Back to the future for fresh produce
Most of us have seen “Back to the Future,” the blockbuster movie from the 1980s where a time machine takes people back 30 years and they return to present day to find the surroundings have changed. Not to suggest produce departments are going back to 1990, but there is a buzz around what the future produce departments will look like as the pandemic has changed so much so fast.
Trends are shifting at such a rate that it can be hard to keep up, but now that we are five months into the pandemic, there is a normalcy beginning to appear.
It’s evidenced by retail sales increases year-over-year becoming more stable, hovering around 15%. In fact, since week ending April 19, retail produce sales increases have dipped below double digits only twice, the weeks ending June 28 and July 5, respectively.
After the early-pandemic pull-back on promotions and SKU reductions, retailers have since returned to promotions in store, in print and on digital, banking on consumers being more willing to stop, look and shop. And for the most part, this is showing up in the return of non-promotional dollar increases and impulse purchases.
Examples of retailers returning to summer selling promotion schedules include Tops Friendly Markets beginning a “Summer Sell-a-bration” contest and Rouses Markets kicking off a month of store events for “Hatch August.” Another example of the power of fresh produce is the success of recent pop-up farmers markets by 99 Cents Only Stores.
The last five months of 2020 will be interesting at least and potentially historic at most … and we have already had a lot of historic in the first part of this year.
A new kind of networking
Many of us who have spent time in a retail produce operation know that for generations we have learned from each other. Sure, there was always some level of training, best practices learnings and checklists to follow, but mostly the art of merchandising was left to the eye of the beholder – unless you had a mentor, a true produce pro who knew (or seemed to know) everything there was to know about produce. I know I had one, two and maybe three in my lifetime.
But now we have virtual mentors; there are numerous social media pages dedicated to connecting retail produce merchants, where they can post pictures and tell stories in real time of their amazing work.
The activity from retailers across the country – and some as far away as New Zealand – proudly sharing their merchandising skill illustrates that, no matter the size of the retailer, everyone can participate. I have witnessed mentoring taking place where one contributor will ask for advice on how to improve a display or a wall set, and several fellow produce pros will offer their perspectives to help the person who made the request.
As someone who has spent his entire career in and around the fresh produce industry, and mostly at retail, I can tell you that platforms such as this and others can bring incredible value to the field of retail produce.
Using hashtags #freshproduce and #joyoffresh in posts can create a library of stories and images that amplify the essential and impressive skills these produce pros possess.
Shifts in spending
For every dollar spent in a supermarket, fresh produce typically accounts for about 10-15%. What many retailers may not calculate is how much of the total fruit and vegetable dollar (fresh, frozen, shelf-stable) they are earning in fresh fruits and vegetables. Prior to the pandemic, the fresh produce share of the produce dollar was 84%. Once the pandemic hit and surge buying began, that number dropped to 70%. Only in recent weeks, some four months since the low point, has fresh produce regained the 84% share it had prior to the pandemic.
When salad bars were shuttered due to the pandemic, most retailers began offering more pre-packaged salads within their deli or prepared foods departments. But at the same time, the lettuce, tomato, cucumber and pepper categories, along with other basic salad ingredients, began to show above-average increases.
While packaged salads in produce remained stable with 9-13% increases, the commodity categories have recorded even larger gains. Making the connection between lost sales in one area and higher sales in another is important for retailers to understand to leverage the opportunity with their customers.
August, as always, will be a prolific month for fresh fruit sales. How back-to-school works state by state could have an impact on some fruit categories, but the outlook is for fresh produce to continue the current trend of double-digit increases which have been seen over the past four and now closing in on five months.
The conversation around all this will continue with third installment of a webinar series from PMA and IDDBA on the future of salad bars at retail. Also, you can find PMA’s retail resources related to COVID-19 here, the latest consumer research info here, and the latest on Joy of Fresh here.
This column is part of a series by Joe Watson, who spent 30-plus years as the director of produce for Rouses Markets and was named Produce Retailer of the Year in 2014. Joe now serves as a vice president of member engagement for PMA.