It’s no secret among food retailers that produce is a big business. Sales of fresh produce have reached $161 billion, with about 99% household penetration. And shoppers who put fresh produce in their carts spend about $20 more than the average shopper and about $30 more than shoppers who don’t buy produce.
These findings were revealed by this year’s Power of Produce report from the Food Marketing Institute and presented by 210 Analytics Principal Anne-Marie Roerink at the FMI Connect conference last month. The report revealed several important trends happening in the produce department this year, many of which have also been seen in SmartBrief’s coverage of the food and beverage industry. We took a look at the report and Roerink’s FMI Connect session and picked out some of the top trends:
Creative merchandising in the produce department
“Produce is starting to pop up everywhere,” Roerink told attendees at FMI Connect.
She talked about report findings about retailers’ strategies to merchandise produce in creative ways, including outside the produce department in displays like endcaps. Nearly two-thirds of shoppers buy produce at supermarkets, which presents a major opportunity for retailers to draw shoppers to other items through produce merchandising, Roerink said. Within the produce department, nearly half of impulse buys are driven by eye-catching displays, the report found, giving retailers a chance to increase basket sizes and impulse buys if they implement such strategies as tying different themes into produce displays, according to Roerink.
However, it is important for retailers to use caution when cross-merchandising with fresh produce and to focus on driving purchases through “ideation” like recipe and serving ideas, Roerink said.
Additional consumption occasions like juicing, snacking and breakfast also present retailers with an opportunity to get creative when it comes to merchandising fresh produce, as does convenience. Value-added produce accounts for about $11 billion in sales, Roerink said, with retail opportunities including fixed-weight, ready-to-heat and to-go packaging, pre-chopped produce options and snack packs.
Take a look at some related headlines included in SmartBrief’s food and beverage coverage over the last few weeks:
- Kits, recipe-ready items bring convenience to fresh produce
- Department managers reveal winning recipe for produce success
- NPD: Consumers crave breakfast on the go
- Retailers ramp up produce sales with value-added options
Consumer demand still growing for local, organic and transparency in produce
More than 60% of shoppers are looking for more locally-sourced items in their produce departments, according to the report, and consumers want to know more about where their food comes from, especially when it comes to free-from and organic items. While some might say demand for local food is tapering off, it continues to move from the produce department out toward other areas of the store, Roerink pointed out.
“As a standalone claim, ‘grown in the USA’ is very strong,” she said. “This trend is still intensifying when it comes to produce.”
Environmentally-friendly claims can also drive sales in the produce department, especially among millennials, Roerink said. And organic remains a big driver of growth in produce, with $4 billion in sales and category engagement of 60%, with the shopper segment mostly made up of the core loyal organic shoppers and peripheral “dabbler” shoppers who represent the biggest opportunity for further growth, she said.
“We have a beautiful opportunity in the store…to tell the story of organic, to tell the story of the local farmer,” she said.
See SmartBrief’s coverage of news related to this Power of Produce report trend:
- BrightFarms delivers first produce shipment to Ill. area Roundy’s stores
- Southeastern Grocers to boost local produce offerings
- Retailers turn to urban farming to meet demand for local foods
- Consumer push for food transparency drives supply chain changes
- Report: Produce leads organic food category’s growth
Health-conscious consumers looking to boost their produce consumption
As health continues to play an increasing part in consumers’ eating decisions, 75% are looking to eat more fresh fruits and vegetables, the report found. Shoppers also see fresh produce as healthier than its frozen and canned counterparts, according to the report.
Roerink pointed out that people readily admit that they don’t eat enough fresh produce, so retailers must take advantage of this opportunity and help drive shoppers to higher consumption rates. However, a major hurdle that remains in this category is price, with shoppers believing that fresh produce is the most expensive option when it comes to buying fruits and vegetables.
“Shoppers believe that fresh produce is more expensive,” Roerink said, making it vital for retailers to elevate the produce discussion beyond price to include the benefits that come with buying and eating fresh produce.
Read more from SmartBrief about how health trends affect produce sales:
- Health benefits, big flavor boost popularity of Maine blueberries
- Shoppers’ health goals are an opportunity for retailers
- Demand for healthy snacks helps Homegrown cut waste
- The changing face of health-focused food culture
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