What’s driving fresh purchases?
When it comes to the dinner table, everything is a competition. Restaurants, take-out, meal kit services and grocery stores are all vying for consumers’ dollars, but one dominant trend has emerged in recent years – consumers are eating out less frequently.
According to a 2017 Reuters/Ipsos survey, about 72 percent of Americans cook from home at least four nights a week. Meanwhile, 40 percent of Americans now work from home all or part of the
week, so they’re going out to lunch less. And many consumers are trying to eat healthier, fresher, and consume less processed foods. When you consider these factors, it should come as no surprise that fresh foods are now driving total store sales and produce is a major contributor to that growth.
Produce is second only to the meat department when it comes to total fresh sales. According to Fresh Facts on Retail:
- Produce accounts for 33 percent of total fresh sales and $52,098 of weekly per-store dollar sales — up 3.6 percent from 2015;
- Fruit makes up 47 percent of produce per-store weekly dollar sales, and vegetables come in at 43 percent;
- Berries reign supreme in the fruit category, contributing $4,561 to weekly per-store dollar sales — up 7.4 percent from 2015; and
- Packaged salads dominate for vegetables at $4,081 weekly per-store dollar sales — up 4.7% from 2015.
How can produce companies capitalize on the increasing number of Americans who are cooking meals at home? It all comes down to consumer awareness of stores and what they have to offer compared to their competitors. The Food Marketing Institute reports that 72 percent of shoppers check for produce promotions and are open to receiving communications from retailers about current deals. Email is most popular — about 31 percent of shoppers say they’re likely to sign up for inbox alerts. Nearly 19 percent of shoppers are likely to check social media for deals, and 16 percent opt for texts. (FMI’s The Power of Produce, 2016)
It’s not all about the price though. Quality and appearance of produce will sway shoppers more than just the bottom line, as will variety. FMI also reports that shoppers are willing to store hop for the best fresh options. In fact, 24 percent of shoppers purchase fresh produce in a different channel from groceries in general. And more than 33 percent of super-center shoppers switch — mainly to supermarkets — for their produce. Supermarkets are “produce powerhouses” because of their ability to retain a high percentage of primary shoppers and their ability to attract high shares of switching shoppers. While supermarkets remain the primary channel choice for fresh produce, specialty organic stores have become the third most shopped channel choice for fresh produce in general and the second most shopped for organic produce.
As we’ve seen consistently over the last several years, locally grown produce continues to be at the top of shoppers’ lists. Shoppers associate local with “fresh” which is an important attribute in the food they buy. About 61 percent of shoppers have expressed a high interest in their stores’ local produce options, and they’re becoming more discerning about what they consider local when it comes to produce. For 39 percent of U.S. shoppers, that means considering the specific distance from where the produce is grown, while 28 percent consider anything grown in state to be local. For some consumers, local produce will continue to be an important purchasing driver, even as the reasons for purchase differ by demographic. But understanding consumers’ motivators can help produce marketers create effective marketing messages and delivery tools. The following excerpt from the 2016 Power of Produce report provides a snapshot of some of the reasons for purchasing local produce.
Source: FMI’s 2016 Power of Produce
Maximizing the fresh opportunity
Many retailers are not fully capitalizing on this shift in consumer values and maximizing the opportunity that fresh categories, especially produce, presents. Shopper satisfaction is extremely important in driving spending and loyalty with shoppers pointing to better variety of items and better everyday prices as the two main areas of improvement for grocery stores. Improving the fresh selection as well as merchandising is important, but it’s not sufficient. Develop a consistent message on Fresh and communicate it through every department. Additionally, be sure your shoppers see you as the authority on “Fresh” who can help them sort through the velocity of information to get to what they really need to know. Having visible personnel actively helping customers may be a good way to differentiate and can go a long way in driving satisfaction. (FMI)