As the grab-and-go and value-added space continues to evolve, retail foodservice providers say demand for ready-to-eat fresh produce continues to grow.
At the 2024 West Coast Produce Expo, Jonna Parker, team lead of fresh foods at Circana, said that while 95% of U.S. households indicate concern about food cost inflation, 61% of every dollar a consumer spends on food and beverage is for items sold at retail and eaten at home. Parker also shared that 39% of food spending occurs at foodservice, with consumers sourcing 14% of eating occasions away from home.
Mark Kowalkowski, corporate executive chef for Oliver's Market, agrees, noting prepared foods help the busy consumer do more while eating healthy.
“Our grab-and-go program continues to grow ahead of other areas in our deli department,” he said.
Susie Rea, sales and business development for Index Fresh, says while consumers want low-fuss meals, they still want to incorporate fresh produce into their busy lives.
“Consumers prioritizing health and avoiding unhealthy fast-food options are also choosing to spend their money on meals prepared by retail grocery stores,” she said. “This approach offers the ideal mix of home-cooked quality without extra additives, catering perfectly to those with busy schedules who do not have the time to prepare meals from scratch.”
And Kowalkowski says a lot of that demand for fresh produce within retail foodservice is driven by consumers' interest in cutting down on food waste.
“Prepared foods and salads allow busy customers to buy fresh items in portions that fit their needs,” he said. “No preparation time is needed, increasing the odds that the food will be consumed and not wasted.”
Foodservice is playing a bigger role in snacking, too, says Parker, who notes consumers source 64 snacks a year from foodservice. She says fresh produce can easily play a key role in consumers' interest in snacking.
“We've also seen a revolution, and I think it should continue, with C-stores and small-format stores offering snacking items, especially in produce,” she said. “People want snackable fruits and vegetables in relevant places where they already [are.]”
Challenges
Rea says with the focus on freshness, retail foodservice providers often face the challenge of keeping produce as fresh as possible from farm to table. Index Fresh says it works with retail foodservice providers to ensure the produce delivered has the “wow” factors consumers expect.
“Maintaining optimal temperature and humidity to prevent rapid breakdown is essential for all items,” she said. “Balancing the demand for an item against product availability without sacrificing quality and keeping a watchful eye on cost management are factors that, when combined, require a unique skill set and one that won't be eliminated anytime soon.”
Rea says food waste is always a big concern for retail foodservice providers and suppliers, but it's a great opportunity to find a home for imperfect produce.
“Retail foodservice operators do a great job taking advantage of fresh produce that would not be accepted by a retail shopper due to aesthetic reasons,” she said. “In the case of avocados, even with a minor skin blemish the fruit maintains premium flesh perfect for plated meals and premade avocado spreads. Foodservice creates an important outlet for produce that would otherwise go to waste.”
Index Fresh offers a SoGood line for foodservice, which has a slightly blemished external peel but an internal flesh quality of its Grade 1 avocados, she says.
Opportunities
That freshness is a key opportunity for the fresh produce industry says Rea, as consumers continue to flock to foodservice items.
“The biggest opportunity with fresh produce in the foodservice space is the significant growing consumer demand for healthier, fresher, and more sustainable food options,” she said. “Meeting consumers where they are is a great way to capitalize on these growing trends. Eating out no longer means having to eat unhealthily.”
Rea says retail foodservice operators should consider adding local and organic offerings to engage customers. Seasonal produce, too, helps differentiate from competitors and offers enhanced options for customers.
“Seasonal menu development is one of the more creative ways to move the needle on fresh produce consumption through retail foodservice,” she said. “Seasonal menus continue to trend positively across foodservice channels from fast casual to fine dining. Incorporating fresh produce into these limited-time offerings is a great way to drive additional sales.”
Kowalkowski says the seasonal salads Oliver's offers feature peak flavor items such as stone fruit, local corn and tomatoes.
“Traditional seasonal produce items that we can incorporate into the program are always popular,” he said. “We have seen a large increase in our salad bars this year, which creates a vibrant quick option for our customers. We also have a large line of prepacked salads that does increasingly well.”
Earlier this year, Oliver's launched a line of low-carb dinners, which Kowalkowski says have performed well along with organic offerings.
“We continue to source a wider variety of organic items for our salad bars,” he said. “The organic percentage in our produce department has overtaken conventional and continues to grow.”
Rea says data from Mintel shows that 40% more people eat breakfast away from home, which is an excellent opportunity for retail foodservice.
“Breakfast is back, and it's now an all-day occasion,” she said. “Foodservice operators are refreshing breakfast menus and continuing to prioritize healthy options — cue the avocado toast and heart-healthy toppings — to make grab-and-go egg sandwiches shine. Hybrid work has blurred the typical breakfast hours, and now more restaurants are offering breakfast menus all day with classic items and innovative plant-based takes on morning favorites.”
Future of foodservice
Rea says retailers across the country have added home-cooked meal options to meet the increasing demand for retail foodservice offerings — and she doesn't see the demand slowing any time soon.
“We are optimistic that foodservice consumers prioritizing healthy eating are here to stay,” she said. “We anticipate that plant-based menus will continue to trend positively and love seeing new flavor extensions introduced to ever-popular guacamole sides.”