A November webinar from Circana focused on trends in fresh foods, highlighting value-driven consumer behaviors, strong growth in fresh produce sales and an increasing influence of multicultural shoppers, showing that fresh departments have significant opportunities to engage this key demographic.
Jonna Parker, fresh foods team lead for Circana, opened the discussion with a look at why shoppers are still value-minded.
“Consumers, as we've gone through 2024, are still doing behaviors that are value-minded, that are very much still colored by inflation," she said. "But I do think that fatigue, not just with inflation, but with this decade — having had so many disruptions in what was their normal lives before — are still showing colors and how they, as we go through today, manifest what they choose to buy, what they consider to be of value and what they consider to be a worthwhile splurge.”
Parker said today's consumer is going to stores that are most convenient to them and that they perceive to have value.
“I get asked often, ‘What are some of the big takeaways in fresh right now?’ And I think this is the inflection-point moment where [we're] getting more proactive with managing our price and not just letting our supply dictate if we're going to do a sale — or doing a sale that we did two years ago ... ,” she said.
According to Circana’s September monthly survey, 96% of households are concerned about food price inflation.
“This number not only is historically high, it actually continues to tick up," Parker said. "Furthermore, outlook is pessimistic; we're at 74% of consumers that, regardless of what the economic news says, feel that the economy will go into a recession and or will be less robust in months to come.”
Another piece of data that Parker says surprised some, but makes sense from the consumer perspective, is online shopping. “While 64% of consumers are shopping in-store exclusively, 36% are mixing in-store and online or online exclusively.”
Parker said younger generations, people under age 35, are the majority of consumers mixing online and in-store shopping.
“Why that's important is it has allowed consumers across the income spectrum to manage how many items and total cost they are putting in their cart," she said. "If you do that online, it's far easier to watch your budget than it is in store, and for fresh, not only are we less showroomed online often than maybe CPG or other foods, we also are not necessarily what people think of first when they shop online. So, including the online shopping experience and making it a great journey in fresh is going to be a key up-forward strategy in the future.”
Fresh is incredibly important to consumers, Parker said, even in the macro landscape of all that they spend.
“In fact, when we look at year-over-year dollar percent change across all consumer categories, fresh foods is No. 4 in absolute dollar change, and it is 1% higher in units, which the only other industry that can claim unit growth this past year is pet care," she said, noting that fresh food is outperforming other consumer sectors, especially another food sector.
Parker said data showed fresh common fruit — apples, grapes, bananas and berries — sold millions of dollars more this year than the prior year.
“Fresh is an incredible powerhouse in terms of generating more unit growth year over year," she said. "Fresh common fruit is second only to energy drinks. So, for fresh common fruit — fruit that is sold in the produce department 52 weeks a year, your basic fruits — to be the second unit growth category in all things a consumer buys, [that] really shows you its power.”
Multicultural influence
Kelly Krumholz, perimeter client insights consultant for Circana, discussed the growing importance of the Hispanic population, which is projected to represent 27% of the U.S. by 2060.Krumholz identified this as a significant market segment, contributing 13% to fresh dollar sales. Hispanics prefer value, convenience and products that cater to diverse tastes within their households. Opportunities for fresh departments include leveraging cultural holidays and embracing multicultural flavor trends to enhance consumer engagement and sales.
“We spent this year talking about a variety of key consumer segments, and we would be amiss not to talk about multicultural and Hispanics, a critical and growing portion of our population here in the U.S. ... and what's interesting about this is that this [population] growth is not driven by immigration, it’s driven by birth, and that's going to impact our generations to come," Krumholz said.
“Our younger generations — our alphas and our Gen Zers — now already are at that 27% mark of the population, and they're just going to keep getting more and more diverse," Krumholz added. "As these younger generations become more diverse, it's going to change the cultural influences and their tastes and preferences.
Not only are multicultural groups growing faster, Hispanic, African American and Asian consumers are all contributing more to fresh dollar sales, Krumholz said.
The Hispanic population is diverse, Krumholz said, with different cultural roots influencing tastes and preferences, particularly in fresh foods.
Krumholz said 1 in 4 Hispanic households are multigenerational, which contributes to a larger household size overall compared to the average home, and are more likely to have children present. Along with looking for products offering a better value, "they're looking for products and retailers that help them satisfy a variety of different tastes, because they're not just dealing with a typical parent and child, but you might have grandparents in the home along with those children, and this influences their overall purchase drivers," Krumholz said.
Club stores and online shopping are favored by Hispanic shoppers, Krumholz said, due to their larger household sizes and the variety and value they offer.
Krumholz said Hispanic shoppers are loyal to products and brands connected to their cultural heritage, with a strong preference for fresh ingredients and less-processed foods. Opportunities exist for fresh departments to tap into cultural celebrations like Cinco de Mayo, quinceañeras and Día de los Muertos, offering relevant products and promotions.
“There's a huge opportunity here, as we think about the future, about broadening with whom fresh engages with, and how, when we start thinking about young shoppers, particularly multicultural and Hispanic [segments]," Krumholz said. "There's so much upside to engage them further with fresh, and part of that's going to come from how we tactically and strategically think about it.
"There are so many more areas to look at, but there can be mass appeal through recipes, offering inspiration, offering more tailored assortment with authentic products and ingredients, even store within a store, placements that not just bring certain products together, but also could potentially be bilingual," Krumholz continued. "There are so many things we could be doing as we think about the future, and we're so excited to see what happens here in 2025.”
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