In the basket

Photos © Adobe Stock

Consumers want to incorporate fresh produce into more meal occasions, reduce produce food waste and learn more about the nutritional value of fresh foods — a boon for the CEA market and crucial information to examine for sales, marketing and packaging plans. In March, FMI — The Food Industry Association released its sixth Power of Produce report, and it identifies insights and opportunities for the entire fresh produce supply chain.

The survey, conducted in November 2023, provides insights from 1,528 grocery shoppers who are 18 years of age or older and consume fresh fruit or vegetables.

Some of the insights from the report include:

* Fresh produce was flat with room for growth. While mild inflation continued to boost dollar sales to a record $76.4 billion, volume and units held steady in 2023. Fewer people bought fresh produce and fruit, and vegetable inclusion was down across most meal occasions.

* 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.

* 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.

The report also found that fresh produce was among the strongest-performing departments in traditional grocery, with only small year-on-year unit and pound declines and several months in which volume sales exceeded prior-year levels. Additionally, volume sales remained above pre-pandemic levels. Produce department sales in the U.S. in 2023 totaled $76.4 billion, a 2.2% increase from the previous year.

For fruit and vegetable sales at retail, berries topped the list with $9 billion in sales, up 5% from the previous year. Tomatoes were the leader in vegetables with $4.1 billion in sales, followed by lettuce at No. 3 ($3.2 billion), salad kits at No. 4 ($2.9 billion), peppers at No. 6 ($2.6 billion) and cucumbers at No. 7 ($1.5 billion).

Produce consumption habits

It was a challenging year for produce consumption, but there are sales opportunities despite the lower numbers. According to the report, daily consumption of fresh fruit and vegetables dropped to a seven-year study low, driven by declines across all meal occasions. Consumption frequency remains the biggest opportunity to grow sales, the report reveals. Snacking and breakfast are key to vegetable growth, while fruit can shine as a healthy dessert and snack. Tips about produce snacking, health benefits and nutrition education are prime ways to help consumers increase their consumption of fresh fruits and vegetables.

Thirty percent of consumers tend to eat fresh fruit and vegetables daily, while 51% max out at three days a week. The report suggests there are sales opportunities in expanding across meal occasions.

Fresh vegetables make their most frequent appearance at dinner and are less prominent in breakfast and snacks. Cucumbers illustrate the opportunity in vegetable snacking as one of the few produce items with positive unit and volume growth. Fruit is most frequently included at breakfast, lunch and snack occasions.

Produce consumption habits vary across the population segments. The growth in spending among Millennials and Gen Z underscores the opportunity for produce snacking, while Boomers are more traditional in their usage occasions, emphasizing lunch and dinner for vegetables.

With increased blurring between meals and snacks, 51% of produce shoppers say it would be good to have tips on new ways to incorporate fresh fruit and vegetable snacking. Additionally, they recognize the integral role of health benefits and nutrition when consuming fresh fruit and vegetables and have a keen interest in learning more.

Produce price points

One-quarter of consumers said price is the top factor when selecting/purchasing fresh produce. Ripeness and appearance rounded out the top three factors. But health benefits grew more important to consumers, with 37% saying they put a lot of emphasis on healthy eating and 67% revealing nutrition and health are important or primary reasons for including fresh produce in their overall food purchases.

The survey asked shoppers how growing attributes influenced their shopping habits. Knowing more about the who, when, where and what behind the produce they purchase is important to about one-third of shoppers. They want to see more locally grown produce along with domestic products. Organic, an above-average growth driver for the department for many years, saw a decline in engagement and purchase frequency, with price and shelf-life being the biggest barriers.

Interestingly, 34% of shoppers are interested in virtually visiting a greenhouse.

Evaluating the Power of Produce study

We asked Rick Stein, vice president of fresh foods at FMI, to weigh in on some of the report’s conclusions.

Produce Grower: “Snacking produce” was mentioned several times in the report. What is it about that category that appeals to consumers?

Rick Stein: We did some research with Circana and Oliver Wyman on eating occasions and found that shoppers really approach each opportunity to eat differently. For instance, the research noted that while 87% of morning eating occasions and 76% of midday eating occasions are sourced from home, there is an increasing trend toward food service across many consumer segments, particularly Gen Z and Gen X, reflecting growing demand for convenience.

Snacking is an example of an eating occasion where shoppers are looking for options that are satisfying, convenient, but also help them meet their health and well-being goals. Fruits and vegetables play well in this space, and there is an opportunity to create more snackable produce offerings that help consumers meet their needs.

PG: How can growers think differently about packaging and marketing snacking types?

RS: Food retailers often display produce in the packaging that comes from the farm, so producers can consider the look of that packaging and if there are fun facts or cooking tips and tricks for the produce that will be displayed to shoppers.

In addition, shoppers tell us that package functionality outweighs a package’s environmental impact. For example, 37% of consumers tell us they are willing to pay an additional $0.50 for environmentally friendly packaging on produce, whereas 35% are not. This is an opportunity to better educate shoppers about the advancements in sustainable packaging for produce, how functionality is still key, and explain the benefits. If consumers are better informed about produce sustainable packaging and how best to recycle or dispose of that packaging, I think you’ll see greater acceptance.

PG: In terms of highlighting health benefits, how do producers keep that message fresh (pardon the pun) and keep consumers from tuning out messages they may have heard for a long time?

RS: Thirty-seven percent of shoppers put a lot of emphasis on healthy eating, and 67% say nutrition and health are important or primary reasons for including fresh produce in their overall food purchases.

There is an opportunity to inform shoppers about the health and wellbeing benefits of produce right at the point of purchase. The MyPlate program, which helps bring the Dietary Guidelines for Americans to life in simple ways, is a great way to do this. MyPlate recommends that half of your plate include fruits and vegetables. I think a lot of shoppers don’t know that, and many don’t know what a portion of fruits or vegetables looks like. Producers and food retailers have an opportunity to educate shoppers more on fruit and vegetable portions and offer produce preparation and meal ideas that ultimately help shoppers meet their health and well-being needs.

This is also a great opportunity for produce merchandisers and producers to work more closely with retail registered dietitian nutritionists (RDNs), who work to help bridge the gap between science-based nutrition and real-life application for shoppers.

PG: Managing food and package waste was mentioned as an opportunity. What are some examples of sustainable packaging that have hit the market recently or are in the pipeline?

RS: In general, we’ve seen a move towards more recyclable packaging that meets local regulations. For example, we’re seeing more clear packaging for produce, which is more universally recyclable.

PG: Why/how did berries achieve such a big bump in dollar growth?

RS: I think the bigger question is how shoppers define value. Our research has found that shoppers are thinking about more than just price and quality these days. Convenience, entertainment, relevance, sustainability factors and health and wellbeing are all factoring into shoppers’ definition of value.

Berries, for example, can meet several facets of this new definition of value. They are convenient, versatile and even have a health and wellbeing element to them. Thinking back to our eating occasion research, berries can also be included in many eating occasions throughout the day. So, I’m not surprised to see berries have become popular among consumers, and I think it represents an opportunity for growers to seek out more fruits and vegetables that fit within shoppers’ new definition of value.

PG: What is one of the biggest “wins” for producers to come out of this research?

It’s really clear to me that the produce department will continue to be top of mind for grocery shoppers. As we survey food retailers, we find that fresh food departments, including produce, continue to be the differentiation factor for retailers, and they are investing more in these programs. For example, our State of Fresh Foods 2023 report found that 74% of food retailers are leveraging their produce programs to differentiate, and 63% report this strategy has been successful. We’re seeing more food retailers invest in their produce departments by hiring produce butchers, offering specialty produce and offering more local, seasonal and organic produce. This investment is sure to benefit not only shoppers but also producers.

PG: What’s a concern the fresh produce market should monitor?

RS: Food price inflation continues to be on the minds of shoppers. In fact, six in 10 consumers indicate fresh produce waste at home is an issue that they cannot financially afford. As such, we are seeing consumers being more deliberate in their produce purchases to avoid food waste. We need to continue to offer variety and assortment in the produce department in a way that helps shoppers meet their needs at different price points.

Read more about the report and how to access it at fmi.org/forms/store/ProductFormPublic/power-of-produce-2024.

Kelli Rodda is editorial director of Produce Grower magazine. Contact her at krodda@gie.net.