The Apple Of Their Eyes

Value-added items continue to gain traction with fresh-focused, convenience-seeking shoppers.

These days, the fastest growth category in produce is convenience. “Cut,” “washed,” “trimmed” and “prepped” comprise the lexicon that's driving busy consumers to buy bagged salads, vegetable medleys, microwaveable green beans, fresh-cut fruit and healthy snack packs.

While the down economy of recent years has led consumers to cut back on some supermarket spending, they're more than willing to pay a premium for prepared fruit and vegetables. In the past five years, both value-added fruits and vegetables have registered healthy dollar growth. According to a Perishables Group “FreshFacts” report powered by Nielsen, prepared fruit and prepared vegetables have shown dollar growth of 15.2 percent and 22.6 percent, respectively, since 2006.

The Perishables Group, an independent consulting firm, based in West Dundee, I11., has also found that more consumers are adding value-added produce to their shopping carts, according to its “FreshFacts Shopper Insights” report powered by Spire, which notes that household penetration for prepared fruit rose 4.9 percent in the 52 weeks ending Dec. 25, 2010, while household penetration for prepared vegetables increased by 3.4 percent for the same period.

Americans' heightened interest in foods offering a health benefit is also propelling the category. Consumers have become more aware of the “Eat This, Not That!” no-diet weight-loss lifestyle, and as a result, supermarkets are reporting increased sales of healthier produce-based snack alternatives. Better nutrition married with greater convenience is wedding consumers to value-added fruits and vegetables like never before.

The Surge in Healthier Snacking

Individual snacks are the third-largest segment in the convenience vegetable category, and have the fastest growth rate, notes the Perishables Group. In addition, individual snacks are the only subcategory to provide consistent three-year growth in the convenience vegetable category.

At Wegmans' Downingtown, Pa., store, value-added fruits and vegetables occupy substantial real estate in the produce department. More than 44 linear feet of refrigerated cases are devoted to convenience items like juice and cut fruit, trimmed Brussels sprouts, a store-branded bok choy stir-fry mix, grilling vegetables and more. The supermarket chain, based in Rochester, N.Y., has also devoted a case to “Salad Snackers.” Here, consumers can find Love Beets Snack Trays, Taylor Farms Apples & Caramel Cream Dip With Granola, a variety of Ready Pac Bistro Salads, and Wholly Guacamole, among other items.

Does Jay Alley, VP of retail operations for Saginaw, Texas-based Wholly Guacamole, see value-added produce as a growth category? “Absolutely,” he says. “We are growing at double-digit increases. Consumers want convenience, and that is exactly what value-added is all about.”

Alley finds that retailers with proven sales in value-added refrigerated guacamole employ a multi-pronged marketing strategy that includes the use of secondary displays when the product is on promotion, POS materials, social media, and TPR tags offering small discounts.

Myriad new product introductions in produce-based snacks are also fueling consumer interest in quick and easy nibbles with a decidedly healthful slant. “Young people and families with busy lifestyles will continue to look for right-sized, pre-cut and prepared produce for convenience and ease of preparation,” asserts Don Brumley, value-added products director for Colorful Harvest (Green Giant Fresh) in Salinas, Calif. The supplier recently introduced Heirloom Carrot Snack Chips, which offer five 3-ounce packets of sunny-hued heirloom carrots in a convenient grab-and-go clamshell.

Del Monte, based in San Francisco, has created an entire line of grab-and-go products to meet the growing demand for convenient, fresh and healthy snacks. Its most recent addition is Del Monte 4 Pack Fresh Cut Fruit Cups, an all-natural product line that contains no preservatives, additives or sweeteners.

“Convenience, snacking and nutrition are trends that continue to drive this category,” says Del Monte VP of marketing Dionysios Christou. “Also, many produce items are usually impulse buys, and this is especially true with value-added fresh-cut produce. Since fresh-cut fruit and vegetable mixes are ready to eat, they easily lend themselves to the on-the-go consumer who is looking for a quick and convenient healthy snack.”

Elena Hernandez in the marketing department of Mann Packing Co. Inc. agrees. “Consumers are looking for versatility, portability and functionality,” she says. The Salinas, Calif.-based company recently relaunched its Snacks On The Go! line at an improved price point and in a greater variety of package sizes, particularly smaller servings.

Fresh-cut Takes Flight

Get Gordon Hunt, director of marketing/communications for the National Watermelon Promotion Board in Orlando, Fla., talking about supermarket fresh-cut produce programs, and his enthusiasm is irrepressible. “This is where you're really going to make money!” he exclaims. “You don't need to hire an expensive chef. Anyone who knows how to use a knife can make a profit with watermelon. Every time you cut it, you add value.”

This is the thinking behind B&R Stores' new fresh-cut fruit and vegetable program. The Lincoln, Neb.-based chain began rolling out its fresh-cut daily offerings in May. “Even in this economy, people still like convenience and are willing to pay a higher price for it,” says Marty Jarvis, B&R's director of marketing. “Concerns about health have also driven the category. If you want a healthy snack, you come to the produce department rather than the chip aisle.”

On the fruit side, B&R's fresh-cut program includes a wide range of offerings such as watermelon, mixed berries, pineapple and seasonal combinations. Value-added vegetables run the gamut from carrot and celery crudités to stew mixes and stir fries. Each store has a minimum four-foot section designated to fresh-cut, and, depending on the store brand, features signage reading “Healthy Lifestyle” or “Life Made Better.”

B&R witnessed an immediate sales bump when it launched its fresh-cut program. “All the stores testing fresh-cut are getting a lot more sales than in our other stores,” observes Jarvis. “You make it easy for customers to cook, you make it foolproof, and it sells.”

One reason for B&R's boost in sales may be that value-added produce shoppers spend more than their non-value-added-consuming counterparts. According to the Perishables Group's “FreshFacts Shopper Insights” powered by Spire, the average basket ring for customers who bought prepared fruit was $76.21 for the 52 weeks ending Dec. 25, 2010. Meanwhile, the average basket ring for shoppers who purchased prepared vegetables was $83.34 for the same period. That's more than double the $41.44 average supermarket basket ring per trip in 2009, as tracked by Nielsen Homescan.

Organic Prepared Fruit

When it comes to organic produce, fresh-cut fruit is leading the pack. According to the latest edition of “FreshFacts on Retail,” the quarterly retail research report of the United Fresh Produce Association, the organic prepared-fruit category is headlining growth in produce, with weekly dollar sales up 83.4 percent and volume up 46.2 percent. The organic category as a whole accounts for 4.5 percent of all produce sales.

The new Alfalfa's Market in Boulder, Colo. (PG's Store of the Month, starting on page 12), has big plans for its value-added organic produce — so much so that the natural food supermarket designed a special area of its kitchen for the program. “We have a produce prep area with two sinks, one for organic and one for conventional,” explains Alfalfa's spokeswoman Sonja Tuitele. “We plan to really focus on fresh-cut vegetables with dip, as well as cut fruit as we move forward,” adds Tuitele, noting that these offerings will be rolled out over the next three months.

Valuable Onion Options

Value-Added, Vidalia-style

What are the latest and greatest value-added Vidalia onion products? According to Wendy Brannen, executive director of the Vidalia Onion Committee in Atlanta: “There are so many wonderful processed Vidalia onion products on the market now, from sauces to relishes to salad dressings. We have seen them do very well when cross-merchandised in produce.”

One of the most popular sellers is a blooming-onion kit that includes a cutter and batter for creating this restaurant favorite at home. “People write to us all the time asking where they can find the kit,” notes Brannen.For summer merchandising of Vidalia onions, Brannen suggests building displays that promote grilling, as well as refreshing dips and salsas. One of her favorite ways to entertain with onions is to open a bag of tortilla chips and serve them with peach-and-Vidalia-onion salsa. Simply cross-merchandise pre-cut Vidalia onions with the other necessary ingredients in the produce department, offer recipe cards, and send your happy customers off to backyard barbecues.

T&A Redesigns Onion Packaging

Tanimura & Antle of Salinas, Calif., has revamped consumer packaging for its Artisan Sweet Italian Red Onions. The company's consumer bags, display cartons and new retail floor display bins have all been redesigned to communicate the onion's value, flavor and quality.

The high-impact graphic retail floor bins give retailers a chance to cross-merchandise onions throughout the store, with meal suggestions shown on the bins. A QR (Quick Read) code, is included on all packaging elements to offer consumers an immediate opportunity for more information.

By linking to the Artisan Sweet Italian Red Onion product page on the Tanimura & Antle website, consumers can scan the code with their smart-phones and access additional product information, a field tour and recipes.

Gills' Sweet Promo

Gills Onions, an Oxnard, Calif.-based supplier of fresh-cut onions, has launched its first consumer product promotion, “Sweet Spring Arrivals,” as a platform to communicate with Facebook fans about its 6-ounce sliced sweet onion product.

Gills Onions recently ramped up its social media exposure to take advantage of the conversations happening with millions of consumers every day on social media platforms such as Facebook and Twitter. “We've realized for some time the powerful voice that social networking offers companies like ours,” said Nelia Alamo, director of sales and marketing. “We are excited to finally be taking bigger advantage of these marketing tools and using them to tell our grower story.”

Gills' sliced sweet onions are typically available from late April through September each year. These California-grown onions are known for their mild, sugary-sweet taste.

Value-added Veggies Make the Meal

Value-added vegetables are also gaining favor with consumers who have curtailed their restaurant spending and want fresh, easy meals that can be made at home in minutes. Paying a bit more for pre-cut vegetables is still less expensive than dining out, and there's the additional satisfaction that comes from preparing a home-cooked meal.

Renaissance Food Group in Rancho Cordova, Calif., has introduced what president and CEO Jim Catchot calls “the next level of innovation within the value-added category.” The group's Chef Essentials fresh, value-added side dishes are easy to prepare and can become main courses by adding chicken, beef or pasta. All of the dishes, like an asparagus sauté with crimini mushrooms and onions, include simple recipes that recommend a protein.

“The growth of this category is fairly accelerated,” notes Catchot, who sees supermarkets and suppliers collaborating to build momentum. “Retailers are working closely with manufacturers to present value-added in a cohesive way, so the consumer goes into the produce department and knows where to look. It's good for everyone — the manufacturer, the retailer, and the consumer who can enjoy fresh, nutritious food that cooks in minutes.”

Salads a Go-Go

While bagged and packaged salads experienced a slight dip (-0.8 percent) in dollar sales for the 52 weeks ending Feb. 26, the Perishables Group notes that these products remain the largest sales category within value-added vegetables.

Suppliers continue to evolve the category, adding greater convenience and healthy options to their lines. Consider Ready Pac's new line of Salad Singles, each of which contains fewer than 200 calories, according to the front of the package, plus toppings, dressing and a fork, allowing consumers to pop open the bowl and eat on the go. The Irwindale, Calif.-based company's salads come in four varieties: Garden, Caesar, Fiesta and Spinach Dijon. (The item is also featured in this issue's What's Next section, starting on page 159.)

Tristan Kieva, director of marketing for Ready Pac Foods, sees continued growth as Americans look to value-added produce as a more affordable alternative to eating out. “As consumers have shifted their behavior toward more cooking at home, their need for high-quality items and ideas continues to increase,” she says. “For example, within the bagged salad kit offerings, many consumers can find their favorite restaurant flavor profiles and take them home to prepare for their families.”

Whether implementing an in-store fresh-cut program or taking advantage of the multitude of delicious offerings from manufacturers of prepared produce, grocers of nutritious value-added products are turning convenience into healthy profits.