Supermarket Perimeter - September 2024 - 9

B
ecause of the pandemic and the inflationary
period that followed (and is still with us), the past
five years have been volatile ones for all corners
of the grocery store, fresh and center-store.
The performance of the fresh produce department,
however, has been fairly steady, said Jonna Parker,
principal and fresh foods team lead for Circana.
" Produce has always been a vital department the
past five years. It's had its ups and downs, but the
growth and the losses haven't been as great as in other
departments. It's been a point of consistent demand
and performance. "
Thanks to the convulsions created by the pandemic
and inflation, prices in most grocery departments are
currently up more than 30% over where they were in
2019, Parker said.
Fresh produce, by contrast, is up just 18%.
" Produce has weathered inflation pretty well. "
Consumers are " very engaged " with fresh fruits
and vegetables, driving robust demand that not only
exceeds last year's levels but also 2022, said AnneMarie
Roerink, principal of 210 Analytics.
" That can't be said of many departments. Only
produce and meat are running ahead in volume sales
over the latest 52 weeks in comparison to last year and
the year before. "
And of those two departments, only produce is
notching strong gains in both units and pounds. (For
meat, consumers have shifted to larger pack sizes -
pounds are up, but units down.)
Fruit at the forefront...
Fruit has taken the lead in annual sales and growth,
Roerink said.
" Fruit price inflation has been relatively mild over
the past few years, certainly in comparison to total
food and beverages. And several commodities are
experiencing deflation. "
Engagement with fruit, meanwhile, has been
Top 3
" spectacular, " she said, with unit and volume sales
over the latest 52 weeks up against the year before,
as well as the two and three years before that.
Fruit movement at retail has benefited from the
greater number of shopping trips consumers are
making, Roerink said. On those additional trips, people
are making more impulse purchases of fruits.
" Chasing sales promotions combined with an effort
to reduce food waste at home has consumers shop
more often. That means they're walking past the eyecatching
and seasonal produce displays more often. "
...but veg holding its own
Vegetable demand is also strong, with continued
dollar growth and unit and volume gains over the past
two years, though a bit lower than those seen in fruit,
Roerink said.
Tomatoes, cucumbers and peppers have all had
" tremendously good " years, Parker said. A lot of
that has been driven by the boom in snacking, and
producers that can tailor their products to snackers,
and retailers who know how to merchandise them,
have a lot to gain.
Potatoes and onions have also performed very well
in this inflationary era, Parker said.
In a recent video on budget dining that went viral, one
of the main images was of a woman slicing potatoes.
" There's a real value play in potatoes, " she said.
" There's a lot of consumer demand for great, classic
stomach stuffers. "
Volume sales of onions are up, and it's not just the
traditional buyers of a big bag of yellows that accounts
for it, Parker said. With more consumers now confident
FRUITS
+$429M
Berries
+$212M
Melons
+$126M
Grapes
VEGETABLES
+$403M
Potatoes
+$221M
Lettuce
+$152M
Tomatoes
Source: FMI -
The Food Industry Association,
Power of Produce 2024
produce
commodities
sales growth,
2022 to 2023
sales growth,
2022 to 2023
Looking ahead: four trends to watch
The shopper's eye is on price and
promotions in combination with
ripeness and appearance. While
price dominates the purchase
decision and promotions wield
great influence over what, how
much, what brands and where
consumers buy, quality matters.
Together with price, ripeness
and appearance drive the more
pre-planned purchase decisions
in today's marketplace.
Convenience and sustainability
matter, but are subject to
financial pressure in today's
marketplace. Multi-year growth
drivers value-added and organic
fresh produce underperformed
in 2023. Price is the biggest
purchase barrier for both. Claims
with a broader, cross-population
appeal continued to enjoy strong
interest, including local, seasonal
and grown in the USA.
Source: FMI - The Food Industry Association,Power of Produce 2024
supermarketperimeter.com
Value-forward formats gained in
share and sales. More consumers
purchased fresh produce at
mass/supercenters, elevating
their share of dollars from 17.4%
in 2020 to 20.1% in 2023.
Traditional supermarkets and
health/organic specialty stores
have been losing share since
2020. Produce ecommerce was
an area of growth for several
years but lost ground in 2023.
Food waste's financial impact
may reduce produce purchases.
Six in 10 Americans indicate
fresh produce waste at home
is an issue that they cannot
financially afford. Consumers
recognize the issue of package
waste, but emphasize package
functionality. Willingness to
pay more for environmentally
friendly packaging is subdued.
They value tips on improving shelf
life, storage and freezing produce.
SEPTEMBER 2024 - 9
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Supermarket Perimeter - September 2024

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