Through a special arrangement, what follows is an excerpt of a recent article from Grocery Headquarters magazine, presented here for discussion.
The fresh produce category just keeps getting bigger, and more retailers are expanding their sections to take advantage of that growth and of consumer demand for new varieties of fruits and vegetables.
According to Nielsen's Strategic Planner, dollar sales of prepackaged UPC-coded fresh produce items rose by an impressive 6.4 percent to $12.35 billion in the 52 weeks ended Jan. 27, while unit sales rose by 1.3 percent. The increase in dollar sales came on the heels of a slightly larger 7.6 percent gain during the 52-week period a year earlier.
Leading the charge were such products as garlic, herbs, potatoes, lettuce and kiwi, each of which posted double-digit dollar sales gains during the year. Industry observers say a growing desire for different types of fruits and vegetables has caused many consumers to search for new types of produce for their meals. Also, many say that the aging Baby Boomer generation is extremely interested in eating produce as part of a healthy diet.
With the produce category performing so well, retailers are battling among themselves for consumer dollars. Many realize that freshness is the most important factor in persuading shoppers to visit their stores for produce, but they also understand that developing the right image though the use of signage, displays and lighting can draw shoppers into the section, as well.
Interestingly, many industry observers say that price is not as much an issue with produce as with many other supermarket categories. Consumers, it seems, remain relatively unconcerned with the cost of an item as long as their other key expectations are satisfied.
There were some changes in sales growth from one year to another. In the latest 52-week period, sales of spinach fell by 13 percent after a 15.6 percent gain the previous year. Many observers say concern over E. coli after an outbreak during the summer hurt spinach volume. Sales of precut salad mix also fell during the tracked period.
Observers predict that sales of fresh produce will continue to increase at a good pace over the next few years.
Discussion Questions: Do you see any signs of the growth in fresh produce slowing down? How can food retailers further capitalize on the apparently strong underlying produce trend?