HOLLYWOOD, Fla. — Alex Kalausich, produce lead for the fresh foods group for market research firm Circana, kicked off GOPEX 2024’s opening session with a broad look at the produce industry and consumer behavior.
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Kalausich said Circana’s quantitative research showed that, starting in 2023, 95% of households are concerned about food cost inflation and 38% of low-income households expect their financial situation will be worse off in a year from now.
“Perception is reality,” he said.
The behavior of today’s shoppers also is changing, he said. The average American household made 199 shopping trips a year, up 11.1% from three years ago. Though consumers are shopping more, the average basket size is down about 26%.
Kalausich said consumers are exploring more classes of trade to buy groceries.
“Nearly half of produce shoppers choose other retail classes and trade channels to buy their products,” he said.
Shoppers filled nearly one-third of every shopping trip with produce, Circana’s data showed, and eight out of every 10 items of produce are a combination of fresh fruits and fresh vegetables.
Convenience is a major area of growth, Kalausich said. Value-added vegetables, melons, broccoli and berries are growing as consumers want to eat healthy without spending a lot of time assembling meals.
“Value-added is the easiest way to adopt that convenience trend and authentically convey that to the shopper,” he said.
Other notable trends, Kalausich said, are the increased growth in cooking and snacking vegetables, green grapes, tropical fruits and citrus. He said out of 20 top organic subcategories, organic bananas, organic cucumbers, organic broccoli, organic arugula and organic berries have bucked inflation trends and continue to grow.
Kalausich said his 2024 outlook for the fresh produce industry shows growth of 2% to 4% in dollar sales, growth of about 1% in volume sales and 1% to 2% growth in price per volume.
“It looks a lot like 2023,” he said. “If we have average as our baseline, what would you do if you knew you couldn’t fail?”
Kalausich said this is where tapping into the shopper, particularly the conscious consumer, comes into play.
“We have to think about the shopper, because as much as we love to believe that we are providing a product that will find a niche, and we are influencing the shopper, a lot of times they're influencing us and we're reacting,” he said.
Understanding the conscious consumer
Kalausich said Circana also segments consumers to help identify key variables in beliefs to help understand shopper’s behavior. One segment of interest to organic produce growers, shippers and retailers is the conscious consumer, who believes strongly in health and wellness.
“The conscious consumer is 39% more likely to purchase produce than every other segment,” he said.
What’s interesting, Kalausich said, is that this conscious consumer reaches a wide swath of generations, incomes and family sizes.
“As time progresses, especially with these younger generations, we suspect this conscious younger consumer will be a little bit different than the older demographics,” he said.
Organics are a key component of a conscious consumer’s buying habits, Kalausich said. Other notable themes include sustainability and products offered in recycled paper.
“Younger shoppers will be the sort of catalyst for sustainability and all the attributes around it being mainstream,” he said. “The popularity and sustainability marketing of products is not going to go away, and it will be driven by millennials first than Gen Z.”
Kalausich said he sees younger, metropolitan and affluent millennials focusing on that sustainability connection with the products they buy; retailers and growers need to tap into this by sharing the efforts already in place within their operation in a way that feels natural and authentic.
“That will be 100% where that connection point comes from,” he said of developing a connection with the conscious consumer.