Sales of value-added produce remain strong as consumers seek faster meal preparation and healthier snacks.
By Nora Caley
While consumers continue to look for ways to trim their grocery bills, many are reluctant to pinch pennies by spending hours rinsing, slicing and chopping fruits and vegetables at the end of a long day.
“Value-added sales haven’t changed much due to the economy,” says David Wheeler, new product development and marketing manager for Potandon Produce, based in Idaho Falls, Idaho. “Consumers like to have the home-cooked experience at dinner but without all the prep time usually needed.”
Industry executives say consumers want to buy fruits and vegetables on the go, so the companies are responding with new products, redesigned packaging and more sizes.
According to the Chicago-based market research firm the Perishables Group, for the 52 weeks ended July 31, prepared apples saw a 3.7% increase in dollar sales compared to the same period the prior year. Prepared mixed fruits were up 7.4%, and prepared pineapple increased 10.1%.
Also according to the Perishables Group, prepared mixed vegetables saw an increase of 3.3%. Sales dipped in a few segments, such as prepared potatoes, which were down 7.2%, and baby carrots, which declined 5.2%.
Phil Gruszka, vice president of marketing for Bakersfield, Calif.-based Grimmway Farms, says the company, which offers baby cut carrots and other value-added vegetables, saw some declines during the recession. “There were consumers who said, I can peel carrots myself, but the sheer convenience of baby carrots outweighs the money people can save,” he says.
Gruszka says people are getting more of their fruits and vegetables through snacking rather than just at mealtimes. One of Grimmway Farms’ latest offerings is a clamshell containing 10 two-ounce bags of carrots. “It’s all incremental to the category,” he says.
Tony Freytag, director of marketing for Cashmere, Wash.-based Crunch Pak, says value-added snacking items are hot. “Three years ago less than 30% of our production was in small snacking packages,” he says. “Today, we see that closer to 50% and our business has almost doubled overall in the same period.” The company offers sliced apples in bags, trays, and cups, and has doubled its assortment of single-serve items.
While some people like to snack between meals, others like to include snack items with their meals. About two years ago Fresherized Foods, based in Saginaw, Texas, introduced the Wholly Guacamole 100 calorie snack packs. Tracey Altman, vice president of marketing, says consumers put the packs in the freezer, then pack them in their lunches to help keep their food cold. When lunchtime rolls around, the guacamole has thawed. “People still want to have fun. They still want to enjoy food,” she says.
Altman says the company’s target demographic is moms, but a growing audience is the 20-somethings who just entered the workforce and are watching their dollars.
Consumers are also watching their health. Dionysios Christou, vice president of marketing for Del Monte Fresh Produce, says with the increasing awareness of childhood and adult obesity in the U.S., more consumers intend to lead healthier lifestyles. “This nationwide focus on health and wellness has led consumers to demand and expect healthier options wherever they shop or dine,” he says.
Del Monte offers a 2.7-ounce Del Monte Gold Extra Sweet pineapple spear in an easy-to-open bag. The Coral Gables, Fla. company also recently introduced the Del Monte Gold Extra Sweet pineapple cylinder in a flexible, resealable pouch.
Not all new produce conveniences are for snacking. San Miguel Produce in Oxnard, Calif. recently added two items to its Cut ‘n Clean Greens brand of organics, Rainbow Chard and the Hearty Greens blend of collard and kale. Jan Berk, vice president, says the triple-washed, fresh-cut greens come in consumer and environmentally friendly packaging. The line now consists of six varieties: Rainbow Kale, Garden Greens, Collard, Mustard, Rainbow Chard and Hearty Greens. “Fresh-cut value-added organic specialty greens are brand new to retail markets,” she says.
Wheeler says Potandon’s microwaveable bags of fresh baby potatoes in sauce continue to be a successful value-added product. The Green Giant Fresh Sauced steam bags are available with Four Cheese Sauce, Roasted Garlic Butter Sauce, Mesquite Smoked Bacon Sauce, and Three Chile Sauce.
The Garlic Co., based in Bakersfield, Calif., recently launched Fresh Diced Garlic in vacuum sealed recipe-ready packages. Each 3-ounce package contains 6 half-ounce pouches. “Most recipes call for a half ounce, or three to four cloves, so we’ve taken the next step of dicing the garlic,” says Corinne Sabovich Pettit, retail sales manager. “The diced in jars have preservatives but we want to focus on fresh, which has more flavor and aroma than processed.” The diced garlic is available in organic and conventional varieties.
Working with retailers
The companies work with retailers to make sure the produce conveniences are displayed where consumers can find them. Pettit says retailers usually stock the refrigerated garlic next to mushrooms. “Consumers are looking more in the refrigerated section now because everything is going pre-cut.”
Gruszka says retailers display Grimmway Farms’ baby carrots, carrot chips, shredded carrots and other items between other produce items. The orange bags provide color breaks among the mostly green produce.
Wheeler says one of the challenges is getting recognized on the shelf. “Creating a package design that conveys what the product is and does quickly and efficiently while among all of the other packaging noise is probably the biggest challenge.”
Retailers can boost sales by cross merchandising. Wheeler suggests pairing value-added produce with a center-of-the-plate item, such as meat. “Consumers are very satisfied to spend their time and attention cooking the main dish, whether that be chicken, red meat, or fish.”
Christou suggests pairing fresh cut melons with cheeses, single serve fresh cut items with other lunchbox items, and fresh cut strawberries with chocolate and yogurt dips. “Keep in mind, however, that each needs to be displayed at the proper temperature in order to maintain product quality and freshness,” he says. Del Monte offers point-of-sale materials and signage, including shelf danglers and strips.
Freytag says the economy will continue to be a challenge, so Crunch Pak has adjusted price points to encourage entry-level purchase of the sliced apple products. He says retailers should offer a large assortment of single servings, party trays, family size packages, and large and small clamshells.
Jay Alley, vice president of sales for Fresherized Foods, says the company is launching promotions with Disney and ABC, offering rebates for DVDs of TV shows such as Desperate Housewives and Cougar Town. There are also FSIs and promotions encouraging people to “home gate” instead of tailgate and enjoy Wholly Guracamole and Wholly Salsa while watching football games at home. He says the products also can encourage sales of other fresh produce. Consumers add tomatoes, cilantro, onions, and lime juice to Wholly Guacamole and to Wholly Salsa.
Altman thinks consumers will remain health conscious, but no one can predict how they will spend their money in the near future. “We are interested to see if consumers’ shopping habits will go back when the economy rebounds. If it does or not we feel we are positioned well. Convenience never goes out of style.”