What Happens Next?

March 2021 – Supermarkets have done well in the course of the pandemic. Produce, though, has not done as well as the rest of the store. Partly this is because the perishable nature of produce was not amenable to buying for long term storage during a time when consumers were uncertain about the future.

Despite what happened… very soon, it will all seem like ancient history. President Biden has said all adults will be eligible for COVID-19 vaccines no later than May 1st. So what happens next? And what would that mean for the produce industry?

Well, on the one hand, we might expect a significant rebellion against all the restrictions of life under COVID. Just as World War I and the Spanish Flu pandemic were followed by the Roaring 20’s, so the lockdowns and restrictions of the COVID-19 pandemic are likely to unleash a new burst of exuberance in the 20’s — the 2020’s in this case! Just a quick look at the young people insisting on partying down in Miami, post-curfew, etc., and it all shows the yearning of many to live the life they’ve got.

It is difficult to give an exact timeline and, of course, we don’t know for sure about all the new variants of COVID-19, but we think restaurants and hotels will bounce back bigger than ever. For a hundred years, the percentage of the consumer food dollar spent on food away from home has continuously increased — but then collapsed during this pandemic year. The only real question is precisely how quickly the old hundred-year trend will resume.

The world may well change in important ways due to the pandemic and in ways that might provide great value. The US was once crossed by itinerant tenors who entertained in town halls and other venues. Then came about inventions such as the phonograph. Lo and behold, people could listen to the great Enrico Caruso in their homes, and he made 247 commercially released records from 1902 through 1920. There were very few itinerant tenors after that.

There will be dramatic changes. There are over two million people online who have taken Yale’s most popular course “Psychology and the Good Life” with Professor Laurie Santos.  Most of them just do it to learn, without grades or credit. Yet, isn’t it obvious? People are taking courses from inferior lecturers all around the world, just as they listened to inferior tenors pre-Caruso. Soon there will be superstar faculty members lecturing in every field to students all over the world. A freshman at a top private college who is not receiving financial aid now pays around $85,000 a year. That won’t last.

The produce industry shouldn’t assume its future is rosy either. The Produce for Better Health Foundation recently unveiled its “State of the Plate” research (which is referenced in several articles throughout this issue):

Despite decades of industry and public health efforts, Americas fruit and vegetable consumption continues to decline

The research shows people are eating fruits and vegetables less frequently, down nearly 10% since 2004, when the PBH State of the Plate reporting began. The most significant contributors to this decline have been a 16% decrease in vegetable consumption frequency… In the past five years alone, overall consumption has declined by 3%, indicating the trend is worsening every year.

Many of the trends and events that seem to bode well for interest in produce, such as massive efforts to create meatless proteins, actually have nothing to do with fresh produce. People such as Bill Gates are investing in products such as Beyond Meat and Impossible Foods, both meat-free, but also not helping the fresh produce industry at all.

One change likely to endure post-pandemic is more online grocery ordering. We stand at a precipice. This growth in online can lead to either more produce-centric retail stores or to an online order that is going to be really tough to alter in favor of fresh.

The problem? The divided, low margin produce industry is not prepared for this brave new world. We have a bunch of producers and traders, mostly very fine people, but people who are just not positioned to invest in building an online future for the industry.

There is some indication that the pandemic has led consumers to seek immunity-boosting produce items, particularly citrus. But even in the midst of the pandemic, there is little indication that the healthful halo surrounding fresh produce has driven overall per capita consumption. The problem seems to be shopper laziness. Many consumers who love a slice of tomato, onion and a piece of lettuce on their burger at a restaurant just can’t or won’t stir themselves to duplicate the experience at home.

So to drive consumption, the produce industry must walk two paths. First, it must invest in recipes, demos, sampling and other point-of-sale promotions at retail stores to create produce-centric interest among consumers. Second, it must engage with restaurants to broaden the fresh produce offerings from lettuce, onions and tomatoes, which, along with potatoes, are, by far, still the most-sold produce items in restaurants.

The problem: the wealthiest association in the industry, PMA, has gradually distanced itself from the virtually penniless consumption-driving innovator, The Produce for Better Health Foundation. The national PBH was born in PMA’s office. But the entities have grown apart. The nature of the response to the pandemic is to keep us separated. The challenge now is for the industry to find ways to bring its resources together again.  pb