Orlando, Fla. – While the fresh produce industry is “incredibly strong,” there's still ample opportunity for growth, noted Anne-Marie Roerink, principal and founder of 210 Analytics, during a March 4 session, titled The Power of Produce, at the Southeast Produce Council's Southern Exposure: The Marvel of Produce tradeshow and conference.
Held at the Swan and Dolphin Resort, the panel presentation also brought together Rick Stein, vice president of fresh foods for FMI — the Food Industry Association, who moderated the session; Jerry Callahan, group vice president of produce and floral for Albertsons Cos.; Robby Cruz, vice president of produce and floral for Target; and Jim Hancock, vice president/divisional merchandise manager for Sam's Club. The focus of the dynamic panel discussion was FMI's 2022 Power of Produce report.
“2021 was another unusual year,” said Roerink, kicking off the presentation. Last year, fresh produce managed growth over that “insane year” of 2020 — with numbers that are “incredibly strong” — even given the impact of rising inflation and supply chain issues.
Data and graphic courtesy 210 Analytics, LLC
“There are three levers of growth: you can get more people to buy it, you can get them to buy it more often, and you can get them to spend a little bit more,” said Roerink. “If you look at [fresh produce] units in baskets, we are seeing people looking to offset inflationary costs by buying a little bit less. They're walking out the door, spending the same amount of money, but they're buying a little bit less. [But] all in all, we have a very high household penetration.”
In terms of the hottest items in fresh produce, Roerink points to berries and salad kits, both of which saw “enormous growth” in 2021. These top sellers, along with on-the-go items and fruits and veggies made for entertaining, are all “back with a vengeance,” she said.
Sam's Club of Bentonville, Ark., is strategically devoting more space to popular items such as salad kits and berries, noted Hancock, who said the company is making a “huge investment to expand refrigeration-holding power for key items” at its nearly 600 Sam's Clubs in the U.S. and Puerto Rico.
Organic versus conventional
For years, organic has been outgrowing conventional, and that trend continued throughout the pandemic, said Roerink. This year will be a year to look for the pockets of growth. While it's going to be hard to beat sales during the height of the pandemic when everyone consumed most meals at home, organic appears to be one of those pockets, she said.
Looking ahead, the Power of Produce report finds that the majority of consumers expect to purchase the same amount of organic in 2022 as they did the previous year, while about one-third (33%) said they planned to buy more organic in 2021.
Read related: Price is No. 1 factor in produce purchasing decisions, FMI reports
And while inflation has continued to rise since the survey was conducted in October, and inflationary pressures can often trigger a plateau in organic consumption, noted Roerink, “these numbers in my mind are very positive.”
The report found that, among core organic consumers — those who look for organic all the time — 68% of those people think they will buy more in 2022. “These are the truly converted organic shoppers [and] they will make room in their budgets to continue to buy organic,” she said. “So, I think [organic] will still be a pocket of growth.”
Organic had a big year in 2021, said Callahan of Albertsons. With organic, customers will continue to pay a differential, he continued, adding that it's important to put organic into perspective.
“I tell my team, stop treating organic like it's special,” said Callahan. Organic is different, but it's not better than conventional, he added.
Local turns up the heat
As locally grown also remains a top claim and important attribute in fresh produce, the Boise, Idaho-based Albertsons goes deep and broad with the fruits and vegetables grown in and around the communities it serves.
With over 2,250 stores and more than 20 independently operated banners nationwide, the definition of “local” is different in each region, explained Callahan. At its United Supermarkets stores in Texas, hatch chile season becomes a major merchandising event, while the company's Idaho locations invite the farmers who neighbor its corporate headquarters to chat about produce in-store. Its Haggen stores in the Pacific Northwest have also held local events in which 30 to 40 local farms are represented.
Plant-based boom
The rise of the flexitarian diet and the increasingly widespread availability of plant-based foods — which have popped up everywhere, from fast food venues to local grocery stores — have helped make meat, seafood and dairy alternatives household names.
The Minneapolis, Minn.-based Target recently launched a plant-based line as part of its Good and Gather brand that is now valued at over $2 billion a year, said Cruz. Continuing to ideate, innovate and bring back more healthful, produce-based products to the consumer is critical, he added.
“We need to do a better job of helping guests to understand what [consuming produce] does for your diet and [consider] how we can continue to use fruits and vegetables to help them stay healthy,” he said. “It's an opportunity as an industry.”