Fresh-Cut Fever


Convenience and innovation spur fast-paced growth in value-added produce.

Double your sales, double your fun.

Value-added fruits and vegetables are the dynamic duo of today's produce department, ushering in a new era of convenience, healthfulness and panache. Innovation plays a key role here, as this cutting-edge category promises to engage shoppers like never before.

Consumers have responded to the spate of well-merchandised, fresh and flavorful offerings in fresh-cut produce by channeling more of their purchasing power into the category. "Value-added or cut fruit and cut vegetables are some of the strongest performers over the last 52 weeks," says Steve Lutz, Nielsen Perishables Group EVP. "They're in the 5 percent-to-7 percent growth range, which is pretty good for a department growing at about 3 percent. It's about double the rest of the department."

According to the United Fresh Produce Association report FreshFacts on Retail Whole and Fresh Cut Produce Trends: Q4 2011, dollar sales for value-added fruits were up 3 percent in the fourth quarter of 2011, as compared with Q4 2010. Fresh-cut fruit was the front-runner in value-added fruit sales, accounting for more than three-quarters of the category's dollar sales in the fourth quarter.

Value-added veggies posted even more impressive stats, thanks in large part to side dishes, which comprised more than half of value-added vegetable sales. Dollars and volume for value-added vegetables rose at least 7 percent during Q4 2011, compared with the same quarter a year ago. As pricing on the category remained unchanged, these numbers reflect true growth in the category, notes Washington, D.C.-based United Fresh, which teams with Del Monte Fresh Produce and the Nielsen Perishables Group to publish the FreshFacts report.

Salinas, Calif.-based Green Giant Fresh is one of a number of suppliers sweetening the side dish value-added sector with its recent introduction of Sweet Carrot Slaw, featuring shredded carrots, broccoli and red cabbage. Also new from Green Giant is Tri-Color Slaw, a medley of shredded broccoli, green and red cabbage, and carrots.

Fresh for spring, Mann Packing Co., also based in Salinas, has introduced two new items to its line of fresh, washed, ready-to-eat vegetables: Brussels sprouts in a microwave-steamable bag and a new blend of Rainbow Salad that adds mini broccoli florettes to the shredded carrots, cabbage and cauliflower mix.

Adding Value With Organics

The fourth quarter of last year also witnessed phenomenal growth in organic produce sales, which according to FreshFacts posted double-digit dollar growth, as compared with Q4 2010. Organic vegetable volume sales grew 9.6 percent in Q4 2011, while dollar sales were up 11.4 percent. Organic fruit dollar sales increased 23.2 percent in Q4 2011, as compared with Q4 2010; volume, meanwhile, posted a near 20 percent increase.

The opportunity in value-added isn't lost on organic produce suppliers like Earthbound Farm of San Juan Bautista, Calif. The company recently introduced Organic Dippin' Doubles, a portable snack featuring organic produce and dips that target both kids and adults. The new line comes in three varieties: apples and peanut butter, apples and yogurt, and carrots and ranch dip.

A Fresher Image

Given its current popularity, it's easy to forget that value-added produce wasn't an overnight success story. Jeff Oberman, VP of membership and trade relations for fresh-cut at United Fresh, and his fellow fresh-cut processor board members have devoted years to redefining the image of value-added produce.

"In 2008, we worked with Harris Poll to reach out to consumers to see what they thought about fresh-cut in comparison with whole commodity canned and frozen produce," recalls Oberman. "Consumers told us that they weren't thrilled with fresh-cut." In fact, the United Fresh Foundation's research project found that fresh-cut produce ranked lower than whole produce in all areas except convenience.

With the goal of changing these negative consumer perceptions, the United Fresh-Cut Processor Board launched a working group to develop counter-messaging. Its new message focuses on convenience and value, health and safety, and farm freshness. "Our goal is to have all processors go out with a unified message," Oberman says. "So, for example, the from-the-farm message lets consumers know that value-added produce doesn't just come from a factory."

The findings of the research project and other value-added-relevant data are now available in a new report from United Fresh,Image of Fresh-Cut Toolkit, available through the association's website at

The Other Apple

When asked whether the market can expect to see continued growth from value-added produce, Bryan Silbermann, president/CEO of the Newark, Del.-based Produce Marketing Association (PMA), responds: "Absolutely. Maybe not as much as the stock price of Apple computers, but it's a strong category. There's an awful lot of upside potential here."

While the growth in value-added has been across the board, industry experts agree that healthful snacks is one of the fastest-growing segments. "Healthful snacks are absolutely huge," notes Silbermann. "And sliced apples, of course. When you see them at McDonald's, it shows just how far apples have come." Add to that items like fruit-and-dip combinations, veggie-and-dip combos, and party trays, and Silbermann sees even healthier sales on the horizon.

"Where we see growth is in healthy snacks," United Fresh's Oberman concurs. "Out-of-home snacking has been huge," not only with cut fruit and vegetables, he says, but also in the innovative packaging that positions items like cherry tomatoes and blueberries as portable snacks.

As more Americans eschew chips and candy bars in favor of fresh food, the opportunities in value-added produce will undoubtedly continue to abound. "It's really about environmental change," asserts Oberman. "Michelle Obama's 'Let's Move' campaign has been huge for produce, and the MyPlate campaign ties in exactly with what we're trying to accomplish. In this environment of change, the industry asked consumers what they wanted, and we listened to them."

Constant Cravings

Consumers want time-saving healthful products, great value and plenty of selection, observes Silbermann.

"Convenience is time and preparation, which is critical. It's also transportability," explains Silbermann. "Value is getting a product that is 100 percent usable. In the variety/ experimentation piece, it's a great opportunity to introduce consumers to products they've never used and, if they saw it in its whole state, wouldn't know what to do with it."

Dionysios Christou, VP marketing for Coral Gables, Fla.-based Del Monte Fresh Produce agrees. "By making produce ready to eat, you put fruit and vegetables in the hands of consumers who might not have purchased whole produce due to lack of time, lack of knowledge on how to prepare it, or, for small families and singles, the inability to consume all of the whole product," he says. Del Monte has seen continued growth in its fresh cut Del Monte Gold Extra Sweet pineapple program, which is available in a variety of sizes and packaging.

Consumer willingness to experiment with flavors and textures in conveniently packaged value-added produce is especially evident in the area of microwavable vegetables, Silbermann notes. "A big one is ethnic flavors, especially with microwave-ready vegetables," he says. "We're seeing spicier, stronger flavors than have been used in the past."

Fueled by competition from everything from fast-food restaurants to family dining concepts, supermarkets and their suppliers are stepping up their game on the gourmet-to-go side of fresh-cut. As a result, many of today's value-added produce introductions reflect the tastiest restaurant trends, Silbermann says.

Innovation and Entertainment

"Constant innovation on the supply side in terms of packaging and flavors" is another impetus to growth in this category, Silbermann further asserts.

Supermarkets have also played a pivotal role in the success of value-added produce. Grocers are allocating more space to these products and merchandising them in fresh, appealing and effective ways.

Silbermann finds that today's produce department looks more like a gourmet deli than the tried-and-true produce section. Better product placement, vibrant displays and creative cross-merchandising have all contributed to boosting the department's bottom line. But perhaps the most marked change has to do with entertainment value.

"The evolution of the produce department in the last 20 years has been significant," says Silbermann, who sees value-added as a key player in this coming-of-age story. "There's the preparation of vegetables in front of the customers that they can take home and eat that night. There's excitement."

The Value in Value-added

Years ago, consumers perceived value-added produce as products that, while convenient, also commanded a premium price. Today, it seems the category has become a value proposition.

"Value-added produce ties into the broader social trend of consumers looking at the life cycle cost of products. It ties into sustainability," notes Bryan Silbermann of the Newark, Del.-based Produce Marketing Association (PMA). "Consumers realize it's not just the cost of the item, it's how much they use it. With value-added, they use all of it."

United Fresh presents a compelling case for the value and sustainability of fresh-cut fruit and vegetables in its new Image of Fresh-Cut Toolkit. This report breaks down the cost of shipping fresh-cut broccoli versus bulk. For example, one truck can carry a total of 44,800 pounds of iced broccoli crowns, while the poundage for one truck of fresh-cut broccoli is 22,680. What's more, the total pounds of usable broccoli on the truck carrying iced crowns are 22,400, as compared with zero reduction for the truck carrying value-added broccoli.

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