One of the main differences between the produce departments of yesterday and today, said Anne-Marie Roerink, principal of San Antonio-based 210 Analytics, is the enormous surge in packaged and value-added products.
“We’re making it easier and easier for consumers to plan, shop, prepare and clean up with product and packaging innovation.”
As for the US produce departments of the future, Roerink, a native of Holland, believes she got a glimpse this summer on an extended trip to her home continent.
Trends that will likely cross the pond in the coming years, with commentary by Roerink, include:
- Thinking green. “More than half of the retailers I visited had initiatives underway to reduce the amount of packaging as well as no longer made plastic bags available when buying bulk items. All touted the annual reduction in plastic usage. Others focused on local growers or packaging improvements and also pointed to environmental benefits.”
- Taking care of the growers. “I saw a lot of retailers highlighting growers, which we’ve seen for a while, but also developing programs specifically designed for the fair pay and treatment of farmers.”
- Consumption goals. “Retailers are giving a lot of guidance to shoppers about how much fruit and vegetables to eat. I think this is actually a massively overlooked opportunity in the US. Depending on the country, I noticed guidance on contribution to the five-a-day initiative or the goal of 250 grams of fruit and vegetables a day. Signage in the store reminded shoppers of easy solutions to help get to the 250 grams plus two pieces of fruit and packaging labels indicate the contribution to the five-a-day or other goals.”
- Smaller households. “In the US, packages are still geared towards your ‘traditional’ family of four, which isn’t very traditional any more. European retailers seem to be catering to household size variety much better. I noticed single-portion cauliflower and cabbage – miniature versions that fit in the palm of my hand. But also cut veg/fruit adjustments that are marketed as “small” single-portion packages, whether mixed salad or cut veg for meal preparation. While obviously moving less volume, the price per pound was a bit higher and in today’s world where food waste is high on consumers’ radars, this is a great solution, especially in markets with high 1-2 person households.”
- Creative promotions. “A lot of mix and match promotions, either just a variety of produce items or even mix and match with meat and produce in areas that were set up for grilling. Mix and match is another great way for smaller households to buy a variety of items and still get discounts.”
- Snacking. “Produce in Europe continues to go hard after the produce snacking occasion, especially for kids with small fruit and veggies in to-go containers.”
- Produce-based meal kits. “Rather than having all items for dinner, including the animal protein, Europe is really focusing on produce meal kits, including lots of adventurous international items.”
Fruits lead the way, but vegetables poised for surge
The fresh produce department of 2022 is holding its own and then some, Roerink said.
“Fresh produce is doing remarkably well in the face of incredible inflation and economic pressure,” Roerink said. “Both fresh fruits and vegetables are boosting performance, though fruit is much stronger at the moment.”
Early on in the pandemic, vegetable sales were tremendous as cooking moved to the home, Roerink. In 2022, however, fruit is the clear sales and growth leader. That said, economic conditions could give fresh vegetable sales another boost in the near future, as consumers retighten belts.
“We have seen a lot of strength for basic cooking vegetables in the past few months, including potatoes and onions,” she said. “ In comparison to other categories, shoppers are seeing less impact of supply chain shortages in produce. While some commodities are obviously seeing big price inflation, availability in produce is much better than the rest of the store.”
In the COVID Era, the produce industry has seen “a lot of patterns come and go,” as Roerink puts it.
Initially, produce sales were heavily shifting towards vegetables, and frozen and canned made big inroads as a percentage of total fruit and vegetable dollars.
It took a few years, but fresh is back on top. In fact, she said, the fresh share of total fruit and vegetable dollars is higher than it was prior to the pandemic. (The supply chain disruptions frozen and canned are facing is admittedly a big reason why, she added.)
Another trend that peaked early on but has since slowed, Roerink said, is online purchases of fresh produce.
“Instead of people feeling out online shopping with center-store purchases first, the entire basket moved from in-store to online, including fresh,” Roerink said. “And today, online shopping for fresh produce is definitely still ahead of the pre-pandemic levels, but we’re no longer seeing significant growth in the area, as many shoppers have moved their purchases back to the store and farmers markets.”
Need merchandising inspiration? Think farmers markets
Retailers looking to make their produce departments stand out would do well to imitate the farmers market model, which is making a big comeback, Roerink said.
“During the first pandemic year, many farmers’ markets and fruit stands were closed, and all those dollars ended up in traditional channels,” Roerink said. “Farmers’ markets are back with a vengeance and it seems each time I go to check one out, it has doubled in size or is now open multiple times a week.”
The lesson for retailers? People love farmers and the fun of farmers’ markets, Roerink said. That means meet-the-grower events, having unexpected items, local and experiential elements are important to create that same vibe.
“There are even some retailers that do mini farmers’ markets in their parking lots on the weekends,” she said.
Top fruits and vegetables, by sales, and their percentage increases (or, in two cases, decreases) from year before:
- Berries, 10.7%
- Apples, 8%
- Grapes, 8.7%
- Bananas, 2.2%
- Melons, 12.1%
- Avocados, 9.4%
- Tomatoes, -1.8%
- Potatoes, 4.2%
- Salad kits, 5.5%
- Lettuce, 5%
- Onions, 7.1%
- Peppers, -1.7%
Source: IRI OmniMarket Integrated Fresh, a Chicago-based market research firm