Photo courtesy of Sainsbury's

Lessons learned: Can US consumer trends offer insight into how to grow sales of fresh produce worldwide?

Jonna Parker, Circana

Inflation hit consumers hard in 2022, with year-over-year prices across total food and beverages growing a sky-high 12.5% by end of year. But, when it comes to produce, consumers have not responded based on price-impact alone.

Shoppers are undoubtedly being more price-conscious in their food purchase habits, but convenience and quality remain key factors driving sales. And fresh produce delivers on both counts. As consumer demand grows for affordable essentials and foods that support holistic health and sustainability, produce is uniquely ready to deliver in those areas. These factors position fresh fruits and vegetables as a continued promising growth category for retail.

At-Home Meals Will Remain Dominant

Despite a growing consumer return to pre-pandemic mobility, rising costs have helped sustain higher meal-at-home rates in the US. Circana shopper surveys found consumers were eating 81.5% of their meals at home in December 2022 — a slight increase from previous months and even higher than the 79.5% of meals eaten at home in December 2021.

The same survey found that 21% of shoppers planned to cook even more at home, and 27% of consumers planned to eat at a restaurant less in January versus December.

We can see the importance of this trend in our 2022 sales data. In a year when produce volumes trended down overall, cooking vegetables, salads and herbs saw volume growth. The top-growth vegetable subcategories included onions (2% volume growth), cucumbers (2%), cilantro (4%), garden salads mixes (8%), garlic (5%) and rhubarb (109%).

It is no coincidence that many of these items are at-home meal prep essentials — and meeting this need should be a priority for produce retailers to stay both competitively priced, but readily available and easily accessible to shoppers.

Consumers Are Channel-Surfing for Deals

Not all retailers may be feeling positive about produce. Consumers are showing an increasing willingness to shop around for the best produce bargains, especially now that fresh produce staples, and even some convenience items, can be found everywhere in a wide variety of stores.

According to Circana shopper survey data, consumers averaged 64 trips to any retailer for produce in 2022, an increase from 2021. But only 41.7% of sales went to traditional grocery stores, a 1.1% share point decline from 2019. These losses came at the expense of growth in the club, mass/super, online, dollar and convenience store channels.

Grocery may have the widest and “freshest” assortment of produce — but being relevant, priced right and adjacent to other needed items at the right time and place also play into produce purchase habits.

Non-grocery channels are touting their fresh offerings, and consumers have grown increasingly comfortable with their produce quality. In fact, nearly half of consumers (49%) in a May Circana survey for the International Fresh Produce Association (IFPA) said they shop at a retailer outside of traditional grocery as their primary produce source. The array of primary options includes: supercenters (16%), discount grocery stores (11%), non-supercenter mass merchandise stores (7%), club stores (6%), specialty grocers (4%), and local farmers markets and stands (3%).

To stay competitive in this environment, it’s important to always be in stock with everyday essentials. But consumers also revel in the treasure-hunt experience. When you get some interesting varietals or exotic new produce items in stock, it’s important to let your shoppers know, to cultivate that same sort of excitement.

Value-Added Produce is Highly Valued

Despite a willingness to shop around for deals, produce consumers aren’t necessarily always switching to the lowest-cost produce option. For instance, share by temperature state has remained somewhat consistent — people are not readily switching to canned or frozen produce as a preferred way to save. The reality is some uses, sizes, varieties and other key decision factors are only found in the fresh produce department. Even in this inflationary environment, shoppers are not even always opting for the most affordable option when shopping the perimeter.

For example, value-added (pre-cut) lettuce grew dollar sales by 13.4% and value-added broccoli grew by 5.6% in 2022. Both outperformed their cheaper “whole” counterparts, showing many consumers still value step-saving conveniences. Interestingly, these options also outperformed the more expensive categories of value-added salad kits and salad blends. Consumers want value, but that can often mean striking the right balance between convenience and affordability.

At the same time, value-added products can also provide another sort of value. Like mixed berries that give consumers taste variety without the purchase of several different pints. Or the pre-cut pineapple, watermelon or cantaloupe slices that save time while removing the intimidation factor of cutting open a tough melon with a large knife. When selecting value-add, the choice usually isn’t between these products and their whole versions. It’s often between value-added produce and another side for the meal.

Being the Go-To Produce Retailer Will Never Be Only About Price

A May 2022 Circana survey on behalf of the IFPA asked consumers what qualities were important to them in their go-to produce store. Only 40% of respondents listed consistently low everyday prices on produce as a factor. The top reasons given for choosing their produce retailer include:

  • It’s where I typically shop for all my groceries (61%)
  • Convenient location to home or work (55%)
  • Produce section is well-stocked (53%)
  • The produce is always fresh (53%)

Clearly, when it comes to produce, it’s less about price and more about efficient shopping, location, freshness and selection.

Consumers Want What Produce Delivers

That being said, there’s also a real divide between the shopping behaviors of consumers by income, generation, location and lifestyle. But it’s also important to note that all consumers were hit by inflation everywhere — and consumers see produce as a valued staple, not a discretionary purchase. One way they are saving is by seeking out-of-home quality at home for a much lower cost. This means that strong opportunities for premiumization in the produce aisle remain, along with the need to deliver value.

Consumer trends are skewing increasingly toward the connected consumer, total wellness, home-based convenience, affordability and premium escapes. In this environment, produce suppliers and retailers have a simple blueprint for winning. Just effectively promote and persuasively deliver on the category’s inherent strengths: freshness, variety, purchase-size flexibility, sustainability and convenience.

Jonna Parker is principal, Fresh Center of Excellence, Circana (formerly IRI and The NPD Group)



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