Fresh-cut and value-added show no signs of slowing down

Shopping habits have changed over the past few years, says Barons Market Senior Vice President Rachel Shemirani, and while alcohol and produce tend to be the first places shoppers cut from their carts when trying to slash spending, retailers say value-added and fresh-cut produce continue to grow.

“Customers have very long memories of what their total basket should cost when they go to the grocery store,” she said. “So, it's really about cutting back and buying only what they know they're going to consume because prices are so high everywhere.”

Shemirani says Barons Market, a Southern California-based grocer with nine stores, continues to expand its grab-and- go, fresh-cut and value-added sections in its produce department as shoppers want to be prudent with their time and money.“We do not see a slowdown,” she said. “While convenience is still king [and] is still really important, I also think it's not just convenience that the customers are looking for, but also freshness.”

Exceeding consumer expectations

Shemirani says a big part of the growth of Barons Market's fresh-cut and value-added produce is ensuring the retailer delivers on quality.

“The fresh cut has to be really fresh and really worth the extra money that [consumers are] spending,” she said. “It's still true that people are busier than ever, and that is still kind of the running vein with all of our customers. Prices are going up, but people are still using DoorDash and Uber Eats. People are still spending that extra dollar or more to get that convenience.”

The same is true for Bronx, N.Y.-based produce and specialty foods distributor Baldor Specialty Foods. Its foodservice customers are flocking to fresh-cut and value-added for the convenience but return for the eating experience, says Vice President of Merchandising Scott Crawford.

“We typically get the customer on convenience, and it's the quality we deliver that keeps them coming back for the solution,” he said. “Consumers want prepped items, but it's easy to lose them if what they purchase doesn't meet expectations. That's why we work hard to ensure we are meeting this expectation so that they can taste that they're getting the same level of freshness as if they cut the produce themselves.”

Crawford says Baldor Specialty Foods offers more than 400 fresh-cut produce items to chefs ranging from chopped, diced, peeled and prepped fruits and vegetables.

“We take the highest-quality products and make it easy for a chef to create a dish,” he said. “We are committed to offering the freshest produce with as long as possible shelf life. This is made possible due to our short supply chain, our focus on local sourcing, and our direct relationships with farmers and producers.”

Shemirani says that earlier this year McDonald's Corp. Chairman and CEO Chris Kempczinski said the fast-food giant competes with grocery stores for dollar shares, and that's reflected in Barons Market's and other retailers' sales of fresh-cut and value-added produce.

“Even before the pandemic, with grab and go, we were competing with the restaurants,” she said. “It really speaks to what we're seeing with that grab and go, whether it's our salad bar, entrees, hot bar — all of that stuff. All of that is still increasing in sales. And in the produce section, it's definitely the fresh-cut produce.”

Crawford says part of the fresh-cut and value-added story is time — chefs and consumers don't mind paying for the convenience of fresh-cut produce.

“We know everyone is busy and strapped for time these days. Both chefs and consumers want something healthy that tastes great and is easy to consume on the go, and our fresh-cut produce is the solution and provides the convenience folks are looking for without skipping out on freshness,” he said.

Shemirani says there's an investment from Barons Market to ensure that the fresh-cut eating experience meets or exceeds customers' expectations. Barons Market produces its fresh-cut and value-added produce in-store daily, sometimes twice a day.

“It's a cost commitment. It's getting the right person, making sure they know exactly what they're doing.

That's the biggest challenge,” she said. “We've seen that that really pays off.”

Shemirani says while there's an added cost to producing, Barons Market is mindful of passing those costs on to its customers.

“We do as much as we can of holding back price changes,” she said. “Our costs will go up, but we really do as much as we can. For something like this, we have had to raise the price incrementally.”

Shemirani says Barons Market increased the price of its fresh-cut and value-added produce a few times in the past year and a half.

“And to our surprise and to our delight, people are still really responding and purchasing these value-added, fresh-cut produce items,” she said. “I really do think the key is the freshness and the quality of it. I think that's why people keep coming back for more.”

New introductions

With Barons Market being a smaller independent retailer, the fresh-cut and value-added team experiments with different offerings to its lineup, Shemirani says. The retailer recently started selling a smaller variety-pack tray with cut watermelon, grapes, peeled and cut Golden Nugget tangerines, and peeled and sliced grapefruit.

“This is something that our produce managers are coming up with. We try [these ideas] in the store. And that is something that just looks so fresh, so inviting,” she said. “And that's something easy that someone could put in their fridge, not necessarily serve it at a party.”

Barons Market's fresh-cut team also started offering mixes with cut celery, carrots, jicama, cucumbers and limes, which have been popular with Hispanic shoppers. Mixed grape cups are also a hit with shoppers.

“They're super kid-friendly, and they fit into your cup holder in the car,” Shemirani said. “It's that little added thing that people just love the convenience of. It's a quick, healthy snack on the go that kids and adults are loving.”

Crawford says while Baldor Specialty Foods recently added dragon fruit, cara cara oranges and fruit medleys to its fresh-cut lineup, customers still look to the essentials.

“Basics like diced onions are always winners, as are more difficult-to-cut fruits — think mango and pineapple,” he said. “Of course, we see seasonal shifts as well. We sell a lot more squash in the winter, and we over- index on cut fruit in the summer.”


What's next?

What does the future hold for fresh-cut and value-added produce? Crawford says he doesn't see this segment losing momentum.

“We are confident the demand for value-add items has not plateaued,” he said. “We will continue to listen to our customers and make sure we are adding value wherever possible. This current wave is in the value-added cut fruits and vegetables. As a good partner, we listen and adapt to whatever the need is for chefs.”

Shemirani, too, says it shows no signs of slowing down.

“It's an opportunity to offer the customer something that's convenient, something that's fresh, something that's different, something that's interesting,” she said. “We can keep the costs low. And people are buying what they need. People are buying what they know that they're going to consume, which I think is
an important aspect of it. … [Fresh-cut], along with our other grab-and-go department, is the thing that's going to continue to expand and evolve.”