Horn of Plenty

Meg Major, EnsembleIQ

10/11/2014

Though the average supermarket fresh produce department has been riding a wave of unprecedented gains during the past 12 months, retail category executives are modestly cautious about getting carried away by the possibilities of ever-riper category growth for the balance of the year, according to consensus viewpoints expressed in Progressive Grocers 2014 Retail Produce Review.

While fresh produce has long been the crown jewel of most supermarkets? overall fresh statement, the department is progressively taking on an even greater role in light of heightened consumer desire for more nutritious, less processed foods. And though fresh produce purchases continue to reign supreme for main meals, a growing number of consumers are embracing smaller meals and snacks, and are turning to conveniently packaged fruits and vegetables to fill the bill.

To take full advantage of the plentiful opportunities abounding thanks to higher fresh vegetable and fruit consumption, savvy store leaders are playing up sensory cues with more impactful displays accentuating a global ? and, as often as possible, a local ? bounty.

Mindful that the department is a top factor for today?s consumers in deciding where to shop, retail produce directors can ill afford to rest on traditional tactics to ensure that their stores? fresh produce proposition is maintained. That?s why many are turning up the wattage on planned investments of energy-efficient lighting, cases, signage and mobile merchandisers, as depicted on the chart on page 120 ? just one of several important takeaways revealed in this year?s Retail Produce & Floral Review.

Results for PG?s exclusive, retailer-driven produce study were once again calculated from the direct input of a cross-section of national, regional and independent category leaders responsible for their stores? produce procurement decisions. Responses to the annual benchmarking study, which unfolds on these pages, captures average sales and operational performance data for the 12-month period ended July 2014. The study also features 52-week point-of-sale data from Nielsen Perishables Group FreshFacts, which appears on page 124.

Among the key highlights of this year?s annual produce survey, 75.7 percent of PG?s produce survey participants confirmed stellar performance during 2014 thus far, while 9.2 percent reported declines, rounded out by 15.1 percent whose produce sales are holding the line with last year?s. However, when asked what they anticipate will unfold with produce department sales during the most influential selling period of the calendar year (Q4), 70.7 percent of panelists expressed a more cautionary view, alongside 26.8 percent who anticipate status quo sales for the remainder of the year, offset by a mere 2.4 percent who foresee potential sales declines.

Further, as depicted on the chart on page 120, while retail produce teams are increasingly stocking more ready-to-eat convenience products ? such as packaged salads (9.6 percent), organics (7.2 percent), local (5.5 percent), fresh-cut fruit (3.7 percent) and veggies (3.5 percent), store brands (2.6 percent), and specialties/exotics (2.2 percent) ? random-weight vegetables and fruit, at 28.5 percent and 28.2 percent, respectively, are still driving produce sales.

And although floral sales contribute an average 2.1 percent to the parent produce department?s total pie, things are coming up roses for 40.8 percent of retail panelists, as noted on the chart on page 120, alongside nearly the same (37.5 percent) who reported steady comparable floral category sales, good for a 1.8 percent overall gain. The remaining 21.7 percent, however, reported decreased floral sales.

During the latest 52 weeks, fruit accounted for 46.9 percent of produce sales and vegetables accounted for 43.1 percent. However average vegetable dollar sales growth (4.9 percent) outpaced fruit growth (3.5 percent).

Within the fruit super-category, the majority of categories increased average weekly dollar sales, and increased or maintained average weekly volume sales. Avocados posted the largest dollar increase, as a result of a 14 percent average retail price increase. Value-added fruit and pineapples also posted strong dollar sales growth during the latest 52 weeks. Value-added fruit increased average dollar sales by 9.4 percent, in part due to a 4.6 percent increase in average retail price ? however this did not negatively impact volume sales, which increased 4.7 percent. Pineapples increased average dollar sales by 8.6 percent and volume by 16.7 percent, partly because of a 6.9 percent decrease in average retail price.

Within the vegetable super-category, the majority of categories increased both average dollar and volume sales, and average retail prices increased or remained steady in all but one of the 19 vegetable categories. Value-added vegetables and cooking vegetables (which includes products like kale, spinach and collard greens) both increased dollar and volume sales by more than 10 percent during this period, reflecting a sustained consumer demand for convenience and health products. Sprouts, the lowest-selling vegetable category, posted the largest vegetable sales decreases.