Strange days in retail promotions: bagged produce winning
Retail ads for fresh produce are way down because of the COVID-19 pandemic.
And when retailers do promote, they are promoting more bagged options. More importantly, consumers are looking at bagged produce in a new way.
In its April 3 update, the U.S. Department of Agriculture’s report reviewed advertising promotions and prices for specialty crops during the week of March 28 to April 9.
From the report:
"Ad numbers declined slightly again this week due to supply chain disruptions related to COVID-19. Despite that, many retailers tried to keep Easter and Passover demand afloat. Easter favorites such as melons, berries, avocados, pineapples, and asparagus were well advertised. Some stores had special ad sections for Passover that featured beets, honey, grape and apple juices, and nuts. Easter lilies, tulips, candy, toys, and baskets helped brighten up the atmosphere. Some retailers pivoted to creative ways to attract shoppers without offering ad specials. One grocer offered box quantity sales of produce instead of a regular flyer. Another store ran an ad with attractive pictures of their produce offerings, but didn’t attach a price."
TK: According to the USDA, the total number of retail stores promoting apples and oranges totaled 110,306 in the April 3 report, down from 127,522 stores a year ago.
Retail ads promoting bagged apples and orange packs (in contrast with per pound or each ads) totaled 39,822 for the week of April 3, or about 36% of the total promotions.
That compares with 35,557 ads for bagged apples and oranges the same week last year or about 28% of total promotions.
The USDA reported that 78,471 retail stores promoted potatoes and onions April 3, down from 125,893 stores the same week a year ago.
Bagged promotions of potatoes and onions totaled 53,296 the week of April 3, or about 68% of total promotions. That compares with 92,781 stores promoting bagged potatoes and onions a year ago, which then represented about 73% of promotions.
Beyond retail promotions, the demand side of the equation certainly points to the ascendancy of bags, especially for potatoes.
The f.o.b. price trends for potatoes show increasing value for bagged potatoes but sliding prices for large-count carton bulk potatoes typically used in foodservice. While cartons of five 10-pound bagged potatoes in Idaho increased from $5.50 to $9.50 over the past month, the f.o.b. price Idaho count cartons 50 size potatoes slid from $21 per carton to $12 per carton.
From the April 1 Market Report from Pro*Act, some outlook on the market:
“Consumer bags along with carton 90 count and smaller remain in high demand with the current retail surge across the nation. Retail demand has slowed but remains active with consumer bags extremely scarce. Larger size 40 count through 80 count markets have shown decreases in pricing over the last couple of weeks due to light demand. As we head into this week and next we will see a continued downward market trend on larger size cartons with active consumer bag pricing. Washington, Colorado, and Wisconsin will follow Idaho markets with a push to move carton product due to the lack of foodservice demand. Lots will continue to show occasional peepers, soft rot, shoulder/internal bruising.”
TK: It seems retailers, when they do promote, are leaning a little heavier on bagged fruits and vegetables.
That could be because retailers sense consumers want to reduce their trips to the supermarket, meaning they want to pick up more produce per visit. And an 8-pound bag of navel oranges is easier to snatch up than putting eight oranges sold bulk in a plastic produce bag.
There could be a few consumers that also want to avoid naked or bulk produce, thinking that such loose produce could have been handled by shoppers who are infected by the coronavirus.
Others want to stretch their food dollar, and buying bagged over bulk will typically deliver on that.
How will long will “strange time” continue? The answer to that is wrapped up in the riddle of how soon restaurants will return in full force. With the economy stumbling, restaurants shuttered and consumers looking to avoid trips to the store, bagged produce is where the action is right now.