A new year brings a renewed interest in the health benefits of produce, and retailers say the biggest shift in retail dollars is in the organic produce sector.
2023 ended strong, said Matt Fowler, produce category manager for Natural Grocers.
“Sales are looking to be up over last year,” he said. “We just ended the holidays at the end of the year on a high note, and everything availabilitywise is very good.”
That interest in organics at the end of 2023 rolled right into the new year. Fowler said greens and celery are major purchases for customers this time of year at the Lakewood, Colo.-based organic retailer.
“When the New Year happens, everybody has their resolutions,” he said. “We get a lot of people that will ramp up the juicing again.”
Ryan Peterson, director of produce and florals with Jimbo's, a San Diego-based organic retailer, said he's seen customers become more educated on the benefits of organic produce. Like Natural Grocers, Jimbo's also sees an uptick in organic customers at the start of the year as people make New Year resolutions to eat healthier.
“January is a great time for customer acquisition,” Peterson said. “In, January, we see a huge increase in our customer account. And it's our job to make sure they keep coming back and become lifelong Jimbo's shoppers.”
Produce trends
Fowler says value-added and grab-and-go produce, such as bagged carrots and oranges, are also popular for at-home juicers.
“We're seeing a lot of customers trending toward just picking up and going with stuff, especially right now, with juicing,” he said. “People are buying bagged oranges, bagged grapefruit that is great for taking those home to juice them.”
Peterson said value-added sales are down for Jimbo's, but one thing of interest is he's seen a growing demand for nutrient-dense foods such as sweetpotatoes. This may be due to bestselling author Dan Buettner's Netflix series, “Live to 100: Secrets of the Blue Zones,” and books that tout the health benefits of these tubers.
“Sweetpotatoes have been getting a lot stronger versus our traditional potato varieties like russets and Yukons,” Peterson said. “People are looking for more nutrients in their produce. We sell lots of garnet sweet potatoes. People are diving into the varietals too, like Japanese sweetpotatoes, purple sweetpotatoes, just to add some variety and different vitamins into their diet.”
There has been a growing demand for nutrient-dense foods such as sweetpotatoes, said Ryan Peterson, director of produce and florals with Jimbo's, a San Diego-based organic retailer. (Photo courtesy of Jimbo's)
Berries aren't a new trend, Peterson said, but organic berry sales remain consistently strong for Jimbo's.
“I feel like I say this every year that berries continue to grow, but berries continue to grow,” he said. “The quality issues that we might have seen five years ago, we don't see as much anymore. People are more confident in the product that they're buying.”
Peterson said brassicas are also another category where the sales volume reflects the health benefits of that nutrient-rich produce. Flavor is another key driver with organics, he said, noting organic premium apples are another category seeing an uptick in interest from Jimbo's customers.
“The SugarBee apples have been a huge hit in our stores the last three years,” he said. “We launched it about three years ago, and that's quickly become the No. 1 selling apple for all our stores. In the past, it started with a fuji and then went to a honeycrisp apple. But now, SugarBees have doubled honeycrisp apple sales at all our stores.”
Consumer awareness
Along with increased consumer awareness of the health benefits of the produce they're buying, both Peterson and Fowler said organic produce buyers are also more aware of and interested in learning more about the growing practices of the produce they buy.
“We are seeing a trend where a lot more customers are asking for local,” Fowler said. “They're invested in the origins of their food. They're interested in seeing where it comes from, how it was treated and how it got from the farm to their plate.”
Peterson said Jimbo's includes information on growing practices in the produce displays, which he said is vital information from growers.
“The more information that we have as a retailer from the grower or the producer, the more we can share and educate the customers on the products,” he said. “Letting the customers know and have the information in front of them is key to Jimbo's so that they can make the decision on what they want to buy, what they want to put in their body and what they want to support.”
Fowler said along with information on growing practices, Natural Grocers' customers are more interested in sustainable packaging.
“We continue to get requests from our customers and also within our organization to make that push toward more eco-friendly packaging,” he said. “It always comes down to a dollar amount, but I feel like the more people that get behind that demand for it, the more that they'll start to take those steps toward finding a solution that works for eco-friendly packaging.”
Optimistic outlook
Both Fowler and Peterson said the future is bright for organic produce.
“It seems like we're starting to back off of inflation, and people are starting to ramp up on [purchasing] organics again,” Fowler said. “It's been a roller coaster ride ever since the pandemic. We saw a lot of people buying organic, and then inflation hit and we started seeing people not buying so much in organics and keeping a close eye on spending. But now it seems like the inflation is starting to back off, and people are starting to drive organic produce sales.”
Peterson says he's noticed growers plant less labor-intense crops.
“Farmers are getting more careful about their crop planning and what they can get the most revenue from,” he said. “It's starting to affect some of the higher labor-intensive commodities' availability throughout the year.”
Peterson notes crops such as snap peas, grapes and sweet corn have had gaps in availability organically. And while Jimbo's sources as much of the produce from the San Diego area, there some gaps still emerge. He said this is an opportunity for Jimbo's employees to help shoppers.
“We ... let the customers know this isn't in season, we expect this back at this time of the year and this is why,” he said.
Peterson said he's also noticed more growers try to be the first to market with a new crop, which sometimes means the produce doesn't meet Jimbo's produce standards, so he'll reject it.
“We want to make sure that the fruit is the right maturity for our customers before offering it and then build trust with the customer knowing that what they buy is going to be great tasting,” he said.
Fowler also said retailers and growers need to work together to keep pricing competitive, yet reasonable to grab more of the produce retail dollars.
“We want to try to make sure that our organic produce is affordable for anybody to buy for their households,” he said. “We usually see the higher price tag on the organic stuff. But if we can make it affordable for anybody to come in and buy, that means [the grower's] product has finally ended up in the hands of somebody who might not have had organics before.”
Fowler said when customers taste the difference, they'll specifically seek out that grower.
“They're going to have that label in their memory for quality produce,” he said. “And is that what's going to bring them back looking for that specific grower? Absolutely.”
Opportunity with apples
Organic apple marketers say this season offers retailers a great position to grow interest and demand for organic produce.
“There's a lot of opportunity to set around organic specific promotions that would help grow the organic category on that item, said Brianna Shales, marketing director for Wenatchee, Wash.-based Stemilt. “Whereas last year, they were in tighter supply, and you just didn't have those promotion opportunities available.”
Stemilt also grows organic pears, cherries, peaches, nectarines and apricots.
Rochelle Bohm, vice president of marketing with Wenatchee-based CMI Orchards, said organics is a bright spot for produce retailers, especially as conventional apples remain relatively unchanged year to year.
"Sales are so strong for organics and especially branded organics," she said. "So, it is an awesome way for retailers to grab those sales they might be missing on the conventional apple side."
Bohm says organic managed apple varieties set CMI apart in the organic apple market. CMI offers organic apples, pears and cherries in its Daisy Girl packaging.
"We have a huge fan base for our Daisy Girl," she said. "We also do some co-branding with some of our managed varieties in the Daisy Girl brand — that's our Ambrosia, Kiku and Kanzi — to tap into the success of Daisy Girl with an organic offering for these high-flavor brands."
Kaci Komstadius, vice president of marketing for Yakima, Wash.-based Sage Fruit, said that while the company's organic Honeycrisp, fuji and gala sell well, she's noticed an increase in demand for organic managed SugarBee apples. Sage Fruit also markets organic pears.
“This season we will see an increase in our organic SugarBee volume,” she said. “Our organic program will continue to grow over the next several years to meet demand."
Understanding your buyer
Komstadius said Sage Fruit's data shows millennials make up the lion's share of organic produce purchases — about 52%. She says apple marketers offer different purchasing options to capitalize on the spend of millennial parents.
Shales said Stemilt offers Artisan Little Snappers, designed to meet that demand.
"It's a pouch-bag program," she said. "Three-pound sizes for either organic or conventional varieties of apples, and it's all marketed toward kids. It's small-size fruit in a very convenient package for parents and helps make apples that snackable item for kids' lunches and snacks."
Shales said there are two types of organic produce buyers: the opportunistic produce buyer making decisions based on price point and the everyday organic produce buyer. The challenge for retailers is to turn that opportunistic buyer into a frequent organic buyer.
“We really have to help them see organics as something top of mind, see it as a value, see it as a compelling enough reason to put it in their cart,” she said. “It's really about promoting organics frequently to grow your volume and dollar share of organics.”