunity to grow the number of snack occasions throughout the week. In fact, produce snacking is already ramping up. In 2014, IRI documented robust growth for both snack-size vegetables (with dollar gains of a 17-plus percent) and fruit snacks increasing by 9 percent.
Smoothies And Juicing
Other on-the-go produce solutions include juicing and smoothies. Currently, 33 percent of households prepare fruit smoothies at least on occasion, with 13 percent trying their hand at vegetable juicing.
These shares leave ample room for growth, and the industry is responding with convenient ready-to-blend mixes of fresh fruits and vegetables — borrowing a concept from the frozen aisle where these kinds of mixes have been offered for years. Smoothies and juicing are much more popular among families — as an easy way to introduce produce to young children. Organic shoppers are much more likely to prepare fruit and/or vegetable drinks.
Value-Added
Value-added fruit, which includes all items with some level of preparation (such as balled, chopped, chunked, cored, cubed, cut, diced, halved, pitted, shredded, etc.) is growing at a pace far ahead of the total market. In 2014, unprepared fruit gained 3.3 percent — versus 12.5 percent for value-added fruit. It is important to note, however, that value-added fruit makes up a relatively small share of dollars (8.7 percent or $2.6 billion) and an even smaller share of total pounds sold (4.2 percent or 0.9 billion pounds).
Value-added vegetables (which include chips, chopped, chunk, crowns, cut, hearts, microwave-ready, ready-to-cook, snack pack, sticks and so on) grew 4.5 percent, far ahead of unprepared vegetables, at 0.1 percent. Value-added vegetables make up about one-fifth of a dollar (22.3 percent or $6.4 billion).
In the Power of Produce survey, shoppers described their habits regarding value-added vegetable/fruit items. Forty-six percent of shoppers said they purchase value-added produce sometimes or regularly. Shopper groups that are currently more likely to purchase value-added produce are shoppers working full time — particularly those with children, higher-income households, and men. Others said they only purchase value-added produce when in a time crunch (8 percent) or for special occasions (6 percent).
At the same time, about four in 10 shoppers (38 percent) remained on the sidelines for one of two reasons: No. 1 was the cost (17 percent). One respondent explained price being a barrier as follows, “I’ve seen the products you talk about, but I’ve also seen the prices. I can usually do it for half as much myself. I prefer spending the money on a good dessert or meat.”
No. 2 was the preference to cut or prepare the items themselves (15 percent). The open-ended comments revealed a number of reasons: Several respondents addressed their lack of trust in the quality of the product. One respondent wrote, “I feel the fruit or vegetables are older. For instance, the pre-sliced mushrooms always look dried out.” Another said, “I occasionally buy the fruit platters for parties and such. But it seems to spoil very quickly.” One last comment in this area was, “I always wonder about the cleanliness! How do I know the employees used good kitchen practices?”
Other shoppers addressed the flavor profiles and preference to their own product choices. “I occasionally check out the bagged salads, but I don’t like the dressing flavors.” Another said, “The vegetable mixes seem handy, but they usually have something in them I don’t like. Since they’re so expensive, I wouldn’t want to toss half of it out.”
With cost being the bigger one of the obstacles among those who do not currently purchase value-added produce, promotions, private-brand offerings or meal BOGOs, there may be alternative ways to introduce these customers to the category.
Continued economic recovery is likely going to place more emphasis on on-the-go solutions, as well as drive the need for increased speed and convenience for the more traditional meal occasions.